ASGN (NYSE:ASGN) Beats Q4 CY2025 Sales Expectations

IT services provider ASGN (NYSE:ASGN) announced better-than-expected revenue in Q4 CY2025, 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 reported solid results for the fourth quarter, with revenues of $980.1 million at the top end of our guidance range, and Adjusted EBITDA margins of 11 percent exceeding our expectations,” said ASGN’s Chief Executive Officer, Ted Hanson.

Company Overview

Evolving from its roots in IT staffing to become a high-end technology consulting powerhouse, ASGN (NYSE:ASGN) provides specialized IT consulting services and staffing solutions to Fortune 1000 companies and U.S. federal government agencies.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $3.98 billion in revenue over the past 12 months, ASGN is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s challenging to maintain high growth rates when you’ve already captured a large portion of the addressable market. To accelerate sales, ASGN likely needs to optimize its pricing or lean into new offerings and international expansion.

As you can see below, ASGN grew its sales at a sluggish 2.6% compounded annual growth rate over the last five years. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. ASGN’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 5.4% annually.

This quarter, ASGN’s $980.1 million of revenue was flat year on year but beat Wall Street’s estimates by 0.6%. Company management is currently guiding for flat sales next quarter.

Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection suggests its newer products and services will spur better top-line performance, it is still below the sector average.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

ASGN was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.9% was weak for a business services business.

Analyzing the trend in its profitability, ASGN’s operating margin decreased by 3 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. ASGN’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, ASGN generated an operating margin profit margin of 5.7%, down 1.8 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for ASGN, its EPS declined by 1.2% annually over the last five years while its revenue grew by 2.6%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Diving into the nuances of ASGN’s earnings can give us a better understanding of its performance. As we mentioned earlier, ASGN’s operating margin declined by 3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For ASGN, its two-year annual EPS declines of 13.6% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q4, ASGN reported adjusted EPS of $1.15, down from $1.28 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects ASGN’s full-year EPS of $4.55 to grow 9.1%.

Key Takeaways from ASGN’s Q4 Results

It was good to see ASGN narrowly top analysts’ revenue expectations this quarter. On the other hand, its EPS missed and its EPS guidance for next quarter fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $53.28 immediately after reporting.

So do we think ASGN is an attractive buy at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).