IT services provider ASGN (NYSE:ASGN) reported Q4 CY2025 results topping the market’s revenue expectations, but sales were flat year on year at $980.1 million. The company expects next quarter’s revenue to be around $970 million, close to analysts’ estimates. Its non-GAAP profit of $1.15 per share was 2.2% below analysts’ consensus estimates.
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ASGN (ASGN) Q4 CY2025 Highlights:
- Revenue: $980.1 million vs analyst estimates of $973.9 million (flat year on year, 0.6% beat)
- Adjusted EPS: $1.15 vs analyst expectations of $1.18 (2.2% miss)
- Adjusted EBITDA: $107.9 million vs analyst estimates of $106.5 million (11% margin, 1.3% beat)
- Revenue Guidance for Q1 CY2026 is $970 million at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q1 CY2026 is $0.98 at the midpoint, below analyst estimates of $0.98
- EBITDA guidance for Q1 CY2026 is $96 million at the midpoint, in line with analyst expectations
- Operating Margin: 5.7%, down from 7.5% in the same quarter last year
- Market Capitalization: $2.28 billion
StockStory’s Take
ASGN’s fourth quarter results reflected continued momentum in its high-margin consulting business and increased demand for technology transformation, especially around AI and digital engineering. Management attributed the quarter’s performance to growth in commercial consulting bookings, which reached a record level, and strong execution in key industry verticals, including healthcare and consumer sectors. CEO Theodore Hanson emphasized that, despite flat year-over-year revenue, the company’s shift toward higher-value services is taking hold, with consulting now representing a larger share of total revenue. Hanson noted, “Volume of new consulting work continues to grow, as our customers increasingly recognize the importance of preparing data, building infrastructure, and deploying enterprise platforms to harness the full potential of AI.”
Looking ahead, ASGN’s guidance is shaped by continued investment in digital engineering capabilities, the integration of its latest acquisition, Quinox, and the launch of its unified brand, Everforth. Management expects that ongoing transformation efforts, expansion of global delivery, and the ramp-up of proprietary AI frameworks will support long-term growth, despite near-term macroeconomic uncertainties. President Sadasivam Iyer stated, “By integrating Quinox’s expertise in application management, analytics, and enterprise platforms, we will immediately expand our market share and delivery footprint.” The company also anticipates structural cost savings from technology streamlining and efficiency initiatives to help offset margin pressures in the coming quarters.
Key Insights from Management’s Remarks
Management cited record commercial consulting bookings, strong free cash flow generation, and strategic acquisitions as the main contributors to the quarter’s performance and continued transformation.
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Consulting business expansion: Commercial consulting bookings hit a new high, fueled by growing enterprise demand for AI, cloud, and digital transformation services. The segment benefited from both project-based and longer-term managed platform work, with particular strength in healthcare and consumer industries.
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Quinox acquisition accelerates capabilities: The recently announced acquisition of Quinox brings advanced digital engineering and global delivery resources, particularly in India, and expands ASGN’s capacity to deliver complex solutions at scale. Management expects this to accelerate cross-selling opportunities and revenue synergies.
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Federal segment stability amid delays: While federal bookings faced delays due to a government shutdown, management pointed to a strong contract backlog and anticipated pent-up demand heading into 2026. Increased defense and intelligence budgets are expected to support the business moving forward.
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AI and data center growth: AI remains a dominant driver of customer demand, especially for projects involving data readiness, governance, and infrastructure expansion. ASGN is actively involved in scaling AI data center fleets for major hyperscale clients and developing proprietary frameworks like the AI Factory to address governance and deployment challenges.
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Balanced capital allocation: The company continued to generate robust free cash flow and exercised a disciplined approach by investing in M&A and returning capital to shareholders through share repurchases. Management reiterated its intention to balance organic investments with strategic acquisitions as part of its long-term growth strategy.
Drivers of Future Performance
Management expects future performance to be driven by higher-value consulting services, integration of new capabilities, and continued AI adoption, while monitoring for macroeconomic headwinds and margin pressures.
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Integration of Quinox: The addition of Quinox is expected to scale ASGN’s offshore delivery capabilities and accelerate digital engineering growth. Management anticipates faster-than-usual revenue synergies and improved global delivery efficiency due to Quinox’s established client base and operational maturity in India.
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AI and modernization demand: Ongoing client investment in AI, cloud, and modernization projects underpins ASGN’s growth outlook. The company’s proprietary AI Factory and Watchtower governance tools are positioned to address client challenges in scaling and securing AI deployments, supporting continued consulting momentum.
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Cost-saving initiatives and margin management: Structural cost savings from technology streamlining and integration efforts are set to ramp up in 2027 and 2028, with moderate impact expected in 2026. Management remains focused on balancing growth investments and cost controls to manage operating margins amid changing market dynamics.
Catalysts in Upcoming Quarters
Over the coming quarters, the StockStory team will be watching (1) the pace and impact of Quinox integration on consulting growth and delivery efficiency; (2) progress in expanding AI and digital engineering services, especially through proprietary frameworks like AI Factory; and (3) the realization of structural cost savings and margin improvements from technology streamlining and integration initiatives. Execution on these fronts will be critical for ASGN’s transformation and long-term competitiveness.
ASGN currently trades at $50.50, down from $53.28 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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