On this page of StockholderLetter.com we present the latest annual shareholder letter from ASGN Inc — ticker symbol ASGN. Reading current and past ASGN letters to shareholders can bring important insights into the investment thesis.
ANNUAL
REPORT
2023
L E T T E R FRO M T HE CHI E F E XE CUT I V E OF F I C E R
Dear Fellow Stockholders
Theodore S. Hanson
The past 12 months were pivotal to ASGN   s evolution as
an IT services and solutions company, and I can confidently say
that in 2023 we proved our resilience, strength, and progress.
Over the past year, we had the unique opportunity to test
drive our current revenue mix and operating model in a
difficult economy. Despite these obstacles, we moved
ahead and reinforced that ASGN has the right strategy,
the right business model, and the right professionals in
place to succeed.
Government consulting revenues also saw a nice
improvement in 2023, increasing 11.4 percent
year-over-year on an as reported basis and 4.9 percent
organically. We were awarded $1.0 billion in new
government contract awards during the year, and our
pipeline of government services, as well as our bids
submitted and awaiting award, are each at some of their
highest levels.
My 2022 letter to stockholders concluded that ASGN was
quickly approaching a positive inflection point of greater
than 50 percent IT consulting revenues. We rapidly
achieved this goal in the first quarter of 2023, and by the
fourth quarter, 55 percent of our consolidated revenues
were in IT consulting, a full year ahead of target.
As expected in a challenging environment, we saw
softness in our more cyclical commercial assignment
businesses. These businesses, however, have typically
seen prolonged periods of growth as the economy
recovers. The demand for IT services remains strong,
and as macro conditions improve, ASGN   s just-in-time
model that leverages a deep, contingent talent pool
onshore as well as nearshore in Mexico, offers one of
the quickest ways for our clients to increase their efforts
on critical IT investments.
For the year, revenues totaled $4.5 billion. Commercial
consulting revenues officially surpassed $1.0 billion,
improving 14.2 percent year-over-year on an as reported
basis and 8.6 percent organically. Contributing to that
topline growth, commercial consulting new bookings
totaled $1.4 billion for the year, for a healthy book-to-bill
ratio of 1.2 times, providing strong revenue visibility.
TRACK RECORD OF GROWTH & RESILIENCE
R E V E NUES
A D JU S T ED EB I T D A


