Good morning, everyone. Oh, you can hear me. Okay, good. Welcome to ASGN's 2025 Investor Day. I'm Kimberly Esterkin, Vice President of Investor Relations for ASGN. For those I haven't had the privilege of meeting yet, I've been supporting ASGN's investor relations efforts since 2019. Just under 3 years ago, I was given the incredible opportunity to come in-house and lead the IR platform. For those of you joining us today in New York, thank you for coming to the New York Stock Exchange to support ASGN. It's great to see such good turnout today. For those of you listening on the webcast, thank you for tuning in. We hope you enjoy the presentation, and we look forward to connecting with you in person over the weeks and months ahead. Before we begin, everyone's favorite, the Safe Harbor Statement.
During today's discussion, we will make certain forward-looking statements that reflect our current views, expectations, and assumptions about future events. These statements are subject to risks and uncertainties that could cause actual results to differ from those discussed today. We will also be speaking about some non-GAAP financial measures. I'd encourage you to look at the appendix of today's presentation, as well as our SEC filings and quarterly earnings materials on our investor relations website for a reconciliation of GAAP to non-GAAP. On to the agenda, and we have a great one for you today, one that highlights how ASGN is advancing its strategy and positioning for the next wave of growth. We'll start with Ted Hanson, our Chief Executive Officer, who will speak about his views on the evolution of ASGN, as well as how we're leading at the intersection of technology and high-growth markets.
Next, Shiv Iyer, our President, will speak about how we're positioning ourselves for that next wave of growth through innovative platforms and accelerators, focused IT solutions, and powerful strategic alliances. We'll give you a deep dive on certain of those IT solutions, starting with Heather McKinnon Miller and Marshall Thames, heads of our commercial and federal AI practices. They'll speak about how we're leading through data and AI. Next, Steve Hittle, Chief Information Officer for our federal segment. Steve will speak about our cybersecurity practice and how we're protecting today's enterprises in an era of evolving cyber threats. After that, we'll have our first Q&A session, and then we'll take a break. Come back after the break. To start off the second half, Shiv Iyer, our President, will come back on stage. He'll speak about driving operational excellence to unlock value.
After Shiv, Ted Hanson, our CEO, will come back with our CEO of TopBloc, Christopher Skinner, who will speak about our M&A strategy and particularly highlight our most recent acquisition, TopBloc. Everyone's favorite, Marie Perry, our Chief Financial Officer, will speak about our financial progress, as well as our capital allocation strategy and how we're positioning ASGN for sustained growth and, of course, strong shareholder returns. Ted Hanson, our CEO, will come back on for some closing remarks and one more Q&A session, and we will open it up to an executive lunch. It is my pleasure to welcome our Chief Executive Officer, Ted Hanson. Advance the slide, Kim, to officially kick off our 2025 Investor Day. Thank you.
Great job, Kim. Thanks. It's so great to be with everybody today. This is one of those things that you don't get to do every quarter or even every year. We were last together in the fall of 2021 to talk about the business and really frame our going forward strategy and what we thought we could do over the coming years. Here we are today, 4 years later, ready to do it again. I think I'm going to repeat, repeat, repeat today about this business transformation. I mean, it's really remarkable what this leadership team has done to transform the business. We look forward to speaking about that today. Welcome to all of you, our analysts, our shareholders, the ASGN management team, many people on the webcast, other stakeholders. It's so great to be able to have this opportunity to speak with everyone about the business.
Most of you know me over many years. I'm Ted Hanson, the CEO of ASGN. I came to the public company by way of the APEX Systems acquisition in 2012. Since 2019, I've been the CEO. Today, we're going to, you know, here in the beginning, really talk about the positioning of the business. Shiv is going to carry it on from there and really get deeper into the components of our strategy and where we're headed. As I tell you every time we meet, we sit at the intersection of where technology meets a business opportunity or business need. We've been transforming the business. A public company with, depending on how you count it, 6 to 7 individual units, now thinking about how do we come together and serve more needs for the client together in a more forceful way.
You're going to get a sense today of where we're making investments around our solution capabilities and how we're driving higher value, higher margin work in those areas, executing a discipline shift. I mean, we're certainly going towards a higher value model business. We have been for many years. Today is a refinement and an optimization of that strategy, which we'll speak about along the way. At the end of the day, it always comes back to accounts. You know, you're going to hear us talk a lot about accounts today. Why now? You know, I've had some people say, well, why do your investor day today? The market is choppy, for lack of a better word. You aren't quite back to growth rates that the company has historically had. In our opinion, now is the exact right time to be here with you talking about the business.
It's evolved so much from its roots as an IT staffing company, now 70% of the business, much more consultative. I think you're going to be really impressed today as you talk to some of our leaders about the things that we can do in the marketplace. We're going to talk to you about the next phase of growth and how do we get there, our next wave strategy, which is really unlocking the next wave of growth and value creation inside of the business and really purposefully doing it as one business. We've got a great leadership team. I'm really proud of them. They're purpose-built for this. We're going to get a chance to introduce the leadership team and hear from them. I'm really excited to talk about our acquisitions and highlighting Chris and TopBloc because it's really investments in the future.
It's about how do you spur growth in the future and how do you meet your clients' most pressing needs. Many of you know us. It's a $4 billion IT services provider. We've been on a march around building this gold nugget account portfolio for years and decades. 70% of the business is commercial, think Fortune 1000 type accounts. 30% is government, serving kind of the most attractive government agencies within that industry sector. EBITDA margins of double digits. They've proven tremendously resilient here in a difficult 24 months that we've just been through. You know, before I became the CEO, we were recognized as a best-in-class IT staffing company. It is still kind of our legacy and the roots of who we are. It differentiates us in the market. And it created these enduring, trusted long-term enterprise account relationships that we have.
Over the last 6 years, we've really been sharpening our focus, making sure that we were raising our capabilities to meet the customer need. We made some divestitures of businesses that were less strategic. We moved investments from areas that were needed to be pointed at things that were higher value in the future. We've made some key acquisitions here over the last 2 years, GlideFast in our ServiceNow ecosystem, TopBloc in our Workday ecosystem, and a divestiture of Oxford. Now here we are in 2025 thinking about the future. We're emboldened as now thinking about coming more forcefully at the market as one company with this very attractive solution set and this gold nugget account base. We're certainly set up to transform the business, to find margin expansion on the way there, and to expose the opportunities as one company coming to the market.
This is the team you're going to hear from today. It's purposely built. If this place was only as much as I could think about between these 2 ears, we'd be in real trouble. This is a management team that's really capable, experienced, and has been where we're going. We also have the good fortune along the bottom row there to have some of our solution leaders in the room today. I think you're going to be really impressed to hear from them. They'll get a chance to introduce themselves as we come up to stage. Every great leadership team needs a supportive, engaged, and talented board of directors. We certainly have that in spades. This board of directors has been refreshed, for lack of a better word, over the last 5 or 6 years. They're super talented.
They take their job as a fiduciary on behalf of shareholders really seriously. They add a lot of value to strategy. Most importantly, with all of that, they're supportive of management. Once we have a strategy, they're super supportive of us as we go out and try to execute that strategy. Representing the board here today is Patty Obermeyer. Patty, raise your hand. Thanks, Patty. It's great to have her today. She's our newest board member, but super effective here, even in her first year to 2 years. This is a business that is consistently recognized for excellence. I think that talent has their choice of where they want to go and work. It is really important for us to make sure that we're the most attractive place that they can spend their time and energy and effort serving our clients and the business.
We are also consistently one of the highest-rated firms in net promoter scores amongst our peer group, which is about what our clients make their own referrals to colleagues, either inside their business or outside the business for our services. When clients say that to you through net promoter scores, it's a super encouraging stat to have. We have top-of-the-chart results in that every year. Really super proud of our last 2 acquisitions, GlideFast and now TopBloc, just this year being named Partner of the Year in their respective ecosystems. Remember, we compete with the global integrators. We compete with everybody, if you will, of the big consulting firms in those technologies. That says a lot when you're the Partner of the Year. We're super proud to have that recognition. Okay, let's turn to the market we serve.
Our legacy total addressable market here was really around the IT staffing programs. That's with the other disciplines around creative and digital marketing, about a $50 billion marketplace. It's a good grower. It has been in the past. It has its challenges right now, but we recognize that it has volatility to it. That's not a new recognition. Over the years, we've been moving ourselves in partnership with our client into a much more dynamic, larger addressable market that's more resilient. I think you can see in our numbers that here we're moving into higher margin areas. We're doing work that's more consequential to the client with responsibility to get to certain outcomes. We now have brought ourselves into about a $700 million addressable market. It's large, dynamic, highly fragmented, both opportunity for organic growth and for strategic M&A.
We can't have any conversation without talking about AI, but let this be the kickoff of that part. You're going to hear a lot about it today. I think what we, you know, the thing I really wanted to say here was it's probably good to think about this chart from Gartner kind of split in half. On the left-hand side, there's been new technology here, obviously, especially as ChatGPT came out 2 or 3 years ago. There's been enormous inflation of expectations now supported by the tremendous amount of capital going into the build-out. On the consumer side, an enormous adoption of these technologies, right, as we use them every day. I know we all probably don't use just one of them. We probably use 2, 3, or 4, whether it's Gemini or Perplexity or ChatGPT. That is real in the market today.
What's still a developing story on the right-hand side is large enterprise adoption of AI and specifically agentic AI. While there's a lot of conversation around that, and now you can see real functionality being driven by the big enterprise software firms, the corporate enterprise client has not yet gotten there. Why is that? Most companies still remain focused on proof of concept and pilots because anything that's of any scale is not quite, you can see many reports out there, not quite meeting the ROI objectives that are set out prior to the project. The expectations have outpaced what's really possible. There is a synchronization that needs to go on there between capabilities and what the expectation is.
I think most importantly, the clients are finally realizing among other stakeholders that the tech debt that's associated with all their legacy systems is a real impediment to recognizing return of AI and agentic AI at scale. For years, our clients and our own firm have spent much time and money putting in enterprise-wide systems that were oriented to departments and siloed, and data was spread in all kinds of various places according to that matrix. That is a huge obstacle for realizing the promise of AI. What's the opportunity? Look, I think our clients are now recognizing that they have a lot of tech debt to deal with in order to get to their objectives around AI. The big enterprise software firms are realizing that they can't sell through agentic AI without our help.
I think we've got some great examples here recently where just in the last few days, our partnership with Salesforce, where Salesforce is saying, "Look, we're not getting the pull-through adoption of agentic AI. We need you to be our 360 partner to help engineer these into our clients' custom IT environments." We're beginning to see that happen, enterprise system by enterprise system, whether it's ServiceNow, whether it's Workday, and others. The thought that maybe agents would just come out of the box when you adopted one of these enterprise systems has proven to be a false expectation. I think it really speaks to what the client need for us and the value proposition is for our business in order to help them to get to the promise of that. It is a tremendous opportunity.
We're perfectly positioned with this enterprise customer base, with the years of relationship and work we've done with them for understanding their unique IT environments and being able to help them engineer these agentic AI opportunities into their business workflows and processes. This is really a leave behind for each of you, maybe for later, which is just a few comments from our customers about what's important to them in terms of who we are at ASGN and what we do for them. I think even in the last week, maybe just to illustrate some of the early-on things that are happening with agentic AI, I was talking to a Fortune 500 utility company. Obviously, they're on quite a run right now. That is an industry in our portfolio that for decades has been kind of a really stable but slow grower kind of place to be.
Now it's one of our most dynamic industry segments. We were talking about a simple use case of agentic AI with ServiceNow, which made total sense of having agents monitoring field equipment. Think about big wind turbines or meters or other things and having metrics and data flowing in from those sources, if you will, and then being able to have agents receive that and then decide what to do with it. Can they reset something and fix it immediately? Can they forward it to a responsible party, whether that's a person or a department, more quickly and make their own decisions about where this goes? Can the agent resolve it or not? It was just a simple, really, it wasn't a terribly expensive use case.
It was more of one of these proof of concepts, but it was like real-world stuff around how clients are going to be able to get to better outcomes, more productive outcomes with agentic AI. A great example of how we, being embedded with that customer for all these years, are able to connect the dots on that because, as you can imagine, there are various systems in the field. There are various enterprise systems inside of their operations. Our understanding of all that, we're able to take agentic AI and make those connections. Just a great example of a customer really being able to take advantage here early on of an agentic opportunity.
If you think about that in the context of really what is our promise to our corporate enterprise customers, our value proposition is really about the engineering of all these technology solutions into their custom IT environment, right? No one customer, even if they're both big money center banks, have the exact same IT environment, nor do they use the exact same applications. Being embedded with them for all of these years has given us the right to play here and win as they pursue these outcomes. It's really about bringing technology together with talent, which is the foundation of our business in the newest technologies that we help them provide adaptive engineering to help them get to their biggest opportunities. That leads to our promise, engineering the adaptive enterprise, right?
We're no longer just looked at to say, "Look, I need a specific piece of technology talent here or there on a one-off basis. I need ASGN to be my partner in bringing talent, engineering capabilities, and technology together to meet all of their most pressing needs." As we do this, we have an opportunity to build on our strengths as one company. As we come together more and more as one company, both in our go-to-market approach and in how we harmonize our solutions and in terms of how we play off of all the great qualifications that we have in our individual business units, we have a really big opportunity with all of these customers to bring all of our services in a way that we've never done before.
In order to get there, we've entered into an initiative over the last weeks and months to think about our brand in the marketplace, right? Our ASGN brand, which represents all of our individual units, has really always been a customer-facing brand, excuse me, an investor-facing brand, right? If I were in the customer marketplace and I said, "Well, I'm the CEO of ASGN, and we're so thankful to be your partner here," the customer would say, "I'm not really sure who you are, but APEX is pretty darn good, right? Or ECS is pretty darn good." It's a missed opportunity for us not to be able to bring all of this to bear in front of our customers. This rebranding initiative is going to do a few things.
