ASGN Incorporated (ASGN): Boston Consulting Group Matrix [10-2024 Updated]
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ASGN Incorporated (ASGN) Bundle
As we delve into the Boston Consulting Group Matrix for ASGN Incorporated (ASGN) in 2024, we uncover the strategic positioning of its various business segments. With a strong revenue generation from IT consulting and a notable $312.2 million in revenue from the federal government segment, ASGN showcases its Stars. Meanwhile, the Cash Cows reveal stability through a 32.8% gross profit margin in the commercial segment. However, challenges persist in the Dogs category, where assignment revenues have declined, and the Question Marks indicate a need for innovation amidst uncertain economic conditions. Join us as we explore these dynamics in greater detail below.
Background of ASGN Incorporated (ASGN)
ASGN Incorporated (ASGN) is a leading provider of information technology services and professional solutions, primarily operating in the United States. The company serves both commercial and federal government sectors through two main segments: Commercial and Federal Government.
The Commercial Segment is the larger of the two, offering consulting, creative digital marketing, and permanent placement services primarily to Fortune 1000 and large mid-market companies. This segment is diversified across several industry verticals including Financial Services, Consumer and Industrial, Technology, Media, and Telecom (TMT), Healthcare, and Business Services. Notably, the TMT vertical has shown double-digit growth, while others such as Consumer and Industrial have experienced modest increases.
The Federal Government Segment provides advanced IT solutions to various federal agencies, including the Department of Defense and the intelligence community. This segment's revenues are generated through a mix of contract types, including firm-fixed-price, time and materials, and cost-reimbursable contracts.
As of the third quarter of 2024, ASGN reported revenues of approximately $1.031 billion, a decline of 7.7% year-over-year from $1.117 billion in the same quarter of 2023. For the nine months ended September 30, 2024, the company generated total revenues of $3.115 billion, down from $3.377 billion in the previous year. The reduction in revenue is attributed to decreased assignment revenues and lower demand in some commercial segments, reflecting broader economic conditions.
Financially, ASGN's operating income for the third quarter of 2024 was $78.9 million, compared to $98.6 million in the same period of 2023. The company reported a net income of $47.5 million for the quarter, down from $59.4 million a year earlier. The decline in net income is largely due to the decrease in revenues and higher selling, general, and administrative expenses, which were $207.5 million for the third quarter of 2024, slightly up from $206.0 million in 2023.
ASGN's commitment to delivering quality IT services and solutions has positioned it as a key player in the consulting and technology sectors, with a focus on adapting to the evolving market landscape and meeting the needs of its diverse client base.
ASGN Incorporated (ASGN) - BCG Matrix: Stars
Strong revenue generation from IT consulting and professional services
ASGN Incorporated reported total IT consulting services revenues of $1.8 billion for the nine months ended September 30, 2024, representing 57.2 percent of total revenues, with a slight increase of 0.3 percent year-over-year.
Federal Government segment shows steady demand with $312.2 million in revenue
The Federal Government segment generated $312.2 million in revenue for the third quarter of 2024, down 6.6 percent from the same period in 2023. Total revenues for the Federal Government segment for the nine months ended September 30, 2024, were $938.7 million, a decrease of 1.3 percent year-over-year.
Commercial consulting revenues increased by 3.9% year-over-year
Commercial consulting revenues reached $285.0 million in the third quarter of 2024, reflecting a year-over-year increase of 3.9 percent. For the nine months ended September 30, 2024, commercial consulting revenues totaled $843.5 million, up 2.0 percent compared to the previous year.
Significant contract backlog of $3.1 billion supports future growth
ASGN's total contract backlog stood at $3.1285 billion as of September 30, 2024, which includes $612.2 million in funded contracts and $2.5163 billion in negotiated unfunded contracts. The contract backlog coverage ratio was 2.5 to 1.
Positive trends in the Technology, Media, and Telecom (TMT) vertical
Within ASGN's commercial segment, the Technology, Media, and Telecom (TMT) vertical exhibited low single-digit growth during the first nine months of 2024, contributing positively to the overall performance.
| Segment | Q3 2024 Revenue (in millions) | Year-over-Year Change | 9M 2024 Revenue (in millions) | Year-over-Year Change |
|---|---|---|---|---|
| Federal Government | $312.2 | -6.6% | $938.7 | -1.3% |
| Commercial Consulting | $285.0 | +3.9% | $843.5 | +2.0% |
| Total IT Consulting Services | $597.2 | -1.9% | $1,800.0 | +0.3% |
| Total Contract Backlog | $3,128.5 | N/A | N/A | N/A |
ASGN Incorporated (ASGN) - BCG Matrix: Cash Cows
Commercial Segment Contributes 69.7% of Total Revenues, Reflecting Stability
The Commercial segment of ASGN Incorporated is a significant driver of revenue, contributing $2.176 billion, which accounts for 69.7% of total revenues for the nine months ended September 30, 2024. This segment has shown resilience in a challenging market environment.
Gross Profit Margin in the Commercial Segment at 32.8%
The gross profit margin for the Commercial segment stands at 32.8% as of the third quarter of 2024, reflecting a slight improvement from 32.5% in the same period of the previous year. This indicates effective cost management and a favorable mix of consulting services within the revenue streams.