4,009.5
($   s in millions)
4,581.1
FR EE C AS H F L O W
4,450.6


559.4
483.1

417.0

517.2


12.0%
2021
2022
2023
2021
12.2
246.9
270.3

80.6%

2022
11.6%
51.1%
48.3%
2023
2021
2022
Adj. EBITDA as a % of revenue
2023
Free Cash Flow as a % of Adj. EBITDA
1
M O VI N G U P
TH E I T S E RVI CE S
PYRAM I D P RO V I DE S
H I GH E R VALU E ,
H I GH E R M ARG I N
I N C R EAS I N G AD R ES S AB L E MAR K ET
Strategy
Architecture
Design
Systems Deployment
Service Centers
Technical Staffing
Commercial
Federal Government
From a profitability perspective, ongoing expense
management, along with our business stabilizers,
contributed to a solid Adjusted EBITDA margin of 11.6
percent for the year. As our IT commercial consulting
business grows, margins will continue to expand. In
addition, our free cash flow generation was a standout
feature of our annual performance. Free cash flow
improved 54.3 percent from the prior year, reaching a
total of $417.0 million. This represents an 81 percent
conversion rate of our Adjusted EBITDA.
In 2023, not only did we prove the effectiveness of our
operating model, but we also demonstrated that ASGN has
the ideal combination of businesses to position our
Company for continued growth. Our Federal Government
Segment provides mission critical IT services to the
Department of Defense, the intelligence community, and
federal civilian agencies. This segment and industry
vertical offers countercyclical support to balance out our
five diverse Commercial Segment industry verticals, which
service Fortune 1000 and large mid-market companies.
POSITIONING FOR GROWTH
AT THE FOREFRONT
OF TECHNOLOGY
Looking back on the past year, it   s important to
recognize that ASGN   s business today is the result of
many years of thoughtful and proactive planning.
From our heritage as a diversified staffing company, to our
current state as a leading provider of IT services and
solutions to the commercial and government sectors, we
have strategically shaped and purposefully built ASGN
to perform well throughout economic cycles. As we   ve
evolved our Company   s capabilities over the years, our
credibility and history in IT staffing led our clients to pull us
into higher-end consulting opportunities. The IT consulting
market is where we want to be     not only is the market
important to our customer base, but the visibility and
margin are greater and the total addressable market
across the commercial and government sectors is nearly
10 times that of IT staffing.
2
ASGN   s expertise across six diverse industry verticals
opens the door to new revenue opportunities, while our
commitment to investing in our clients' future growth
and success drives our longstanding relationships and
expanding market share.
ASGN consistently invests in six core areas, including:
leadership; recruiting; training and skill development;
technology partnerships; internal artificial intelligence (AI)
tools; and our clients    IT roadmaps. Our clients'
IT roadmaps are being propelled by significant
momentum in the fields of AI, data, cloud computing,
and cybersecurity.
AI has become one of our fastest growing service areas,
as our clients turn to AI to meet today   s business
challenges at greater speed and with increased accuracy
and precision. On the commercial side of our business,
over the past five years we   ve deployed nearly 800
consultants to complete more than 240 AI projects.
2023 DIVERSE END MA RKE TS
(% OF REVENUES )
H I G H ER & G R O WI N G MI X O F
C O N S U LT I N G R EVEN U ES
71%
18%
17%
Consumer
& Industrial
Financial
Svs.
Federal
Segment
52%
48%
45%
44%
48%
52%
55%
Commercial
Segment
TMT
13%
29%
Federal
Government
Healthcare
10%
Business
Svs.
1H 2022
2H 2022
1H 2023
Consulting
A growing number of these projects are now exploring
novel generative AI capabilities. In the federal space, we
are one of the U.S. Government   s top AI contractors
and maintain over 1,000 combined certifications,
accreditations, and awards across practice areas,
including newer available certifications in AI and
generative AI as the technology further develops.
Technology is shifting at an incredibly rapid pace, and it is
essential for us to stay ahead of this change in order to
remain competitive in today   s marketplace. We are
therefore not only developing AI roadmaps for our clients,
but we are also investing in our own internal AI skills and
toolsets. Across the business, we continue to hire subject
matter experts, train our teams, and develop AI
accelerator programs, each with our customers' needs in
mind. We are also leveraging our partnerships with key
technology innovators such as ServiceNow, Microsoft,
and Salesforce, amongst others, to upskill our people and
pilot generative AI applications.
ASGN's work in AI exemplifies our three-pronged
go-to-market strategy, which includes: 1) targeting the
right markets, 2) providing the right IT solutions, and
3) collaborating with the right technology partners.
Underpinning this strategy is our deep, talented labor
pool. ASGN at its core is a people business, and our
ability to find the best professional resources at the exact
time our clients need them to support their IT initiatives, is
what has enabled our Company to differentiate itself for
decades. Our superior recruiting model, which leverages
a primarily contingent labor force onshore and nearshore,
provides a scalable, flexible solution that sets ASGN
apart in the IT marketplace from the traditional consulting
companies that rely solely on permanent bench talent.
2H 2023
Assignment
BALANCED CAPITAL
ALLOCATION STRATEGY
We are making strategic investments in our workforce
and our Company. Our well-rounded approach to
capital allocation, which includes organic initiatives,
acquisitions, share buybacks, and debt repayment,
enables us to make these crucial investments and
gives us the flexibility to allocate funds in the best
interests of all stakeholders.
Beyond organic investments, we continue to believe
that M&A is the most effective use of our capital and
provides the highest return.
O U R B AL AN C ED AP P R O AC H
T O C AP I TAL AL L O C AT I O N (in millions)
484.6

222.8

281.4

273.1

181.3

2021
2022
2023
Acquisitions in 2022 were partially funded by the
proceeds from the sale of a business in 2021.
Share buybacks
Acquisitions
ANNUAL REPOR T 2023
29%
13%
56%
3
 • shareholder letter icon 4/24/2024 Letter Continued (Full PDF)
 • stockholder letter icon 4/27/2023 ASGN Stockholder Letter
 • stockholder letter icon More "Business Services & Equipment" Category Stockholder Letters
 • Benford's Law Stocks icon ASGN Benford's Law Stock Score = 75