We're going to increase our brand equity because we're going to bring one powerhouse brand into the marketplace. It's going to represent all of our teams, all of our units, all of our solution capabilities, all of our past qualifications to bring a much more comprehensive portfolio of services to our client. It's going to enhance our own collaboration within the firm. Our teams have been really supportive of each other and really work with each other in the best interests of each of our individual units. At the end of the day, they're in a certain unit and a certain brand. This is just going to continue to break down those silos so that they can work more seamlessly together. This is going to simplify client engagement.
There are a lot of times where we have a client opportunity where we'll have multiple salespeople trying to serve the client and get to the right outcome just because they come from different units. The same thing can happen on the solution side. This is going to simplify all that. We are going to take this opportunity to modernize all of our brand elements. The look and the feel, a name, what's the visual identity of that? What's our promise, as I mentioned earlier, around engineering the adaptive enterprise? How do we position as one business in front of these customers? It's going to be a real opportunity for our business going forward. With that, I'd like to announce today that we're rebranding the name and identity of ASGN to EverForth.
EverForth is really about the forward motion of leaning in for our clients, staying up with the latest changes in technology, skating to where the puck is going to be and be able to serve all of our clients' needs. It's about bringing technology to meet a business opportunity and problem. It's about engineering that opportunity into the customer's technology environment. It's about having the expertise at the moment to be able to achieve all of those goals. With that, I'd like to turn to a quick video here and give you the first glimpse, if you will, of some of the elements of the brand that we're going to be bringing to the market in EverForth.
One Pixel tells part of the story, but together they create a world of possibility. One Safeguard protects. Together, resilience is engineered. One System Supports. Connected, they power enterprises.
Alone, each is powerful. United, they become unstoppable. Now, the ASGN brands are coming together to bring deep expertise in data and AI, cybersecurity, cloud, digital engineering, and customer experience to every client, multiplying our impact and forging a force greater than the sum of our parts. Introducing EverForth, a technology solutions company that helps organizations solve their most complex challenges with precision, speed, and insight. Because adapting to change isn't a moment, it's a mindset. EverForth, technology, engineering, expertise.
The ASGN name, which is the ticker symbol of the company, has had a tremendous run over decades and years. I think the opportunity to transfer that brand equity, both from ASGN and from our units over a thoughtful period of time, is going to really go a long way into helping us meet the greatest needs of our customers.
It's also going to be unifying for our team. They're finding out now, right now, since we've released it to the public, with a really, what I hope is a thoughtful message and also a very kind of clean strategy on how we get there over a responsible amount of time. I think, too, a lot of times when you undertake efforts like this, someone will say, "Well, how much does that cost?" If you think about it today, we're supporting 7 brands every day in the marketplace on an ongoing investment to try to make them the best brand they can be in their respective markets. Now we're bringing all that together as one. There is operational efficiency captured in all this, not additional layered spend in the future. It's included, and later today, we'll talk about our financial targets.
While it's not terribly material, it is just one more piece of operational efficiency for the business as we go forward versus just new layered-on expense. I think, hopefully, you've gotten a little taste here through these first few slides that we're positioned in the right place to address all of our customers' most pressing needs. Through that, addressing various trends that are going on in the market, I spoke to rising IT complexity. There's nobody better positioned because of our model to be there with the right skills at the right time to help our clients deal with the ever-changing landscape of the need for expertise and all these new technologies. We talked about the technical debt that exists within our enterprise customer base. I think that's mentioned from time to time in the markets, but it's certainly not appreciated.
It will be here as customers begin to finally try to capture the promise of what comes with their AI opportunities. There has been a buyer trend going on in the market, which is movement towards more outcome-based solutions. I think, as I've talked to investors along the way and on our earnings calls, we've spoken many times about this shift where the customer says, "Well, look, I understand I could just capture these resources through the IT staffing program, but that's not going to help me because then the onus is on me to get to these outcomes. I need you to be here with a solution with some skin in the game and defining what the investment will be for that solution and what the return is." We have real responsibility in all that and an enhanced value proposition for the customer around that.
You are going to get a great example of that through many of our solutions that we talk about, especially as we get into the conversation around Workday and TopBloc. We have unique competitive advantages to meet those trends. It all starts with industry expertise. Commercial technologies are not all adopted the same way. Banks versus healthcare companies versus consumer industrials, on and on and on, adopt all these technologies in a different way. Bringing technology together with industry expertise is the key. It is why our customers rely on us. More and more partnerships with the tech firms where we come to market together, also with assets and accelerators and other IP to help them to get from start to value in the shortest amount of time possible is part of these outcome-based trends.
It allows us to really lean in on our superior delivery model. A lot of our big traditional consulting competitors have a large bench of workforce. All you hear about today is they're retraining, upskilling, and all these things. More than 80% of a team on any project is put together by us in a custom-fit way through our IT staffing capability. In that, you get the exact right skill with the exact right industry expertise, the right tenure and experience in the market, and a better price point. As you bring all that together, customers have gotten really smart on this. We are seeing a big adoption of our services around these unique competitive advantages. Now, we need to bring all this into the market with a certain strategy. Today, we're going to talk about our strategy, which we call Next Wave.
Next Wave is about unlocking the next wave of growth and value creation for the firm. Many of these elements of this go-to-market strategy already exist in our business today. I like to think about this as a refinement and an optimization of our current path that we've been on here for many years. I'm going to focus on the left-hand side of this for a moment, which is where we play in the marketplace. I'm going to let Shiv Iyer, our President, talk more in depth about what are our winning attributes as we approach the market and what are the key enablers of that. Gold nugget account base with industry diversification. If you were building a business today, you would want large in IT services, you'd want large enterprise accounts, you'd want many years of tenure with those accounts.
You'd want those accounts to be diversified by industry to give your portfolio balance. That is exactly what we are here at ASGN. No one industry segment here represents more than 21% of revenues. As difficult times ripple through the marketplace, typically it happens by industry segment. Having your business spread out, diversified among different industry segments is really key as you build a business for the future. These all provide certain strategic growth areas as they are going through their cycles of higher spending on IT to get to the solutions they want to get to. You've heard us many times say financial services and TMT particularly are really important right now in order to get back to better growth rates, if you will, across the whole portfolio because those are really where technologies are first adopted, if you think about all the industries on this wheel.
More and more, we have a unique advantage here around how solutions play across both now commercial and federal. More than ever, the federal customer is wanting to adopt commercial technologies. Now, they're having to learn how to receive them and deploy them because it's different, if you will, than in the commercial industries. Again, that's our innate capability and kind of our right to win there because we've been embedded with these federal customers in our ECS business for all of these many years. There are also certain technologies that more than ever today are playing back across from federal to commercial. Certainly, cybersecurity is one of those.
You're going to hear from Steve Hittle here in a few minutes about our capabilities in cybersecurity in the federal space and how we've been able to port those into the commercial industries and win more and more opportunities there. Also, on the AI front, the government customer has been the first mover here on AI. If you go back many years when ECS came to our business in 2018, the gold nugget of that business was their work on Project Maven, which we're going to highlight today, and using AI to collect intelligence from across the world and really understand at a moment's notice what is going on. To me, one of the highlights of this business is the growth algorithm.
I think we're at a spot where we can really leverage off of the pillars of this business to create a long-term growth algorithm that, at the end of the day, is going to continue to create value for shareholders. Sustainable revenue growth, I mean, as Shiv takes you through the solution areas where we're going to be focused, there's demonstrated long-term future growth in all of those solution areas. We have the enterprise customer base who are going to be the highest spender on adopting all of these solutions over the coming years. We have opportunity for margin expansion as we continue to come up the pyramid that we talk about so many times in our one-on-one meetings. The value proposition increases because of the complexity of the solution that we're providing. We're going to get expanded gross margins from that.
You've already seen that demonstrated here over several years inside of our business portfolio with commercial consulting. The second thing that's going to happen is just in business mix shift, we're going to get an expansion of gross margin. Naturally, over long periods of time, our commercial business is going to grow faster than our federal business. With that comes a favorable mix shift. We also have the opportunity, which Marie is going to discuss later, to be even more and more efficient in our operations and really change, to some degree, the structural cost components of this business. All 3 of those things together are going to provide margin expansion over the coming years. It's a business that's known for high free cash flow. We don't have a lot of CapEx.
We have an increasing margin opportunity here, which is going to support free cash flow generation. The opportunity to allocate capital for the highest return for shareholders is also present. When you put those things together, it gives us a lot of confidence that we're going to be able to create long-term shareholder value here over the coming years. That is really the investment thesis. As we go forward as one company and we bring growth together with margin expansion and free cash flow strength, we're going to take advantage of an opportunity in the market, partly because of our competitive advantages, partly due to how we're transforming our business model as going to market with one business.
I hope you see today that there's a clear and focused strategy and a management team here that's ready to continue to deliver on it and take advantage of our differentiated delivery model. Through all those things, there's going to be a value creation opportunity here and a commitment from this management team and this company to continue to allocate capital in the best interest of shareholders and apply above-market returns. With that, I'd like to invite Shiv Iyer, our President of ASGN, to the stage. Thank you.
Thank you, Ted. I'm Shiv Iyer, and as President of ASGN, I oversee our commercial and federal businesses. I've spent about 25 years in the consulting and technology services industry, most recently at Accenture, running Accenture's consulting and industry X businesses for the Americas. I'm pleased to be here.
I've got to know some of you through our calls, and I'm hopeful to get to know more of you as we go through the day today. Taking off from what Ted outlined earlier, I'm going to go a little deeper into some of the elements of our strategy, including how we see the threat and the opportunity from AI, how we're focused on the right solutions portfolio, and in elevating our strategic partnerships. We believe through these actions, we can not just play defense, but play offense with the large addressable market that Ted alluded to. As with any presentation in today's day and age, we can't go any further without talking about AI. Let's just talk about AI. Now, there's not a single day, it's the most dominant topic on people's minds.
There's not a single day that goes by when we don't see something talked about around AI. We just spoke earlier about the discussions on the AI bubble. Every day you see a report, and these reports range from, "Hey, SaaS is dead. We don't need developers anymore. Services are dead." That's one side of the equation. The other side of the equation is there's a lot of reports which talk about AI creating new jobs, AI creating workforce opportunities. If you look at reports from McKinsey or the World Economic Forum, they talk about creations of millions of jobs globally and in the U.S. economy. That's the paradox. That's the sort of risk-reward balance that we're looking at every single day in this business, right?
As we look at this, and you look at what the opportunity set is, we think there's a massive opportunity for services. Just at this very moment, if you take a step back and think about what's happening with the infrastructure build-out, the numbers are in the multi-trillions, 5% of GDP. We're seeing a surge in demand for specialized services just associated with infrastructure build-out, whether it's on the networking side where there's a need for networking services because as computing gets pushed out more to the edges, communications providers are refreshing their ne2rks. Now, that's creating opportunities for us purely at the infrastructure layer. Data center build-out, again, opportunities for us, right, as you think about this. There are just tons of services that are coming in at the infrastructure layer.2
As this model evolves, there's going to be more around the application layer and how do we make all these applications work. As we think about AI, are there near-term headwinds? There are. Sentiment, clearly. We think there are expectations. In many cases, the expectations are somewhat unrealistic and aren't panning out the way we think they would pan out, right? That creates pressure. On the flip side, if you think about AI, there are 2 things that I would say are truisms when it comes to AI. The first is the pace at which this technology is evolving and changing is driving massive amounts of complexity in the architectures for our clients. Complexity equals opportunity for services companies. That's sort of the first truism.
The second one is really that many companies aren't ready to take advantage of what this technology has to offer. Ted talked about legacy debt. Their tech stacks, their data, their talent is not ready to take advantage of this because they don't know either how to integrate these, how to get themselves up the curve to integrate these technologies, and again, creates massive opportunities for us. Net-net, as we look at this picture, all the noise notwithstanding, we think the opportunity for us far outweighs the risks. When you're in a situation like that, it's always important to take a step back and say, "Are we walking into this environment operating with certain inherent structural advantages?" We are. Ted talked about this, right?
We have a very unique business model, which we think is a real differentiator because it allows us to keep pace with the change of technology and the rate of change of technology, right? The second thing is our account portfolio. We've built this account portfolio over years, and we've helped these clients navigate waves of technology change and continue to deliver results for them. There's a level of trust that this wave of technology change is, again, something that we can navigate with them, right? When we do those things and we complement it with M&A and the right solution and capability areas, right, and build these capabilities around us, we're well positioned. Lastly, one ASGN, and Ted talked about it. There's an increasing demand for commercial solutions in the federal segment, and we have some really powerful capabilities there.
We also have an ability to take solutions from the federal segment and start to translate them into the commercial segment. You'll hear some examples of it. We think that our ability to do this, to navigate the shift, is from a position of strength, and we can actually play offense. Bringing us back to AI, what's the real impact and what are we seeing out there? For clients, they're questioning everything, the whole business model. How do we make money? How do we do work? How do we make product? How do we ship product? How do we engage customers? What they're doing is there's a lot of activity around proofs of concepts, pilots in each one of these domains. Some clients are seeing results and some aren't, right?
The number one question that I think everybody has read is whether you call it scale it, whether you call it enterprise adoption, is the number one question. How do I get from what I'm doing in pockets to really create value at an enterprise scale? What really is stopping the scale-up? The number one thing, and if you read reports from BCG or Bain or any of these consultancies, the number one thing stopping scale-up is talent and the access to talent with skills, with deep expertise in these technologies, right? There in itself, you can start to see where the opportunity set lies. The second thing around scale-up is really, as I talked about, data readiness, infrastructure, and the ability to deploy AI securely and address the vulnerabilities that come across as you deploy AI.