Federal Government Segment Maintains Consistent Revenue at $938.7 Million Year-to-Date
The Federal Government segment generated revenues of $938.7 million year-to-date, representing 30.1% of total revenues. The consistent revenue flow from this segment underlines its importance in ASGN's portfolio, despite a 1.3% decline compared to the prior year.
Operating Income Remains Strong Despite Revenue Decline
Operating income for ASGN was $230.2 million for the nine months ended September 30, 2024, down from $280.7 million in the same timeframe of 2023. This decline is primarily attributed to overall revenue challenges, yet the operating income still reflects the company’s ability to maintain profitability.
Cash Flows from Operations Provide a Solid Foundation for Reinvestment
ASGN's cash flows from operating activities totaled $299.8 million for the first nine months of 2024, down from $340.5 million in the prior year. This solid cash flow provides the necessary capital for reinvestment into the business, supporting both growth initiatives and shareholder returns.
| Segment | Revenues (in millions) | Gross Profit Margin | Operating Income (in millions) |
|---|---|---|---|
| Commercial | $2,176.0 | 32.8% | $216.8 |
| Federal Government | $938.7 | 20.3% | $72.3 |
| Total | $3,114.7 | 28.8% | $230.2 |
ASGN Incorporated (ASGN) - BCG Matrix: Dogs
Assignment Revenues Down 16.7% Year-Over-Year
ASGN's assignment revenues have decreased by 16.7% year-over-year, totaling $1.332 billion for the nine months ended September 30, 2024, compared to $1.599 billion for the same period in 2023.
Declining Performance in Consumer and Industrial Verticals
The Consumer and Industrial verticals have shown a decline, contributing to the overall decrease in the Commercial Segment revenues, which fell by 10.3% year-over-year.
Federal Government Segment Showing Slight Revenue Decline of 1.3%
The Federal Government segment revenues also experienced a slight decline of 1.3%, totaling $938.7 million for the nine months ended September 30, 2024, down from $950.7 million in 2023.
Increased Competition in the Consulting Space Could Pressure Margins
ASGN faces increasing competition in the consulting space, which may pressure margins. The Commercial Segment consulting revenues were $843.5 million, up 2.0% year-over-year; however, the overall market dynamics suggest a challenging environment.
Overall Revenue Down 7.8% Year-Over-Year Highlights Challenges in Growth
Overall, ASGN's consolidated revenues for the nine months ended September 30, 2024, were $3.115 billion, reflecting a 7.8% decline from the previous year’s $3.377 billion.
| Segment | Revenue (2024) | Revenue (2023) | Year-over-Year Change |
|---|---|---|---|
| Commercial Assignment | $1.332 billion | $1.599 billion | -16.7% |
| Federal Government | $938.7 million | $950.7 million | -1.3% |
| Overall Consolidated Revenue | $3.115 billion | $3.377 billion | -7.8% |
ASGN Incorporated (ASGN) - BCG Matrix: Question Marks
Commercial segment consulting revenues show potential but are vulnerable to economic cycles.
Total IT consulting revenues were $597.2 million in Q3 2024, which represents a decrease of 1.9% year-over-year. Commercial Segment consulting revenues were $285.0 million, up 3.9% year-over-year.
Lower third-party software licenses in the Federal Government segment.
Federal Government segment revenues totaled $312.2 million for Q3 2024, down 6.6% compared to Q3 2023, largely due to reduced third-party software license revenues.
Need for innovation to capture new market opportunities amidst revenue declines.
Consolidated revenues for the first nine months of 2024 were $3.1 billion, down 7.8% from $3.4 billion in the same period in 2023.
Book-to-bill ratio of 0.9 indicates potential issues in securing new contracts.
The book-to-bill ratio for the trailing twelve months ending September 30, 2024, was 0.9, indicating that new contract awards of $1,114.3 million were less than revenues of $1,031.0 million for the period.
Uncertain economic conditions may impact future growth in both segments.
Net income for the first nine months of 2024 was $132.8 million, down from $169.0 million in the same period in 2023.
| Segment | Q3 2024 Revenues (in millions) | Q3 2023 Revenues (in millions) | Year-over-Year Change (%) |
|---|---|---|---|
| Commercial Consulting | $285.0 | $274.2 | 3.9% |
| Federal Government | $312.2 | $334.4 | (6.6%) |
| Consolidated | $1,031.0 | $1,116.8 | (7.7%) |
| Metric | Value |
|---|---|
| Book-to-Bill Ratio | 0.9 |
| Net Income (9M 2024) | $132.8 million |
| Net Income (9M 2023) | $169.0 million |
| Consolidated Revenues (9M 2024) | $3.1 billion |
| Consolidated Revenues (9M 2023) | $3.4 billion |
In summary, ASGN Incorporated's position within the BCG Matrix reveals a mixed landscape of opportunities and challenges. The Stars reflect strong revenue generation, particularly in the Federal Government segment, while the Cash Cows provide a stable revenue base, essential for reinvestment. However, the Dogs indicate potential market saturation and declining performance in certain areas, necessitating strategic focus. Meanwhile, the Question Marks highlight the need for innovation and vigilance in a fluctuating economic environment. Overall, ASGN must leverage its strengths while addressing vulnerabilities to navigate the complexities of the consulting market effectively.
Article updated on 8 Nov 2024
Resources:
- ASGN Incorporated (ASGN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ASGN Incorporated (ASGN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ASGN Incorporated (ASGN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.