ASGN Shareholder/Stockholder Letter Transcript:

ANNUAL
REPORT
2023


L E T T E R FRO M T HE CHI E F E XE CUT I V E OF F I C E R
Dear Fellow Stockholders
Theodore S. Hanson
The past 12 months were pivotal to ASGN   s evolution as
an IT services and solutions company, and I can confidently say
that in 2023 we proved our resilience, strength, and progress.
Over the past year, we had the unique opportunity to test
drive our current revenue mix and operating model in a
difficult economy. Despite these obstacles, we moved
ahead and reinforced that ASGN has the right strategy,
the right business model, and the right professionals in
place to succeed.
Government consulting revenues also saw a nice
improvement in 2023, increasing 11.4 percent
year-over-year on an as reported basis and 4.9 percent
organically. We were awarded $1.0 billion in new
government contract awards during the year, and our
pipeline of government services, as well as our bids
submitted and awaiting award, are each at some of their
highest levels.
My 2022 letter to stockholders concluded that ASGN was
quickly approaching a positive inflection point of greater
than 50 percent IT consulting revenues. We rapidly
achieved this goal in the first quarter of 2023, and by the
fourth quarter, 55 percent of our consolidated revenues
were in IT consulting, a full year ahead of target.
As expected in a challenging environment, we saw
softness in our more cyclical commercial assignment
businesses. These businesses, however, have typically
seen prolonged periods of growth as the economy
recovers. The demand for IT services remains strong,
and as macro conditions improve, ASGN   s just-in-time
model that leverages a deep, contingent talent pool
onshore as well as nearshore in Mexico, offers one of
the quickest ways for our clients to increase their efforts
on critical IT investments.
For the year, revenues totaled $4.5 billion. Commercial
consulting revenues officially surpassed $1.0 billion,
improving 14.2 percent year-over-year on an as reported
basis and 8.6 percent organically. Contributing to that
topline growth, commercial consulting new bookings
totaled $1.4 billion for the year, for a healthy book-to-bill
ratio of 1.2 times, providing strong revenue visibility.
TRACK RECORD OF GROWTH & RESILIENCE
R E V E NUES
A D JU S T ED EB I T D A


4,009.5
($   s in millions)
4,581.1
FR EE C AS H F L O W
4,450.6


559.4
483.1

417.0

517.2


12.0%
2021
2022
2023
2021
12.2
246.9
270.3

80.6%

2022
11.6%
51.1%
48.3%
2023
2021
2022
Adj. EBITDA as a % of revenue
2023
Free Cash Flow as a % of Adj. EBITDA
1

M O VI N G U P
TH E I T S E RVI CE S
PYRAM I D P RO V I DE S
H I GH E R VALU E ,
H I GH E R M ARG I N
I N C R EAS I N G AD R ES S AB L E MAR K ET
Strategy
Architecture
Design
Systems Deployment
Service Centers
Technical Staffing
Commercial
Federal Government
From a profitability perspective, ongoing expense
management, along with our business stabilizers,
contributed to a solid Adjusted EBITDA margin of 11.6
percent for the year. As our IT commercial consulting
business grows, margins will continue to expand. In
addition, our free cash flow generation was a standout
feature of our annual performance. Free cash flow
improved 54.3 percent from the prior year, reaching a
total of $417.0 million. This represents an 81 percent
conversion rate of our Adjusted EBITDA.
In 2023, not only did we prove the effectiveness of our
operating model, but we also demonstrated that ASGN has
the ideal combination of businesses to position our
Company for continued growth. Our Federal Government
Segment provides mission critical IT services to the
Department of Defense, the intelligence community, and
federal civilian agencies. This segment and industry
vertical offers countercyclical support to balance out our
five diverse Commercial Segment industry verticals, which
service Fortune 1000 and large mid-market companies.
POSITIONING FOR GROWTH
AT THE FOREFRONT
OF TECHNOLOGY
Looking back on the past year, it   s important to
recognize that ASGN   s business today is the result of
many years of thoughtful and proactive planning.
From our heritage as a diversified staffing company, to our
current state as a leading provider of IT services and
solutions to the commercial and government sectors, we
have strategically shaped and purposefully built ASGN
to perform well throughout economic cycles. As we   ve
evolved our Company   s capabilities over the years, our
credibility and history in IT staffing led our clients to pull us
into higher-end consulting opportunities. The IT consulting
market is where we want to be     not only is the market
important to our customer base, but the visibility and
margin are greater and the total addressable market
across the commercial and government sectors is nearly
10 times that of IT staffing.
2
ASGN   s expertise across six diverse industry verticals
opens the door to new revenue opportunities, while our
commitment to investing in our clients' future growth
and success drives our longstanding relationships and
expanding market share.
ASGN consistently invests in six core areas, including:
leadership; recruiting; training and skill development;
technology partnerships; internal artificial intelligence (AI)
tools; and our clients    IT roadmaps. Our clients'
IT roadmaps are being propelled by significant
momentum in the fields of AI, data, cloud computing,
and cybersecurity.
AI has become one of our fastest growing service areas,
as our clients turn to AI to meet today   s business
challenges at greater speed and with increased accuracy
and precision. On the commercial side of our business,
over the past five years we   ve deployed nearly 800
consultants to complete more than 240 AI projects.