I don't know if any of you read the recent press release and article from Anthropic. There's a Chinese threat actor which used agents to execute cyberattacks. When you think about that, it just ups the ante on security to a whole new level on what you need to be able to deploy AI. The heightened sense of importance of cybersecurity, you can start to see with that. The third thing is, as we start to look at this, and again, this ties into the strategy, is where are our clients deploying AI? They're doing it on the platforms and the technology stacks that are sitting within their environments. The need for understanding those stacks, build expertise around those is critically important. That's what we're focused on.
Last but not the least, like every one of our clients, we're thinking about AI in our own context. How can we use AI within our organization to drive productivity, to drive efficiency, and as a margin lever? I use the word margin very carefully because a lot of the discussion around AI today has shifted away from classical use of AI to agents and productivity and efficiency and loss of jobs. We think about it not just from that context. We think about it also from the context of growth. Things like how do we upskill our salesforce? How do we enable our salesforce with faster, better information to engage with clients? It is really an overall opportunity for margin expansion, both from a revenue perspective and a cost perspective.
Again, bringing us back to speed and scale, both are important to win in this race. I think we have a business model that's really tailor-made for it. How are we preparing ourselves for the age of AI? 3 big broad buckets, if you may. The first is, what are the AI solutions that we're bringing to our clients? I'll talk about that in a minute. The second is, how can we deploy those AI solutions at speed and pace within our client environments? The third is, how do we build and test things within our organization that become opportunities for us to go talk to clients about? Almost lead the way with these technologies in some sense. If you come back to the left of the page on the client AI solutions, we think about it sort of in 2 broad vectors.
The first is what I call horizontal AI solutions, right? That is things that you can deploy across any client. We have a comprehensive suite there. We can go all the way from AI literacy to building use cases to talking about data, right? That is one set of things. The second is specialized AI use cases that are specific to an industry or specific to a client, whether it is deploying AI in a pharmacy environment or underwriting for insurance or AI in manufacturing environments, right? In order to do all of that, we have to start to build our own IP, our own assets, and we are investing in those. I will not steal Heather and Marshall's thunder here. They are going to talk ad nauseam about that stuff as they come on. The last thing, we are not waiting.
If you saw the Salesforce announcement that we just put out, a big piece of that was how do we adopt? We use Salesforce as our CRM platform. How do we use agents within our organization at scale? We're starting to do that in several areas. These are great proof points to take to our clients. We think we're starting to make very, very good progress on all 3 of these vectors. Bringing us back to strategy next wave. Ted talked about the left side of the page, the attractive markets that we're in, the client portfolio that we have, the core solutions that we're playing in. I think the million-dollar question in all of your minds is, you know, everybody has that. What's different? How are you differentiating yourself? What's different about how you're thinking about how you're going to win in this marketplace?
That's, I think, the million-dollar question. I want to start really at the top here, right? Over many years, we've built deep industry expertise and have a very granular understanding of our clients' environments, their business problems, and their challenges. That's always the bedrock of anything we build our differentiation on. When you layer on top of that the investments that we're making in IP, in our accelerators, based on the understanding of those challenges, we have monetizable assets that we can actually deploy to accelerate value. We can't do any of that if we're not tied in closely to our partners and staying ahead of the curve on where their technologies are going. Chris will talk about some of that stuff. That's part of why we're tied in with Salesforce and ServiceNow because they're constantly evolving their product, and we have to evolve our capabilities alongside them.
That's really how we think about winning in this market. I'll click into each one of those in a minute, but really building on the foundation of knowledge that we have about our clients, the industries they operate in, and then building the differentiation on top of that. This is a very, very important page, and I want to spend a little bit of time on it at the risk of maybe spending too much time on it, but I think it's very, very important. Ted talked about a solutions portfolio. I talked about accelerators, and I talked about partnerships. Now, there's probably any presentation that you look at from a technology services company will have all 3 of these elements, right? What's different? What are we doing? How do we think about it? How do we approach this from a strategy perspective?
The solution areas are very clear, and we'll talk about why those solution areas are attractive, right? The key thing here is the interplay of these 3 elements. What do I mean by that? The process of maturation for us really has taken us from saying, "Hey, ASGN, help us with something," and we go help you with something to the point where now we're talking about repeatable things. Rather than the client asking us for X, us saying, "Mr. Client, we think you have a problem in this area with this technology. We have a perspective. We have an asset. We can help you solve that." The pattern recognition, the repeatability of what we're doing and building assets around that is the critical part of the maturation.
If you build assets without a firm understanding of what those repeatable challenges are in these deployments, they're just experiments. They're R&D experiments. We're building assets that are relevant in the context of these repeated challenges that we see. When Chris Skinner, who comes down later in the day, talks about it, his entire TopBloc business was built on this premise of accelerating deployments, addressing repeatable challenges, building assets that automate, and now we're doing that with an AI-first mindset. Last but not the least, right? It's the partnerships. These partners give us access to their technologies ahead of the curve. We're able to experiment with them. We're able to co-engineer with them. That gives us a leg up as we play in this space. Won't spend too much time on this page. I'll just reground us really, really quickly.
There is a reason these solution areas are critical and important. The first is, as you can see from this page, they're all growing at high single digits or double digits. Sort of point number one. The second point is these are all solution areas in which we believe we have a right to win based on the work that we're already doing or the work that we think we can do in collaboration with our partners. The third thing, in this day and age of AI, it's not just about deploying these solutions individually. We're taking the lens of interoperability. Because no matter which client you walk into who's thinking about AI, they're going to have some enterprise platform, whether it's SAP, Oracle, Salesforce, Workday, any of those. They're going to have some data in the cloud. They're going to have some needs for customer.
They're going to have some needs for cybersecurity. They're going to have to think about all of these elements if they have to truly adopt and scale AI at an enterprise level. The interoperability and the ability to engineer that interoperability is also a massive opportunity. It's not just the point solutions, but the ability to make all of these work in this day of AI. You see the talent solutions line along the bottom? We've always been there. That's a complement to everything we do. Ted talked about the uniqueness of our model where we can bring these skills and talent in each one of these areas at speed scale, right? That's how we think about these solution areas because I think these all have massive runway headway for us.
What exactly do we do and what are we delivering to our clients in each one of these solution areas? I'm not going to talk about this in the abstract. I'm really going to start to use some examples to bring these to life. Let's start with data and AI, and I'll pick some of these areas to talk about. Let's talk about data and AI for a moment, and let's start at AI. I talked about the idea that in AI, we have a solution spectrum that goes from AI literacy all the way to scaling AI. I hope you saw our announcement on our AI Factory. Again, Heather is going to talk about it. That's a comprehensive framework to take AI enterprise-wide. One great example on the AI side at the top end of the spectrum around use cases.
For a professional services company, which has a lot of documentation, and this documentation is tied into regulatory things. When a small piece of regulation changes, hoards of documents have to be updated. This firm, a professional services firm, was trying to crack the nut on this for a very long time, and they got to a certain point. Beyond that certain point, they could not make progress. They called us in. We built an agent that cut short the amount of time it takes to update these documents from months to weeks, right? We are right there at the use case level.
Now we're working with Databricks on the other side of the spectrum on AI to get data readiness going, where we are now talking about working with Databricks and other partners to suck in data from distributed assets on the field, on top of which we can build AI models. Now, if you think about software development, we've got our own proprietary Dev Labs, which is a lot of open-source-based stuff, which allows us to build accelerators, which we can use for our own work, but also work with clients on solution delivery. Customer experience. You know, through our Creative Circle teams, we have a long history of serving the marketing departments of a lot of enterprises, enabling their own in-house agencies. So we've built this framework on what we call agency excellence, which allows us to truly understand the workflows that go in the entire experience journey.
Recently, for a large pharma client, we were one of the 3 partners chosen to take the next logical step, which is to start embedding AI into those workflows. Our ability to truly understand the process, those workflows as a creative partner, allowed us the right to play in embedding AI into those workforces, right? Let's talk about cybersecurity for a moment, right? You'll hear from Steve Hittle shortly, but I will give you a little teaser here so that he can come in and then wow you with the sizzle. The teaser here is that for the Army, we secure 800,000 endpoints in the federal space. We are the 24x7 SOC for the U.S. House of Representatives, right? They probably needed it during the shutdown, but we were the ones supporting that.
Now, if you think about the first example I gave you on the 800,000 endpoints, you go to any manufacturing client, you go to a utility, where are the most vulnerable pieces of their ne2rk? The endpoints, right? Our ability to take that and translate that into an environment like that allows us to really, really make a difference and add value to our clients. We're starting to do it with partners. Last but not the least, enterprise platforms. You've probably heard Ted say this. You've probably heard it from other people, but we believe that the fastest channel to get ROI from AI or even agentic AI today is through enterprise platforms. Now, through our acquisitions, what have we done? We've built a portfolio that, with the recent Salesforce announcement, which gets us pretty squarely into the front of the house with CRM, we've got the front.
We've got the middle with supply chain and manufacturing. We've got the back with Workday, HCM, and financials. We've got ServiceNow, which is a true orchestration layer. What this allows us to do now is to talk to clients about really thinking about agentic AI in the context of their entire enterprise platform architecture, front to back. That's what we're doing. We're trying to deploy these. We're ahead of the curve in thinking about how do you think about agentic architectures front to back. Hopefully, this gives you a sense for the things that we're talking about in these solution areas are not just concepts. We're actually living it day to day with our clients, and you've hopefully seen that through the examples that I just gave you. Okay, there you go. Won't spend a ton of time on this page.
Heather and Marshall are going to talk about this ad nauseam. A couple of things, again, that I want to highlight. I talked about pattern recognition, and I talked about the need for understanding repeatable patterns, right? That is true for anything, whether it's platforms, whether it's AI. One of the things I want to point out here is our AI Innovation Center. What we're doing with that is we're creating a centralized hub where we can capture the knowledge from every engagement, every use case, every piece of client work that we do to make it reusable across both our delivery base and our Salesforce. They can actually understand what we're doing across the whole thing. The other one I'd pick out here is Agent, which is really a framework for responsible AI deployment. The rest of it, you'll hear from Marshall and Heather.
The third leg of the stool. Now, if you go back to the page I highlighted earlier, the first part of the stool was solutions. The second was accelerators. You saw at the bottom, there were partnerships. That's the third leg of the stool for us. Now, again, I bet you've seen many presentations from many companies which show you a ton of logos of partners. How are we different and how do we think about partnerships differently, right? Our partnerships, many partnerships that I've seen over the time are very opportunistic. You walk into a client, the client says, "Hey, I need to do a deployment of product X." You go talk to the product company and you start the deployment. That's one way of doing it. The approach we've taken is fairly purposeful and fairly strategic.
It's what we call a 360 approach to these partnerships. What do I mean by that? In our partnerships, we're not just focused on identifying and opportunistically fulfilling a client need. We are actually working with these partners, using their technologies in-house, building on them, co-developing with them. In some cases, again, I hearken back to the Salesforce announcement or what we're doing with Workday. We've deployed Workday. We use Salesforce. We're building agents on those. We're deploying them in our environment. We're doing the same with all of these areas, right? That's the difference. It's that 360 approach that allows us to do 2 things, right? Deeper relationships with our partners, right? Because we're helping them advance in the marketplace using their products, and then we go together to solve client problems.
I do want to point out one last thing on this page, which is we talk about all these scale partners, the hyperscalers, the enterprise platforms, the security partnerships. Like, in this day and age of AI, the ecosystem of solutions is exploding. Like if you go and look at any sort of reputed source on research, CB Insights or whatever, there are AI companies or solution providers for every problem you can imagine in most industries. These are specialized companies that are very, very good at solving specific things. If you truly want to be a partner that can accelerate value, the ability to scan the environment, identify these, and start to think about how do you deploy them is critical. That can only be done, A, if you understand the industry, and B, if you understand the landscape.
We are constantly doing that through our solutions team, and Heather and Marshall will talk about it. That is what led us to this company called Amisa, which is a very unique company that deploys agents in manufacturing and operational environments. Pretty hard engineering problem to crack. We are actually doing that with a client. Partnerships are not just about opportunity. They are truly deep enablers of our strategy. I have said a lot about our partnerships. I am going to stop, and I am going to let you hear it from the horse's mouth from one of our partners. I will play a short video right now.
Good afternoon. I am Julien Debord. I lead our energy and utility vertical at Databricks. Reach into the C-suite executives, into the line of business or with the subject matter experts is really where we are jointly one plus one equals 3.
We have the same approach to customers. First, you want to remain extremely up to date on the latest technologies. We look for the long-term benefits for our customer, not necessarily the short-term landing a contract and moving on. We are here to make them leaders in their space. That is where our partnership is extremely strong. We understand their strategic pillars and direction. That is where really you can help us fine-tune the solutions and together bring customers some solution, resolving some use cases that they thought were not possible before. Really, you are our spokesperson when a customer asks for an unbiased vision of what is the best data and platform to run their use case on. ASGN has the talent, competency, and training on Databricks to provide that unbiased, educated information to our customers. We are developing a solution accelerator together.
Company moved from being reactive to predict that something is going to happen, which is great. That is where our partnership comes in, helping them implement all these steps to get to automation. Despite, AI is not a magic wand. You need professional services to do that. Some customers will have their own internal teams. Most customers are going to be asking for some support, and that is where the professional services that you guys offer come to play in order to help them implement, deploy, first plan what needs to happen, and then deploy and implement at scale.
As that video was playing, I was just thinking that the French accent sounds so much better than the Indian accent. It would be so much cooler if I had that. You heard from him. It is great that we can do that.
Is it actually manifesting in results for us in real life, right, as we go there? We are seeing a 10-15%—call it whatever, double-digit growth in our partner attached sales and revenue, whether it is ServiceNow, whether it is TopBloc, and all the new partners that we are adding. We are building assets. We are putting them in their company stores, right? The thought I want to leave you here with is you are going to hear about partnerships everywhere. I think what makes us different is the unique way in which we are approaching this very purposefully, very thoughtfully, with the right set of investments, with the right partners for each one of those solution areas in a very 360 manner as we go through what we are doing. As I close out, I want to anchor us to a few things on this page, right?
AI is here to stay. We all know that. Whether it's the year of AI or the decade of AI is up for questioning. We can talk about the evolution of all of that. It is here to stay. As I said at the very beginning, we think it's a massive tailwind for us. We are not looking at it defensively. We are ready to play offense with AI because we are building ourselves up for it. We are gearing up for it. We have thought through the purposeful set of solutions that we want to be in, where we believe we have a right to win with our positioning, with our clients, with our partnerships. We are investing in the right things to be able to go solve our clients' problems with our own IP and our own assets, right?
The last thought for me on this page is, as you think about this marketplace, the marketplace has a lot of scaled players and has a lot of upstarts or startups or whatever term you want to use. They're all competing. I think we're in a very unique place where we have the scale, but we also have the velocity and the agility of a startup. Think about us as a scaled player with the velocity of a startup. That's who we are. With that, I'm going to now invite Heather, who's our head of AI, and Marshall, who's our technology and innovation officer, to talk about AI. Thank you. All right.
Thank you, Shiv. That's a great segue into our conversation about data and AI today. Hello, everyone. I'm Heather McKinnon Miller, our head of AI. I spent over a decade as an engineer.
I came from 7 years in data and AI at Microsoft. I also led data science and machine learning for UPS.
Good morning. I'm Marshall Thames. I am the Senior Vice President of Technology and Innovation at the federal arm. I ran the defense and intelligence business unit for a number of years before we started this technology innovation group earlier this year. If I could, I just want to point out we're wearing very cool new EverForth lapel pins if you missed that.
Great. To Shiv's point, if you come out with anything from our conversation today, it's that AI is not a myth. It's a reality. We see it in every industry, every domain, every role. ASGN, now EverForth, is really well poised to take advantage of this opportunity.
Really starting a couple of points per Shiv's original 6-pillar strategy, we are our own AI customer. ASGN has been building AI applications internally for a long time for everything from selling to developing. That means we can take the lessons learned and the best practices, package those up into solutions that we're calling accelerators, and offer those to our customers. Second, we go to market industry first. That's really important because we aren't out here just building flashy demos. We work with our experts to see what are the real industry problems that need to be solved, turning those into pre-built solutions, and then offering those up to others. I'll give you a quick example. In the utility industry, when you go out and update a natural gas line, you create a work order.
People have to come back into the office, take that manual work, turn it into a digital asset, and then update their GIS systems. Every utility company has thousands, if not hundreds of thousands of these in backlog, right? It's a perfect opportunity for AI. We've built a pre-built solution for that, an accelerator. Finally, we work through our partnerships to help us scale the impact of these accelerators, bringing in their best tech talent and marrying that with our best tech talent. We are not just building AI. We're creating AI as a growth engine. Moving into the state of AI adoption, I don't know if any of you have seen the report from Gartner this year that estimated only 6% of companies have AI and adoption in production. That's not a great stat for the industry, but it's a great stat for us, right?
That shows how much massive opportunity there is out there. To Shiv's point, limited AI talent pool, number one problem, high implementation costs, not sure which use cases are the right use cases. That's all being worked out, right? Whether it's the market has figured out how to regulate cost. We've figured out what commodity use cases make sense for Gen AI and which ones make sense for traditional machine learning. That's where we come in, right? We're starting to see companies not ask us for 5 or 10 use cases. They're asking us for hundreds and thousands. One customer came and asked for 1,800 use cases. How can you help us build 1,800 use cases? The problem's not coming from how do we build one use case. It's how do we build thousands of use cases. Now it's not around the AI application itself.
It's around the infrastructure, the data, the cybersecurity, the internal readiness of your employees, figuring out how we can get to 1,800 use cases. Now we're not only looking at the opportunity of getting beyond that 6%, but how do we grow to 100% times thousands, right? Well poised to exceed that 14% growth. You'll see some numbers in a few slides. Getting into really what customers are asking us for, there are really 2 things. To Shiv's point, talent, right? AI technical talent is hard to come by. We have a deep bench of technical talent. We also have been doing staffing for tech talent since the mid-1990s. If we don't have it in-house, we can find it really quickly. We are also upskilling technically our developers. We have over 1,500 developers in our Mexico delivery center.
By this time next year, our AI talent pool will be 10x through that internal training program. For our Fortune 500 companies, the number one thing they ask us for to scale is we need a centralized place to get insights on and govern, manage costs for all of this AI sprawl. To Shiv's point, there are hundreds of tools, and some customers are using at least 50. How do you centralize all that and then get a way to manage it all even from a project management perspective, right? In reaction to that, I do not know if anyone saw the press release yesterday, but we have built our own IP called the AI Factory. It is really important because it sets the stage from taking an AI idea from the very beginning all the way through building, putting it into production, and then governing it.
Most customers do not want to build AI and then babysit their AI. They want someone else to do that, right? Once you build that baseline and what we're calling an AI watchtower, that can become a really flexible pricing model for customers, for customers who want to offload all of their AI operations or just governance as a service, for example. That strategy isn't just theory, right? This is traction. You'll see it in a couple of these numbers: 86% year-over-year pipeline growth for data and AI services and 30% year-over-year realized revenue growth. I'll hand it off to Marshall to talk about the federal space.
I think it's worth noting, too, that the AI Factory is a joint effort between the commercial and the federal arm. We built that. We envisioned it together. We built that together. We've had a lot of success with that.
There's a lot of growth, obviously, in the federal space around AI. We're seeing the priorities of national security and productivity. On the national security side, obviously, AI is already mission essential in defense and intelligence, border security, law enforcement, places like that. In those areas, the government doesn't just need some AI. They need the best AI. They need literally the best AI in the world. AI is the new arms race in that piece. The government is investing heavily to maintain their lead. There's no doubt about that. There's also this great push for productivity. We're seeing that headcounts are being reduced across the government. Resources are being shifted into national security priorities. That's leaving agencies to do more with less through AI. That's their plan.
We're working with the commercial team to find expertise and solutions from the commercial team that we can leverage into the federal space in this area. This looks a lot like commercial when you're pursuing productivity. We work very closely together there. The government has very unique challenges, right? AI talent is even harder to find when you have to have clearances. Data integration is even harder when you think about the huge numbers of legacy systems that are out there spread across the government. The scrutiny around governance, risk, and compliance is intense. The government simply can't afford to get AI wrong. That's where we come in. We already have the cleared talent, mission expertise, and proven ability to deliver AI at scale around the world. Across the business, we're seeing 5 key drivers for AI.
We're building differentiated solutions in each of these areas. Where it makes sense, we're tailoring those solutions to specific missions and industries. Our goal is to meet customers where they are and to show up with proven solutions and accelerators that maximize ROI and speed the value. As a great example, the commercial team is doing really, really cool stuff. They're building AI tools that use deep reinforcement learning to help oil and gas companies optimize the refinery process. It's actually using AI to optimize the running of a refinery. That's decision optimization tailored for the oil and gas space. There's enormous demand in all of these areas. We're investing to lead with innovative solutions where we can show up with ready-to-go solutions. Where does that innovation come from? As Shiv mentioned earlier, a lot of times that comes from us being our own first customer.
When we build an internal tool, that often starts this flywheel effect, right? We have seen it a number of times where we create a tool, we solve an internal challenge, and that makes us more efficient and more competitive. That is great. A lot of times our customers are facing the same challenges. The solutions that we create start this flywheel effect where we build it internally, we prove that it works, and we take it out to our customers, and they see how it can affect their business as well. I will give you 2 great examples. Our federal team built a couple of years ago, we built an AI tool called Atlas. For anybody tracking it, we actually had an AI tool called Atlas years before OpenAI did. It was an internal tool for proposals, knowledge management, recruiting, things like that.
It was never intended for customer use. When we showed it to DHS and to the Navy, they said, "Wow, we really have the same challenges that you do." Atlas quickly became a sales differentiator and a delivery accelerator. It helped us win that business and deliver that business faster. Similar story on the commercial side. They built an AI tool that helps organize proposal content and streamline the proposal process. When they went out and talked to customers, some of them said, "Yeah, that's great. We can use that tool." Other customers said, "We have the exact opposite process. We need a tool that's going to help us generate templated documents like requests for proposals." They were able to adapt the initial tool into a document generation tool and then eventually into a tool that can receive proposals, score them, and rank them.
One internal innovation became 3 3 market-ready solutions. That's the flywheel in action. Internal innovation that scales to client value. Heather has even more examples. Heather
needs to go back to that last slide. Okay. Great. We talked a lot about investment in internal innovation and turning that into client outcomes. I want to give you an example of how we made that real this year. We built an internal tool called a Rapid Discovery Tool, not a cool name, but it's a really cool use. It's 11 tools in one. What it does is enable our developers when they get into a consulting engagement to get a lay of the land. It's AI-enabled. It allows you to look at how things are related, create architecture diagrams, figure out what's useful, what's not, document code.
Seems kind of boring, but we brought it to 2 customers. These first 2 points are for a manufacturing customer. We brought this into their first phase of their application development project. These are their numbers they shared. So 25% acceleration in their discovery phase, which is one of 5 or 7, depending on who you ask on the software development lifecycle. Then a 40% improvement in requirements accuracy. That means they were not only able to do it faster, but better. My favorite stat is this third one. This was for a hospitality company, very similar project. What would normally take one to 2 months, and we verified this because we are our engineers and they are doing the work, we brought it down to 2 days, right? That is pretty powerful because it is not just productivity metrics.
It's lower total cost of ownership, faster time to market, right? Those are the real metrics companies are looking at. Shiv mentioned that before, the power of partnerships, the importance of partnerships, we're really strategic about who we choose to work with. We want to start with the platforms because our most immediate value in the AI space is the AI that's embedded into our enterprise platforms. Salesforce, ServiceNow, Workday all have their own AI. We always want to start where the data is. That's true of Databricks. It's true if your data is in AWS. The difficulty sometimes is the customization and the integration of those tools. We work through alliance programs. We have a co-sell motion. We are in forums with them. We've put our solutions, our accelerators into their marketplaces.
It is really starting this flywheel of co-selling and winning with us. Getting into pure plays, I'll just highlight Databricks and one of the stats here. Again, a lot of customers have data in Databricks, and they want to leverage those tools. Most of our customers want to start bottom up and get the AI ready. That is exactly what these projects did. A Fortune 500 food distributor realized 40% savings in operational costs. That is important because even before they started layering on AI, they were able to save costs just by putting data where it really belongs to get ready for AI. Finally, a lot of customers, especially our Fortune 500, are way up the maturity curve in AI. It is not enough to just build a couple of chatbots, right? We partnered with a company called Amisa this year.
They have a platform that enables multi-agent orchestration for simulation and optimization. This is old deep reinforcement learning. I hate to say old because it's really cutting-edge tech, but it came out. People weren't ready for it. It came back. This is machine learning. When we start to see the limitations and maybe the lack of adoption in generative AI, we are seeing the pendulum swing back to traditional ML. I'll give you an example of how Amisa has been used. There's a CPG company that used it for production scheduling. They were able to realize a 21% profit margin for those products over their existing optimization method. Lots of examples of that. We've got companies looking at the last-mile supply chain, companies looking at improving yield in continuous batch use cases. Lots of opportunity there.
It's a differentiator for us, for sure. We have 16 projects right now in the queue for 2026. These are big needle-moving projects worth usually $1 million in savings or more a year for these companies. Finally, I chose a case study that I think really highlights the complexities of AI. Shiv, I always love that you stole half my thunder. I'm going to give the other half the thunder now. This is the same case study that Shiv was talking about. This is a big private professional services company. They have a problem where third-party update standards. Every time they update the standards, internally, you have to update tens of thousands of documents, web pages, applications. It takes an army of people to do that manually.
By the time they get it done, which is about 6 months, another set of standards has come about, right? Not only is that a lot of investment in time and resources, but it's a risk, right? If you're a consultant doing an audit on 4-month-old standards, that could be risky. They said, "Hey, this is right for agentic optimization, making this workflow agentic." They tried it on their own. They got pretty far. This is where most customers stop because they say, "Is this the best way to do it? Is it the only way to do it? Should we have somebody else do this? What's going to happen when we roll this out to hundreds of concurrent users? Who wants to babysit this? Us?
How do we even make sure that when it's put in production, it's safe, secure, responsible? They reached out to us. We looked at the full lifecycle of this AI application and really realized that their limitations were on the back end, right? They'd done a pretty good job of getting it where they wanted to. We found ways to make it more accurate. It was this whole last mile, right? Observability, managed support, which is something we'll be doing. That team did not have a managed support team. They were able to offload that to us. When you start to look at the whole ecosystem, it's not just the AI application. It's all the data, all the infrastructure, all the cybersecurity, all of the interfacing of a lot of these tools with internal systems.
You are able to take 6 months of manual chaos and reduce that down to 6 weeks or less. It's looking like it'll be about 4 and a half of controlled intelligence.
Okay. Now I get to talk about Maven. Very excited to talk about Maven. Maven is a landmark case study in AI for national security. In 2017, the DOD had more drone video footage than human analysts would ever be able to review. They asked a really smart question, "Could AI help us with this?" Maven started as an experiment to see if AI could add value to DOD mission sets. It definitely worked. It's gone on to change the nature of military intelligence and a lot of military operations ever since. ECS has been the prime on Maven since inception. We started with drone footage.
Since then, we've expanded to dozens of data types and sensors across all classification levels. Our data and AI practice grew dramatically under Maven. We've been able to identify key lessons learned that we apply to all of our data and AI engagements. Here is a deeper dive into Maven. Great video.