2023 DIVERSE END MA RKE TS
(% OF REVENUES )
H I G H ER & G R O WI N G MI X O F
C O N S U LT I N G R EVEN U ES
71%
18%
17%
Consumer
& Industrial
Financial
Svs.
Federal
Segment
52%
48%
45%
44%
48%
52%
55%
Commercial
Segment
TMT
13%
29%
Federal
Government
Healthcare
10%
Business
Svs.
1H 2022
2H 2022
1H 2023
Consulting
A growing number of these projects are now exploring
novel generative AI capabilities. In the federal space, we
are one of the U.S. Government   s top AI contractors
and maintain over 1,000 combined certifications,
accreditations, and awards across practice areas,
including newer available certifications in AI and
generative AI as the technology further develops.
Technology is shifting at an incredibly rapid pace, and it is
essential for us to stay ahead of this change in order to
remain competitive in today   s marketplace. We are
therefore not only developing AI roadmaps for our clients,
but we are also investing in our own internal AI skills and
toolsets. Across the business, we continue to hire subject
matter experts, train our teams, and develop AI
accelerator programs, each with our customers' needs in
mind. We are also leveraging our partnerships with key
technology innovators such as ServiceNow, Microsoft,
and Salesforce, amongst others, to upskill our people and
pilot generative AI applications.
ASGN's work in AI exemplifies our three-pronged
go-to-market strategy, which includes: 1) targeting the
right markets, 2) providing the right IT solutions, and
3) collaborating with the right technology partners.
Underpinning this strategy is our deep, talented labor
pool. ASGN at its core is a people business, and our
ability to find the best professional resources at the exact
time our clients need them to support their IT initiatives, is
what has enabled our Company to differentiate itself for
decades. Our superior recruiting model, which leverages
a primarily contingent labor force onshore and nearshore,
provides a scalable, flexible solution that sets ASGN
apart in the IT marketplace from the traditional consulting
companies that rely solely on permanent bench talent.
2H 2023
Assignment
BALANCED CAPITAL
ALLOCATION STRATEGY
We are making strategic investments in our workforce
and our Company. Our well-rounded approach to
capital allocation, which includes organic initiatives,
acquisitions, share buybacks, and debt repayment,
enables us to make these crucial investments and
gives us the flexibility to allocate funds in the best
interests of all stakeholders.
Beyond organic investments, we continue to believe
that M&A is the most effective use of our capital and
provides the highest return.
O U R B AL AN C ED AP P R O AC H
T O C AP I TAL AL L O C AT I O N (in millions)
484.6

222.8

281.4

273.1

181.3

2021
2022
2023
Acquisitions in 2022 were partially funded by the
proceeds from the sale of a business in 2021.
Share buybacks
Acquisitions
ANNUAL REPOR T 2023
29%
13%
56%
3



shareholder letter icon 4/24/2024 Letter Continued (Full PDF)
 

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