Every second, sensors across land, sea, air, space, and cyberspace generate a deluge of data. No team of humans could ever keep up. Artificial intelligence cuts through the noise by finding the threats, the signals, and the insights that matter. From rival nation-states to individual threat actors, AI enables us to see more, act faster, and protect what matters most. That is why the DOD launched Project Maven in 2017, choosing us as the prime AI interoperability integrator.
This R&D project proved that by using AI, it could process massive amounts of raw data to alert analysts and operators of important detections. Today, the DOD NGA Maven program is a vital part of our national security infrastructure and the DOD's flagship geospatial intelligence AI program. Since Maven's launch, we have delivered thousands of AI models and deployed hundreds of them into real-world applications. Massive amounts of data are collected and processed across every security level. Insights flow seamlessly into multiple platforms, turning hours of analysis into minutes for the armed forces. We push further, deploying AI engineers to the field and working alongside military units to ensure models deliver real value. Lessons learned at the edge come back, shaping the next generation of solutions.
NGA Maven is a premier AI program fueled by partnerships with academia and nearly 100 leading commercial AI companies competing to bring the best of innovation to our government. Together, we transform data into power, keeping our nation ahead of its adversaries today and tomorrow. Technology, engineering, expertise.
Tough act to follow, here we go. Our AI strategy is based on 4 pillars. We are capitalizing on the explosive growth in AI. The opportunities are real. They're happening every day. We're injecting AI into our own operations. That starts the flywheel effect that I talked about, where we build something internally and we find that there are huge market opportunities for that as well. Third, we are not building generic AI. We're building AI that's specifically tailored to meet the needs of industry partners.
Finally, we are scaling the impact of our AI through accelerators, continuous improvement, and strategic alliances. Every solution we build becomes an asset for the next customer. Every partnership extends our reach and our relevance. We are building solutions that work, partnerships that matter. I like to say we're creating real value for customers who are counting on AI to meet their goals. With that, I'd like to invite our CIO, Steve Hittle, to come up and present. Thank you very much.
Good morning, everybody. Before we go, I'd be remiss if I didn't draw back to what you guys just saw from Heather and Marshall. That really highlights the why ASGN. ASGN is building and bringing AI to the marketplace, not just the federal marketplace, not just the commercial marketplace, but to the marketplace jointly built. Heather and Marshall, thank you so much.
As introduced, I'm Steve Hittle, Chief Information Officer for the federal organization. I come to you with 32 years of experience with military, DOD, IT, and cybersecurity experiences. I work with companies like Nindustries, NCI, Northrop Grumman. I've been with ASGN as an executive officer from a CIO perspective and a chief security officer for the better part of 11 years now. My intent today is to kind of walk you through what does ASGN deliver from a cybersecurity perspective. What is our vision? How do we deploy it? How are we different? We'll get into that. All right. Messaging for today, we really want to stay focused on where ASGN is uniquely positioned to capitalize on massive tailwinds in the cybersecurity marketplace. This ties into things: supply chain risk management. You have ransomware.
There are certain things that are tying this massive tailwinds that ASGN is uniquely positioned for. Where we focus, we deliver a comprehensive custom solution to every one of our customers based off of a solution set that is uniquely designed by our cybersecurity practitioners. All right. We leverage, and you heard from Shiv, you've heard from Marshall, you've heard from Heather, is that we don't just say. We actually build. We drink our own champagne. We deploy, build our own AI tools, but we also enable and we buy and we partner with the best in the business. All right. Last but not least, when I say partner with the best in the business, we scale and we grow through strategic partnerships. I'll show you a little later in one of the slides kind of the unique value of that strategic partnership.
Again, these are just messages I want to walk you through today as we get moving forward. With nearly double-digit CAGR for the next 10 years or taking us through the end of the decade, one of the areas where ASGN is uniquely set aside is that we have over 1,000 cybersecurity professionals. These folks have over 1,400 individualized certs unique to the cybersecurity landscape. What's even more staggering is nearly 50% of those folks are cleared at least to the secret level. Why is that? You ask, "Why? Why do we care about that?" We operate in unique areas of healthcare, pharmaceuticals, defense, financial, and hospitality. These are all highly regulated organizations that can leverage that unique cybersecurity practice, but also those clearances. All right.
With that, we also, talking back to where Heather and Marshall, you've heard from Shiv, you've heard from Ted, is our expertise, the talent. You hear the word talent and expertise. That is our foundation of why are we different from an ASGN perspective. What do we do from a cybersecurity perspective is that it's in our expertise. I'll walk you through how we couple what I call people, process, and technology. This page kind of highlights where we're at from the people, where there's expertise in that. Throughout the rest of the presentation, we'll talk more about kind of the tech and then some of the process side of the house. All right. We're looking at what are the mega trends of cybersecurity. What I say, this massive tailwinds. You know what's driving us there.
Throughout, you're no harder than picking up your phone, looking at the newswire, right? You can see Microsoft SharePoint exploits. You can see SAP Net exploits. You can see CrowdStrike exploits. All those almost daily you look and you see a new cybersecurity threat. All right. Those mega driving trends, you take ransomware. That is the number one largest cost to organizations right now in cybersecurity. In the calendar year of 2025, ASGN has foiled over 200 ransomware attacks for our ASGN customers. If you take into consideration over the last 5 years, the average cost of ransomware is up 575%. It went from $760,000 per incident to $5.1 million. Quick math, back of the napkin math, ASGN cybersecurity has saved our customers more than $1 billion through October of 2025. All right. Say, "Okay, how does that get in there?" One of the other mega drivers.
We've got cybersecurity phishing, phishing emails. I can guarantee you right now, somebody in here that's on your laptop has got a phishing email within the last 20 minutes. 3.4 billion phishing emails circulate daily. All right. You think about it, one click. In any organization, any customer you support, one click of that phishing email, they're in. Now that's either ransomware, they're deploying payload, they're doing things that are going to disrupt your business. That's where ASGN is unique in the packaging that we've been able to take from our defense and our federal practice and start to apply that to commercial segments. Also moving through that is supply chain and risk management.
As we continue to improve and we protect our customers at that actual infrastructure side and the endpoint that Ted and Shiv talked about, bad actors are moving down the line. All right. We can't get into your customer, but now we're going to hit supply chain. We have uniquely designed offerings around going down supply chain risk management, pulling in those unique partnerships to better fortify all the ASGN customer base. Last but not least is you've got governance, risk, and compliance. I've talked about pharma, I've talked about healthcare, I've talked about the federal side. There is an expansion in the actual governance side of the house. ASGN, we've established our own governance, risk, and compliance as a service offering to stay out in front of that demand for every one of our not just federal customers, but also our commercial customers.
All right. As we work through this, we look to, and Shiv talked about it, I'll go left to right on the slide. I don't want to kind of get into too much of the geek. I've been told don't geek out with everybody. Keep it high level. I will not do that with you guys. You're looking at endpoint protection, you're looking at identity, you're looking at advanced frameworks. You heard things like zero trust, security operation centers, monitoring, governance, risk, compliance. Those are kind of the unique offerings that we provide from an ASGN perspective. One of the things that you don't really see and where we have the value and where we're taking advantage of those tailwinds is that you look at something like penetration testing. All right. ASGN has a very comprehensive penetration testing that we deploy.
The unique thing with that is that 80% of every ASGN customer that buys once through a penetration testing or one of our offerings buys more. That's sticky. That's where we grow. Our offering is in that we provide that service and then they need to consume more. We do vulnerability management. We find remediation items. We continue to grow through expanding on that comprehensive service model. Okay? We like to look at every ASGN customer as they have a unique requirement. To Shiv's point, every customer has IT, but it's not the same. Their infrastructure is slightly different. The toolsets that they run are slightly different. Everything is just a little off. The way that we approach things from an ASGN perspective is every ASGN customer gets treated like we're doing a custom fit suit. Now, it's based off of a comprehensive service catalog.
We have our base catalog of our offerings, but every customer is treated like we're doing a custom fit suit. It is unique to their specific IT and cybersecurity requirements. I like to always joke, "ASGN customers, do not buy off the rack. Everything's custom fit." This takes you back to, and Heather and Marshall did a fantastic job talking about what we've built from our own AI tools and things. I also like to look at things from a 3-pronged approach. We enable, we buy, and we build. When we come into an ASGN customer set, we're going to look first and foremost, what tools do you already have? We're not going to come in and say, "Hey, rip it out.
This is the only solution that we have for you." We're going to come in and say, "Okay, what are the toolsets that you have?" We're going to enable all of the AI and all of the machine and all of the algorithms that are already built into the systems that you have before we do anything else. We are going to assess, right, what are the procurements needed? What do we need to buy to continue to fortify the systems that you want us to protect? Once that's done, we can overlay our own unique IP with the platforms that we've built from an ASGN perspective. Again, that's where we look at kind of that 3-pronged approach. What's some of the proof points from that? We're seeing 80% faster detection across all of our client environments.
With that 80%, now you're tier one analyst. The first person that's flipping tickets that's coming in, thousands and thousands of tickets a day, we're reducing that down to 80%. Now they can focus on 20% of the real root and the problem. Another thing is 90% of our automation now has reduced that first touch with AI accelerators. We've taken 80%, 90%. Now, of that 80% that they got to look at, we've already filtered out 90% of that first touch. We're really getting to efficiency with your analyst to be able to sit down and say, "All right, I've now boiled down all of this massive amount of issue into the few things that I really need to focus on." Okay? Last but not least, accelerators.
When I spoke earlier about penetration testing, we have partnered with Horizons 3, and it's given us, from an ASGN perspective, a unique opportunity to have a 20x multiplier. For every 20 hours of penetration testing that we used to do, we do now with one human hour. That's the use and efficiency of AI and the strategic partnerships. Okay? Diving in, Shiv covered it perfectly. I'm not going to be able to prove upon what he did, but I'll give it my best shot. We look at, from an ASGN perspective, we look strategically to partner with vendors in the marketplace. Elastic, we are, and you guys heard about Partner of the Year awards for Workday and Partner of the Year awards for ServiceNow. I would be remiss if I didn't announce that we recently awarded the Elastic Professional Services Partner of the Year for 2025.
Not to one-up anybody, but we're there with you guys as well. With that said, one of the reasons why we got that Elastic Partnership of the Year award is take a look at one of our DHS customers. It was one of kind of our first example customers. We built out data and search, observability and search. We had a great model with that DHS customer. With that, and to Shiv's point, we made that repeatable. Now that same solution has been deployed across several DOD customers, but numerous. When I say numerous, I can't remember how many commercial clients we've deployed that same to. That's not a re-engineering. That is a one-for-one repeatable delivery and repeatable opportunity that we deployed. The cool point here is, from a strategic perspective, Elastic really leans on ASGN.
Fun fact, ASGN has more certified Elastic engineers than Elastic. A lot of times you hear like, "Hey, we've got to go to our vendor partner to backstop because this is a little bit too big for us." Elastic comes to ASGN when something is too big for them from a pro services perspective. That is the uniqueness. That is the strategy, the strategic value of partnering with some of these firms. What I did not cover on the slide here is really important from an investor perspective, which is sales extension. Elastic sells ASGN. They are with their sellers going to market and they are advertising ASGN from a professional services perspective. That is the value. That is where we see that value and strategy. All right? Use case. Shiv had queued up a very large DOD Army customer that we have, protecting over 800,000 endpoints.
We did a pilot with them, over 200,000 endpoints. Another area where I was told, "Don't geek out with everybody," but some of you have heard or you'll hear of quantum computing. Quantum is kind of a next generation where things are going to be going. Just on that side, data usually, as we look at supercomputers now, data or bits are done in ones and zeros. From a quantum perspective, it's qubits. Search or how it solves, it does in parallel. For simplistic sake here, you have very high-level security certs on all of your infrastructure, all of your endpoints. Everything that you have has certs. All right. We did a 200,000 endpoint deployment of a quantum readiness for our Army customer.
It yielded great returns for that customer, gave them focus areas of where they needed to look at. We were given a unique opportunity with a global hospitality leader. I can promise you everyone in this room has stayed at one of their properties. They had a simple set. They came to us with what they thought was a simple issue, simple problem. "Hey, we need a vulnerability assessment done just to make sure that our payment records, our certifications and everything around payment records for all of our guests are safe." We had a unique opportunity to lift and shift, repeat the same quantum readiness assessment for this global hospitality leader. Over the course of a one-week deployment, we uncovered 1,300 vulnerabilities for this provider. All right. I go back to, "Okay, so 1,300, what's that mean?" That's the stickiness.
That hospitality leader, within 48 hours, cut a new statement of work for ASGN to come and do all the remediation. That's the sticky. That's the value. That's taking that repeatable delivery and putting it into practice from the DOD side of the house to commercial, direct application, no re-engineering. That's the value. All right. At that point, I'll now queue up my own video and let you see where we're at.
AI is reshaping cybersecurity on the same scale the internet reshaped business. In recent months, we have seen a marked escalation in cyber incidents and vulnerability disclosures, with attackers moving faster and more frequently than ever before. Threat actors now operate at a speed that makes legacy defense obsolete, turning risk into an immediate financial, operational, and reputational threat. The assaults are relentless. That's why Fortune 1000 enterprises and government agencies turn to us.
With over 1,000 certified and clearance-ready cyber experts, we protect over 1 million endpoints and billions of dollars in assets. As malicious AI makes it easier for cyber criminals to operate, we stay ahead with advanced AI-driven defenses, zero trust accelerators, and repeatable frameworks to deliver measurable results faster. We partner with leading technology product companies to extend capabilities, speed innovation, and maximize investment. Through co-sell programs and expanded market access, we're reaching new customers across commercial and government sectors. The impact is clear: faster solutions, broader market reach, and stronger results for every customer we protect. Now and into the future. Technology, engineering, expertise.
All right. As I close my portion of today, I kind of want to bring you back, kind of level set on exactly what it is ASGN capitalizes on. We have that massive tailwind in the market.
We have a unique delivery model. We're able to bring to bear what we do from a DOD and a defense and federal perspective into the commercial marketplace. That uniquely sets ASGN apart because we are bridging that gap. Right? We are delivering trusted solutions that are customized to every one of the ASGN customers as that custom fit suit. Most importantly, we do that with a clear focus on driving growth and maximizing margin and return. I'll leave you with, in short, we adapt and we thrive. Thank you. At this point, I'll turn everything back over to Kim.
All right. You've been waiting for it, our first Q&A session. We're going to have mics. If you have a question, please raise your hand. We'll come to you.
I ask that you say your name and your company first so everyone on the webcast knows who's speaking. Okay? These are my helpers. We've got Tobey Sommer right there. We're going to get the executives up. Tobey, you have one. I would ask that you ask one question, please, so that everyone has the ability to ask questions. If we have time for follow-ups, we, of course, will take them.
All right. Tobey Sommer with Truist. I wanted to ask sort of a basic customer spend question. Are you seeing IT spending or in the areas in which you're focusing increase, or are the initiatives there supplanting spending in other areas? If so, what might those be?
Good morning, Tobey Sommer from Truist. Thanks for the question. Shiv, you want to take that one?
Tobey, great question.
We're actually seeing demand sustain or trickle up in these areas because, honestly speaking, the infrastructure that our clients have is just not ready for what they want to do with AI. Right? Whether it's cloud, whether it's modernizing their application stack, whether it's getting more prepared from a vulnerability perspective, the spend is going up, right, in those areas. Now, how are they keeping their budgets flat and trying to manage all of that stuff? I mean, that's where AI comes in to help with some of that stuff. It's not the spending going down. They're doing more with that, right? They're getting more spend in each one of those areas. We don't see that. The only places where we could see AI actually compressing work is in certain very low commoditized parts of the software development life cycle.
Good morning, Mark Marcon from Baird.
Rand, I don't know if this is the question you thought I was going to ask, but just I'm pivoting based on what Ted was saying and what Shiv's been saying. Ted, you talked about transformation. It's obvious for anybody who's followed your company for a long time that ASGN has really transformed in multiple ways. I'm wondering, can you get a little bit more granular with regards to describing the state of the organization just in terms of current headcount, in terms of permanent headcount, and then the number of consultants that you typically end up working with, and how many have been actually trained? Because you're doing so many different things now relative to what's traditional IT staffing. It sounds like there's different ways of selling, different ways of going to the market, different ways of competing.
I'm wondering if you can just be a little granular just in terms of where are we in terms of that transformation, in terms of go-to-market skill set, etc.
Thanks for the question, Mark. I believe if you—I mean, I think you can tell just by the presentation today that where we used to be known as the best-in-class staffing company, we're not that anymore. I mean, 70% of this business now approaching is higher-end consulting services. The customer is buying all these services and solutions in different ways than they did in the past. Our evolution as a business has been to kind of get to where we need to be, meet the customer where they want to be.
The last piece of this transformation is not just coming together internally as we try to work today and have over the past number of years to serve the company, but now come together in every way as one brand in the marketplace ready to serve our customer. Our model in the commercial marketplace is still predominantly bringing IT technical resources that are bespoke fit for each one of these project teams through our IT staffing delivery model. We have augmented that with our nearshore capability, which we purchased in the InterSys acquisition and have scaled over 10 times now organically and with our recent acquisitions in commercial of ServiceNow and a Workday capability. Those have, I would call, augmented our still predominantly contract delivery method in terms of how we bring our resources.
I think, Mark, in some ways, how the company looks internally has not dramatically changed in terms of how we deliver our services, save for the pieces that I mentioned. As one business now, we're much better positioned to continue to bring all these capabilities and solutions to the marketplace.
Kevin. Great. Thank you. Kevin McVeigh, UBS. Thank you for doing this very eloquent presentation and complex topics. I've always thought, as long as I've covered this sector, you're only as good as your clients, and you've got a terrific cadre of clients. As you think about the alliances, what percentage of your revenue goes to those alliances historically, and what does that become over time? What's the go-to-market motion on that? Are you co-selling? Just any thoughts on that?
Because I think it's a terrific—we cover, obviously, Accenture, and they're about 60-65% of the revenues through their alliances today. How does that go-to-market motion shift over time, just given the caliber of the alliances you have?
Sure. Yeah. I can talk to it, Kevin. Look, I think historically, we've evolved our alliance motions over the last few years, right? We're still purposefully picking the alliances that we want to be in. As I pointed out, if you look at TopBloc, for example, or ServiceNow with GlideFast, it's 100% driven off of the alliance motions there. We've got tremendous growth with AWS. We've seen tremendous growth with Databricks. I can't give you a specific percentage right now. What I can tell you is we've started tracking it, and the growth rates are in double digits, as I pointed out.
We only expect that to rise. You just saw the Salesforce announcement. It's a big push from us into the marketplace. That is sort of the first question. It's really a pretty significant percentage, but we're really tracking growth because we want to establish a true baseline that we can accurately report on over time with you. That's really the answer. On the co-selling, co-developing motions, again, I hit on it very precisely, right? I spent 15 years in the ecosystem you referenced with Accenture, right? I think what we're trying to do is really be purposeful. If you look at our own stack, we've got Workday. We've got ServiceNow. I'll allude to some of this later. We're building assets that we're using for delivery on those platforms.
That's what the clients like about us, or these partners like about us, is the ability to tout what we're doing internally when they go talk to clients. In the Salesforce partnership, you read about it. We're jointly developing agents that we can take, and they're going to deploy engineers in our environment working with us to build those. That's a co-develop motion, a co-build motion. You heard Steve talk about Elastic. There's a lot of co-sell there. There's a lot of co-sell with Databricks where we've built specific assets for energy with Databricks. We're the only guys who've done that. Give you another example of co-develop, co-sell. AWS. We're the first partner to take a lot of Infor into the cloud with AWS on their assets. That's out in their marketplace. It's 316 in that sense.
We're co-developing, co-building, deploying, and then co-selling with them. We expect this to just really accelerate for us.
I think that that kind of underpins a misconception around AI that somehow it will just automatically be delivered from big enterprise software or somewhere else into the customer environments. I think the enterprise software firms, platform firms knew this. They're not built as a service business. They're built as software businesses, right? In the Salesforce example, they can't scale. They can't deploy Ford engineers into every one of their 80% or 90% of enterprise customers. There's no way they can scale that. They're coming to us and say, "We need you to help us scale." In that way, customers expect this co-sell motion, and the enterprise software companies won't be able to really deliver enterprise AI without it.
Just one point to add on this, Kevin, and this is important, and I alluded to it. If you look at a lot of these enterprise players, and I talked about the world being fragmented between scale and upstarts, a lot of the agentic AI motions for these platforms are being driven by a lot of smaller companies because they have speed, they have agility, and they do not have the incumbent weight of the platform implementations. What makes us attractive to these partners, and we are not saying it, they are saying it, that is why the Salesforce thing is we do both. We have scale, but we can move at a real pace in terms of talent deployment and allocation.
Hi. Thank you. Maggie Nolan with William Blair. Appreciate your time today. Wanted to dig in also on the AI topic. I think you said the opportunities outweigh the risks.
I wanted to break it into 2 buckets where there's kind of the near-term opportunity that you outlined of modernizing legacy infrastructure and data preparedness, and then there's that spend moving into the application layer later on. Do you think that what you're doing—can you just talk about how robust your practice is in the first bucket, how that can impact your growth rate in the near term here? And then do you expect a step function in growth when that spend truly does move into the application?
Yeah. Maybe that's a good one for Heather, and Marshall can chip in.
Sure. If I understand the question correctly, you're looking at the robustness of our practice for all the things around AI first before you get an AI application. Yeah. It's really interesting because one of—I'll just give you an example as part of the answer.
We have a lot of customers who want to do mainframe modernization, right? On top of those mainframes, they want to build some AI applications into that, but they can't until they modernize. What we've done is embed AI into the process of mainframe modernization, right? It's not typically one without the other. There are a lot of ways we're embedding AI into how we deliver data migrations, how we deliver BI migrations, how we manage our internal projects. I think it's difficult to say there's one without the other. What we're seeing, though, is once customers get AI-ready data, and usually it's a subset of data that's specific to a domain or role, they have hundreds of AI applications ready. For generative AI, we've broken those down into 5 or 6 patterns.
We'll typically build a pattern for a customer first and then find out where we can copy-paste that quickly throughout the organization.
Highly regulated industries like yours, for example, I mean, data governance, huge issue to really get into large at-scale promise around AI, right? I think that this is probably, should have the best way to say, the spade work, right, that needs to go on until there's really good enterprise spending on the application of embedding AI across the enterprise in those cases.
Yeah. Maggie, just I want to reiterate what Ted said again, right? We believe that for our clients, the near-term fastest channel for ROI from AI initiatives is tapping into the native capabilities of enterprise platforms. As a result, that's what the power of these partnerships is for us, right? Modernization of legacy begins.
In many cases, if it's custom-built, you may want to move it custom into the cloud, but many oftentimes you're moving into an enterprise platform. That's where you're embedding your core workflows, your core process logic, and that's where AI impacts it the most. That is the near-term path. That modernization is going to pay us dividends, not just because we're enabling them to modernize with the platform, but our knowledge of the platform allows us to accelerate their deployment and value from AI. That is where we're building our practices.
Great. We're going to take our first break now. Thank you, everyone. Thank you for your questions. I am looking at the clock, 10:35. We're going to give you 5 minutes, so please have something to eat or drink, use the restroom, and please come back. We'll see you soon. Thank you. See, you came back.
You clearly loved the first half of our presentation. We're going to kick it off with Mr. Iyer, our President, in one moment. He'll join us up on stage, and we'll go through the second half. I hope you enjoyed as much as you did the first.
That we get you to lunch on time and everything else that you need to do. It's hard to come back after quantum readiness and Q&A and talk about more stuff around what we're doing, but I'm going to try to bring the energy back up over the next 15 minutes. If you stay with me over the next 15 minutes, what I want to do here is, Mark, this is kind of in line of your question, right? All this market stuff sounds great. The opportunity is great. You're doing good stuff.
How are you actually setting yourself up to drive organic growth in the business, right? We are well on our way, as we said, to become a digital engineering firm. We believe we are doing all the right work. We talked about the fact that we are in the right markets. We are building the right IP. What I will talk about a little bit more today also is some of the things we are doing about our go-to-market strategy, our delivery. How do we drive innovation? How does that flywheel actually work, which gives us the confidence that we can drive organic growth in the business? Again, always have to reorient us back to strategy next wave. We started with the markets that we are playing in. We talked about how we can win in those markets and differentiate ourselves. Now I am going to talk about how we are getting ourselves organized.
What are some of the things that are driving our transformation to get us ready internally, structurally, to take advantage of the market opportunity? How are we gearing up? Look, this is an important page, and I want to talk about each element of this page pretty quickly. Look, we would be nowhere as a company if we can't deliver on the commitments we make with quality. It all starts with living up to what you can commit, especially as we move up the curve into higher complexity areas, right? If you think about that, our services business, technology services consulting business, was built both organically and through acquisitions, right? You're going to hear from Chris Skinner soon, but we had GlideFast. All these organizations came in with ways they deliver stuff to our clients, right? We talked about EverForth unifying these things.
One of the first things we're doing is thinking about how do we create a one consistent way of delivering things as one ASGN or one EverForth going forward. I'll give you a very good example of that. In each one of those businesses with application platforms, we do application managed services. Implementation done. How do we support? Most often, we used to do it through a combination of a tool that each one of those businesses had or our clients' tools. Now what we're doing is, again, partnership. We're going to use ServiceNow to build our own platform for managed services, which we will consistently use across these businesses. That allows us to truly build the KPIs, the dashboards, the methodologies that we want for delivery, and we're already underway on that process. That's an example of how we're harmonizing delivery.
The second thing, we talked a lot about AI. We're not going to go further if our people can't use AI to both solve problems and deliver. We started out with something called AI University on the federal side of the house, where we are upskilling every person on AI tools. If you're a developer, what's the right choice? Are you going to use cloud? Are you going to use Replit? Are you going to use something else? We're going to use that to upskill the entire organization, both on the commercial side and the federal side, both from a selling perspective and a delivery perspective. AI First Enterprise. We talked about it. With each one of these platforms, we're starting to think about where can we use agents to do that. With Salesforce, we're already doing work on the recruiting side of the house.
We're starting to think about Salesforce enablement. You heard about RFP generation. Third thing, we also want to drive productivity through the use of platforms. You will hear Marie talk about this a little bit more. We're starting to think about creating how do we create operating leverage within our business, changing the way we do work internally, right? You hear some of that stuff from Marie as well. We're focused on that through both platform implementations and agentic AI implementations. The last thing, we've talked about this ad nauseam through things like the AI Innovation Center, through things like our COEs. We're starting to drive greater pattern recognition in the work that we do. That's also enabled by our solutions leadership team. For each one of those solution areas, we have leaders.
The job of those leaders, and these are pretty seasoned people like Heather, who have come in from very accomplished places, and their job is to look at the body of work we're doing and think about repeatability, think about asset build, think about all of the things that go into making the ability to deliver consistent quality with repeatability for our clients. Ted talked about this. That part of it was, what are we doing? This is how do we then deliver? Look, I firmly believe, and we firmly believe that our flexible lean bench model is a source of competitive advantage in a world where technology is changing very, very rapidly. A bench model cannot sustain that pace of change in its entirety. We also have to make sure that there's client context and continuity embedded in everything that we do.
What we're doing is we're strengthening our internal delivery capabilities with technical talent. More people who are solution architects who can deliver complex work. I'll talk about our industry structure a little bit soon. That also supports this model. We're not standing still. Ted talked about 1,500 people in Mexico. We've got 1,500 engineers in Mexico. What we're doing is for each one of those solution areas, we're constantly evaluating what is the right delivery mix. Where do we use Mexico? Where do we use the lean bench? Where do we use internal resources? That's a function of both complexity, relationship, market dynamics. We are expanding our India footprint, and we're going to absolutely accelerate the expansion of an India footprint because there's a competitive dynamic there in some of these solution areas for us to be competitive in how we deliver work.
When you layer these things together and you start to now put assets on top of this with solution leaders who understand the dynamics of each of those solution areas and how to deliver them, we've got a model that can really deliver quality and complexity for our clients. This is a very important page. I talked a lot about assets and accelerators and innovation. Ted talked about the account portfolio and the breadth of the account portfolio we have. I can't emphasize enough what I call the power of this model. I'll give you a stat. Every day, our Salesforce touches clients 5,000 times, 5,000 times. You can argue if it's a great stat or not. I don't know. I haven't benchmarked it. That happens at all levels of our clients' organizations, from the very top to the most granular level.
There's a body of intelligence that we get on our clients' knowledge, our challenges, their issues. That reaches our capability and innovation teams around acceleration, client needs, which we build things, right? I use the Oura ring a lot, and it tells me what my heart age is using something called pulse wave velocity, which is what is the rate at which an electric signal gets from your ring to your heart and back. We have an incredible pulse wave velocity as an organization to get data from the edge to our capability teams. Now, you could flip that around and say, how do you manage all of this? How do you prioritize it? Again, the structure we've built with our solution leaders and the processes we have allow us to filter this information, prioritize the areas that have the highest repeatability and the highest return for our clients.
That is where we go build assets. Think about it. 5,000 touch points, information every single day. We have solution leaders who understand how to distill that, build the right sets of things to take to our clients. This is really powerful. This is one of the greatest strengths of this organization. This is the ability to get data from the edge, react to it, and respond. As Kevin and I were mentioning, this is why some of our partners like us, because we do have the scale of one of the bigger players and the velocity of a startup because of this very reason. All that is great, but we still need leaders in the field managing some of our most strategic relationships. What we have done is we are going through a model of, as Ted said, optimizing our go-to-market model around larger strategic accounts.
We're deploying some of our most senior leaders to manage those relationships. We talked about integrating from a brand perspective. Now, if you think about that from a go-to-market perspective, these leaders are going to funnel and channel everything that the organization does into those strategic accounts. That's something we're investing in with very senior leadership. I already talked about some of our capability leaders here who then bring the capability technical side of the house. We also have an industry structure with industry leaders who are on top of what we're doing with industry. They can understand pattern recognition along with pattern recognition on the capability side. Frankly, this is the proof point, right? I can talk to you ad nauseam about the structures and the things we're doing, but the proof point is right here. Kevin, you alluded to this.
It's the power of the portfolio, right? 2 of the top 5 commercial banks, top hyperscalers, 2 of the top 3 U.S. healthcare payers, leading sportswear and apparel retailers. We serve 40% of the Fortune 1000 with deep trusted relationships. Now, as we're elevating the leadership focus on those accounts and bringing the power of everything we do as an organization, there's just massive headroom for us to grow because we were playing in certain amounts of the spend within these accounts. We were playing in certain silos. We've got a much broader playing field within these accounts now. We can talk at length over lunch, and I can give you specifics on our account segmentation, the leadership structures, and everything else, but I know we're on a timeline. I'm going to try to sort of summarize what we're doing here, right?
I truly believe that we're well on our way. Again, if you're in New York, you have to talk about Peloton, right? And I'm a Peloton rider. If you've done a power zone ride, we're not in zone one. We're in zone 3 or 4. I think we're fast getting towards zone 5, 6, and 7 in how we're moving up the path. I talked about high growth markets and the IP that we're investing in. I talked a little bit about some of the internal underpinnings of our go-to-market strategy and how we're transforming ourselves. When you put these 3 pieces and everything you heard together, we feel really, really comfortable with the underpinnings of driving organic growth. That's what I want to leave you with.
We are setting ourselves up, again, at the risk of repeating myself, to drive organic growth by, I truly believe, being a scaled player with the velocity of a startup. With that, I'm going to invite Ted over again to talk about inorganic growth. Thank you.
There's a lot about organic growth here over the first couple of hours of our discussion. At the end of the day, we're an organic growth company. Along the way, strategic M&A is about enhancing that, meeting certain customer needs at scale that we can't position for organically and be where the customer needs us to be today. We're going to talk about how do we leverage this reputation we have as an acquirer of choice. We've got a strong track record. There's no doubt about it.
I mean, this company basically was built through M&A, even though the units are organic growers in nature. It has allowed us to have a track record that we can showcase as we pursue our inorganic growths. We've got great examples here over the last 2 years in cybersecurity and ServiceNow and Workday, where we've been able to enter markets at scale that we haven't been able to do organically, or it would take too long to do organically. We've demonstrated the success of that. The performance of those units and how they fit into our total business is undeniable. We have a reputation both with our clients and with sellers in the marketplace where businesses are saying, "Look, I see what you're doing. I'd love to be there with you. I'm not interested in flipping my badge to one of the big traditional consulting firms.
I'd rather be a foundational piece of your solution capability in my particular area. Culture differentiation is real important, making sure that we're aligned in culture in terms of we have an entrepreneurial spirit in this business. There's no doubt about it. Can we collaborate together? Because as businesses like TopBloc come into ASGN, they bring great accounts, great revenues, and EBITDA, and they have to hit their own numbers. This is all about what can we do together? How does one plus one equal 3, 4, and 5? Commitments to customers around the solution capability. I would say also as well to the technology partner is critical. How do acquired businesses come in and really execute and learn scale from what we do? How do they serve this much larger client base?
How do they expand and play off of various unique situations that we have to make their business bigger in an accelerated way? As we think about inorganic growth, we'd all start with having the right strategic filter. Constantly, we're every day, to Shiv's point, sitting with our customers in the room, looking at their IT roadmaps. That really defines the solution capabilities that we need to be able to bring to bear to meet their needs. Most of those we can position for organically. In certain cases, as I mentioned earlier, we have to be there in the moment at scale with a really strong defined technology partnership with a particular software provider and with the past quals that come with these acquisitions. It kind of immediately differentiates ourself.
I've got a zillion stories of sitting with customers and introducing now, whether it was one of the other capabilities, now Workday, and saying, "We're one of the best providers in the ecosystem around these enterprise system implementation capabilities," and just get the, "Wow. I had no idea that you were going to be able to bring this capability to me." I mean, leveraging these revenue synergies, which I mentioned. It's not about cost synergies. I mean, this is sure we find them along the way, but this is really about creating revenue synergies atop of the ASGN enterprise relationship list. Financial criteria is the next gate. They have to be accretive. Sometimes when we say accretive, it's like, "Oh, well, they have to be accretive to adjust to EPS and then EPS and what have you." They have to be accretive across the board.
They have to be accretive to our strategy, meaning it has to meet that strategic filter. They have to be accretive to our own revenue growth, meaning they have to be growing faster than we do. They have to be accretive to our margin profile, both at the gross margin level and at the EBITDA margin level. We are demanding that in every analysis of every particular acquisition that we are looking for. We are looking not just for accretiveness. We are looking for it across the board in every way. In order to make this happen, we are playing off of our strong and healthy balance sheet.
I think the people in this room and the rest of our investor community have seen us many times take on a little bit of leverage, a modest amount of leverage, if you will, on our balance sheet to make a strategic acquisition, which is going to help us build for the future. Then based on the great free cash flow characteristics of our business and the businesses that we're acquiring, we can very quickly, within 12-24 months, delever back below our targets of 2 and a half, where we feel like we're kind of optimized and ready for the next acquisition. Marie's going to talk a little bit more about that in a few minutes. We're always developing pipeline. Randy Phillips here in the back of the room is head of our corp dev at the ASGN level.
He is always maintaining our strategic filter of solution capabilities that we're thinking about and going through the marketplace. Where do these opportunities come from? Primarily, they come from our own presence in the market. We see them next to us as we're competing for business. That was the case in the ServiceNow opportunity. We were bidding at one of the big telecom businesses for a pretty sizable ServiceNow project. We got to the last 2 and unfortunately didn't win, but we looked to our right and said, "That GlideFast business is pretty good." They filtered that up through the organization. Eventually, we ended up coming together as 2 businesses. They come through client referrals.
Clients will say, "I think you ought to take a look at XYZ." They're a really important strategic partner of ours, and maybe they're a strategic fit with your business and the scale that you bring and reputation to all this. They come from alliance partners sometimes, where a tech and alliance partner will say, "Look, one of our partners over here I know is looking to get acquired. I really think a lot of them. That's maybe somebody you should talk to." Obviously, they come through bank processes. Our coverage teams here today, they do a great job of staying connected with us, making sure that we know that they know what we are looking at, and they help bring opportunities to us in that same way. Pipeline is just an ongoing part and a muscle of this organization.
I think we've proven it over the past, and we continue to put a lot of effort into that. I'd like to focus on 2 of our most recent acquisitions here. GlideFast Consulting, I mentioned that we met during that bidding process on that telecom piece of work, has for multiple years been a partner, elite partner of the year in the ServiceNow ecosystem. Head to head with the big global consulting firms every day, winning their share of work and more. They've been a part of our portfolio now for 3 years, and it's really been seamless and fruitful on both sides of the fence. Their team has been able to grow not only their own business, but about now 40% of the bookings of that business come from the enterprise ASGN accounts, as an example. It started immediately within the first 6 months.
TopBloc, which is our most recent acquisition in the first quarter of this year, we found a wonderful partner in Chris and his co-founding partners and that entire business. We were looking at the world of AI and saying, "Look, in the future, we need to have a presence in enterprise software as it relates to financials and human capital management systems." The reason is data is everything to AI, and most of the data is in the system of record at the ERP, financial, and HCM levels. We then began to look at the landscape of particular software providers, whether it be Oracle, SAP, Workday, and others. We landed on Workday as our favorite choice because it was the most modernized platform. We felt like it was out ahead in terms of its view on AI, agentic AI.
Then began the process of going through our pipeline to see what our opportunities were. Thankfully, I had met Chris about 2 years before, and we had been building a relationship for a little while. We will let that conversation happen here in a minute. I just use that as an example of a very purposeful approach to the market. It does not matter if it is acquirable. There are all kinds of things that are acquirable. We are not trying to get volume on top of volume in staffing or any of these other areas. What we are looking for are best-in-class solution capabilities that are in demand, that we see on our customers' IT roadmaps, that we believe we can bring into our business and create great revenue synergies. With that, I will bring Chris Skinner up on stage, the CEO of TopBloc.
Yeah. Hello, everyone.
My name is Christopher Skinner, and I'm the co-founder and CEO of TopBloc, a Workday implementation and support services organization based out of Chicago, Illinois, that was acquired by ASGN in Q1 of this year. A little over a year ago, Ted and I met for lunch in Boston. I get to the restaurant before Ted. Ted walks in and he says, "Chris, ASGN needs an enterprise resource platform capability, and we want that to be Workday." Not only do we believe that if we buy TopBloc, we would have that immediate capability from a Workday perspective, but we would also be vaulted to the front line of an ecosystem growing at double digits year over year.
On top of that, if we're going to take advantage and support our customers' initiatives from an AI investment perspective, we need to be able to not only deploy and support their ERP, but we need access to that data. At that point, I looked up from my menu and I said, "Ted, I was thinking about getting a Caesar salad." From there, what I did not know I would be getting that day was an eventual acquirer of choice. From our perspective, ASGN brings many things to the table, but first and foremost, a delivery track record of excellence as well as a credibility that we can actually leverage when engaging with net new large enterprise customers. On top of that, ASGN obviously has a vast ne2rk of deep customer relationships that we can bring Workday services to opportunistically.
Finally, ASGN can bring us into sectors and verticals of which we currently have zero penetration whatsoever, like federal. From our standpoint, this looked like a pretty good deal on paper to us. What really pushed us over the edge was a cultural alignment in that Ted and the leadership team support our mantra of growth comes from innovation and differentiation. All in all, this acquisition brings us together, expands ASGN's capabilities, and sets the foundation for accelerating growth going forward. Let's take a step backwards here and ask ourselves, all right, why the focus on ERP? We believe there to be significant demand tailwinds here from a modernization and cloud migration perspective. The initiative surrounding the modernization of customer HR and finance back offices is not only not going anywhere, but we believe to be, frankly, table stakes for enterprise growth going forward.
On top of that, mandates around increased efficiency and robust compliance and security also favor the need for a modern ERP. Additionally, as Ted has alluded to, organizations looking to make further investments in AI and agentic workflow are going to not only need to access their data from an ERP perspective, but they're going to need to be able to leverage it to take action on that data. Finally, given the historic lag in modernization of the back office by the public sector, we believe this to be quite a big opportunity for us as a larger organization going forward here. Lucky for us, Workday is the answer to all of these questions.
On top of that, given now that ASGN can deploy Workday, we can begin to package that notion with our other capabilities in data integration, security, and so on to bring a comprehensive solution offering to our customers. Finally, ultimately funneling them to our ongoing support services from a Workday support perspective. All in all, this acquisition brings ASGN end-to-end capabilities in Workday and adding them to a broad partner ecosystem so that we can solve our customers' complex ERP challenges. A little bit about why we are now a premier Workday partner. Over the last 10 years, TopBloc has spent a considerable amount of time and resources creating IP that allows us to automate the extraction, transformation, and migration of customer ERP data from legacy platform to Workday and beyond.
On top of that, we've categorized and standardized much of the configuration that is repeatable across all deployments, allowing our employees the ability to import it into a Workday environment at the click of a button. All of this lends itself to better customer outcomes in the form of faster cycle times from a project timeline perspective, as well as increased cost efficiencies. How do we do this? We've got about 600 certified Workday consultants across not only the U.S., but Mexico. All of them, as mentioned, are certified in Workday, but also trained up to use our tools and accelerators so that when they come out of training, not only are they immediately billable, but they are adding value to projects in the form of task ownership.
Third, these folks are supporting, obviously, the Workday full suite of services from an implementation and ongoing application management support perspective. We have also got additional services that we offer around customer success outcomes, particularly advisory, digital transformation, and change management. Naturally, we have all said the word AI too much today, but we will stay on the forefront with Workday to co-develop these notions and bring them to the market as Workday's kind of AI deployment roadmap plays out. Finally, all of these initiatives of ours and our track record over the last 10 years has led us to being one of, if not the fastest growing North American partners in the Workday ecosystem across the last half-decade. We are consistently ranked in the top quadrant of Workday ecosystem analysts across all categories such as Gartner and ISG.
Lastly, Workday did name us at the end of their last fiscal year the Workday Business Impact Partner of the Year, or as I like to call it, just Partner of the Year. All in all here, ASGN did not just acquire Workday as a capability. What they got was a leader in Workday implementations that delivers high ROI with unmatched speed and time to value. If that was not enough hype for us all today, we have got a short video outlining the strength of our M&A motions, particularly when it comes to GlideFast in the ServiceNow industry and TopBloc in the Workday industry.
Our company is not just growing. It is evolving with purpose. Each acquisition strengthens our position and expands us into high-growth markets. When our enterprise customers needed to automate workflows and streamline business processes, we welcomed GlideFast to gain scale in the ServiceNow marketplace.
When the need for deep skill sets in ERP solutions became a must-have, we brought on TopBloc to scale our Workday operations. We streamline systems, enhance connectivity, and maximize performance. Our enterprise platform solutions drive transformation. This is how we accelerate outcomes: technology, engineering, expertise.
T hanks, Chris. Not to embarrass you, but stay right over there.
Not to embarrass you, but I was on the—add one thing to all that. I was on the phone recently with Carl Eschenbach after they were awarded Partner of the Year. Carl said, "Ted, they're my number one partner. They get people from start to value faster than any partner I have in my ecosystem." I thought that kind of said it all. Congratulations, Chris. I think you have a good handle on this.
You've watched us execute M&A as a part of our strategy as it relates to capital allocation and future growth. We have a repeatable playbook. You've got a good sense of that in terms of how we execute this. We tell you what we're going to do, and then we do it. I think that you see over time, as we communicate about our differentiated capability here to really make this work, that we back it up by doing it and then executing on what we do. Scale is a big part of this and the revenue synergy. That's always the biggest takeaway in our relationship as we think about who the right partner is.
You can expect us to continue this pursuit, to be disciplined about it, but also pair it with other forms of capital allocation, which Marie will speak about in a few minutes. I thought before I let Chris go, I would just kind of capstone it here with a few questions and kind of get Chris's responses. Chris, 9 months into the game here, we closed in March. What's been your biggest takeaway to this point?
Yeah, I think 2 major things. First of all, we've been frankly welcomed with open arms. That's been refreshing, especially when it comes to navigating the larger organization. Second, what I think is the most awesome part about this is the enthusiasm and support for our continued growth initiatives.
The team has facilitated introductions to partner organizations, as well as ASGN's existing customer base at basically the drop of a hat whenever anyone says the word Workday. I think 8 months in, we couldn't be happier with where we landed. I think we're already seeing some early returns here. On the solution side, not only do you see Workday implementation capabilities, but you see it in other areas, like services that are around the Workday ecosystem. Tell us about what's it like here as you get access to this enterprise account base and begin to have work opportunities, if you will, in the ASGN clients. Yeah, absolutely. I think, Ted, if you'll recall, 8 months ago, post-acquisition, whatever happens, do not let this acquisition halt your momentum that you already have.
Our focus primarily from an integration perspective has been on ensuring that we not only get our sales teams to meet each other, but that we start to craft go-to-market motions that reflect the totality of the business we can offer. We already have a series of alignments to our ongoing services. To me, that's a multitasking base. We're going to be shy of 100 people. Selective phase in our go-to-market.
Great. Chris, obviously, maybe there are people out here on the webcast that are thinking about selling their business and becoming a part of another organization, whether it's ASGN or someone else. What would you say to them? Yeah, we're just a handful of guys in a basement 10 years ago. After you put basically everything you have into an organization, you build up a level of trust.
Until I met Ted and this leadership team, I did not find that level of trust in a potential. Now, from my standpoint, if I were to answer that question to someone rolling over an acquisition by ASGN, it's for you to have one leadership team. Ted should have been an actor and looked at it and acted on it himself. I believe we think that not only you all have identity and identity planning.
Great. Thanks, Chris. I'm thrilled to be your partner, so is the rest of the organization. Better things to come in. Bigger things have happened already. Better things and bigger things in the future. Yeah. Yep. Great. Thanks, Chris. Okay. With that, I'm going to invite Marie Perry, our EVP and CFO of ASGN, to the stage.
Thank you, Ted.
All right.
I know. Yeah, we're going to do it.
A couple of quick notes. We're going to talk about just coming around the corner in January. I will be celebrating my fourth anniversary at the company. During my time, I have seen ASGN continue to evolve. As Ted mentioned, we are entering the next wave. When I look at the company, I do believe this is an ideal host and investor in the company today. Right? You have heard from the broader team how we're going to continue to build. This is going to be high. I'm just going to take the story one step further and really talk about how our differentiated business model, coupled with our strategy, is going to drive strong financial performance and long-term value creation for shareholders. First, let me highlight the key messages today. We're going to start with the business model that delivers.
Margins, strong free cash flow, and a path to top-line growth. Next, we'll cover our variable cost structure, our strong balance sheet, and then we'll talk about our discipline.
Apparently, the mic isn't working on the broadcast. I just got a message from my podcast. I think we're going to. I can hear it in here. We can put that one up. Use this one? Yes. Follow-up. You can come back. Why don't we take a quick break? I'll come right back. Thank you, Mark. Appreciate it. I'm like, am I speaking? This was planned for the anticipation. Right? This was just part of the build-up. I will say that the slides—so we did not post them earlier, but the slides were posted after the presentation. Got a little soul. The world is a cold, cold place to be.
Want a little warmth, but who's going to save a little warmth for me? We know the fire awaits unbelievers. All of the sinners the same. Girl, you and I will die, unbelievers bound to the tracks of the train. If I'm born again, I know that the world will disagree. Want a little grace, but who's going to save a little grace for me? We know the fire awaits unbelievers. All of the sinners the same. Girl, you and I will die, unbelievers. All right. Is she going to give me? She said she needed to mic me up. I think my mic is on. Is she—do you see her? She's right there. Just because I'm seeing you. Testing, testing, 1, 2, 3. Testing, testing, 1, 2, 3. Okay. That was a dry run for the dry run. Here we go. Just start over again. All right.
Are we ready? As Ted mentioned, my name is Marie Perry, and I'm the Chief Financial Officer of ASGN. I am looking forward, and I know many of you are looking forward as well, to walk through the framework that underpins our financial target and then presenting our 3-year projections. First, by way of background, I bring over 25 years of financial leadership experience to the team. I started my career in public accounting. I've worked in many different industries, holding CFO roles in the past 3 positions prior to ASGN. Just around the corner in January, I will be celebrating my fourth anniversary with the company. I have seen ASGN continue to evolve. As Ted mentioned, we are entering into this next wave, this next phase of evolution. I truly believe it is the ideal time to host an Investor and Analyst Day.
You heard from the broader team. How are we going to continue to win in the marketplace? Today, I'm going to take the story just slightly different in a different direction and talk about how our differentiated business model will deliver strong financial performance and long-term value creation for our shareholders. Let me quickly highlight the key messages today. I'll start with the business model. Our business model delivers resilient margins, strong free cash flows, and a path toward top-line growth. Next, we'll cover our variable cost structure, our strong balance sheet, and our disciplined capital allocation approach. Last but not least, I'm excited to present our 3-year financial projections. Before I go forward, I just want to review the recent past. ASGN and many of our peers have been eagerly awaiting an inflection point.
In November of 2022, when the Fed started raising interest rates, services companies and IT services companies like ASGN started seeing our customers kind of tightening their budget. They did this proactively in anticipation of an economic downturn. This restriction of spending basically occurred in areas like IT staffing, creative digital, permanent placement. These are all areas of our business that are in a cyclical area that we saw a similar decline in that same period. Not knowing how long this cycle was going to last, we put actions in place and will continue to put actions in place to strengthen our foundation. We have in this middle box some of the items, but this is what you heard from the team in terms of strategic initiatives that we are driving on. These are going to position ASGN for that next wave of profitable growth.
Let me take a moment to review the long-term growth algorithm that Ted introduced earlier. As you see, we have 4 pillars. The one thing with this algorithm, this is the framework that underlies the financial targets. At the beginning, this is the framework. We have 4 pillars. Each of the pillars are supported by credible, actionable levers that ensure the growth targets that I will share shortly are achievable and repeatable. I will go through each one of these pillars in a little bit more detail on the following slide. The thing to highlight is this growth algorithm, as Ted mentioned, gives us the confidence that we have the right strategy and tools in place to deliver consistent results and provide long-term value creation for our shareholders. Starting with the first pillar, revenue. Sustainable revenue growth.
On this one slide, we have our 6 growth drivers that Shiv highlighted in detail, providing context and examples. The one thing to highlight is each one of these growth drivers on their own are powerful, but when combined, they're really transformative. What stands out on this slide is that when you see these growth drivers side by side, that they literally, working together, deliver consistent revenue growth that is differentiated and that is a focused drive. Moving from revenues to margins, our resilient margins are a cornerstone of our business model. We have proven our ability to protect and expand our margins over time and repeatedly. I'll start with gross margins. As Ted already mentioned, we are moving up the value chain. High-end, high-margin work, and also focused on outcome-based deliverables to our customers. This strategic shift is resulting in gross margin expansion through business mix.
Next, from a delivery perspective, we are utilizing our US teams and our professionals in the Mexico delivery center to really optimize that mix between expertise and price. You heard today a competitive advantage in our unique go-to-market strategy. It's our scalable labor model. This model allows us to use our recruiting engine, and you heard this from Ted and Shiv, to create these bespoke teams, just-in-time teams that literally are based off of contingent labor that allow us to scale with revenue and protect margins. We are not fighting the utilization of a large bench with our scalable labor model. In addition to driving gross margin expansion, we are also driving structural cost savings. On the top box, streamlining our technology systems, we are moving applications to the cloud. We are phasing out old custom middleware.
This is going to allow us to streamline our own internal data stack, allowing us to manage it more easily, reducing redundancy, reducing complexity, and reducing cost. We are also replacing our legacy ERP system. I'm excited to share our own team from TopBloc is helping us implement Workday across our entire commercial segment. Chris mentioned all the benefits associated with Workday. We are going to reap those as well. We will literally, from an implementation perspective, lower our operating cost as we move from an outdated on-premise solution to a cloud solution. Workday provides a scalable architecture, so we will scale with revenue. An added benefit you heard today as well is that with us implementing Workday for ourselves, we are able to be our own best qual for our customers.
On the bottom box, optimizing SG&A, this is from a process perspective. This is going to result in hard cost savings. We are rolling out a shared services platform across our commercial or consulting segment. It is really supported by our ERP implementation, our Workday implementation, and what you heard about moving toward this unified commercial business. We are going to leverage with our shared services resources, we will actually get some of the same benefits I mentioned earlier. We are going to be able to reduce our operating cost and also scale with revenue. Our third pillar in the growth algorithm is our strong free cash flow. Our cash flow allows us to invest in growth and return capital to investors. As you can see here, we have charted out 5 years. Each year, we have our free cash flow generation with the associated conversion rate.
The conversion rate is a conversion of EBITDA to free cash flow. Averaging over that 5 years, we generate $330 million of free cash flow and a conversion rate of 70%. As you can see in the last 2 years, in 2023 and 2024, our conversion rate is 81%. That is well above the 60-65% conversion rate we target. Our key drivers listed here, we talked about many of them today, our variable cost structure, our discipline around SG&A management, our scalable labor model. The last item here is our discipline CapEx needs. This is really just inherent in our business. Less than 1% of our total revenues are assigned to CapEx. We are going to move next to the balance sheet. Here on this slide, we have our capital summary table.
It really highlights ASGN's ability to have a strong balance sheet and low levels of debt. At the end of the third quarter, we reported approximately $1 billion of net debt, 2.5 times net leverage ratio, and just under $600 million of liquidity. On the right-hand side of the slide, we highlight our ending net leverage ratio. You can see 5 years charted here, all of them below our internal target of 2.5 times. Many of you know in a given year when we perform an acquisition, we may lever up. With our strong free cash flow characteristics, we quickly lever down back to these levels, and then we're acquisition ready. ASGN is committed to maintaining a strong balance sheet. This goes hand in hand with our capital allocation strategy, which is our fourth and final pillar.
As you can see here, we have 3 prongs to our capital allocation. It starts with investing in organic growth. You heard from our solution leaders, from Steve, from Heather, from Marshall, the strategic investments we're making in proprietary AI tools like Pathfinder and Atlas, really investing in upscaling our delivery teams. The recent announcement with Salesforce that Shiv mentioned as well really supports our tech partner alliances. Once we've invested in organic growth, the next best and highest use of our capital is M&A. You just heard from Ted and Chris about our strategic acquisitions, our diligence and discipline that we have in our process, literally our ability to be a choir of choice, and just the recent acquisitions as proof points. Our strong free cash flow allows us to invest organically, execute on strategic acquisitions, and opportunistically buy back shares.
We have bought back 1.2 billion shares since 2021. I am excited to announce that our board of directors just recently approved a 1 billion share repurchase program. This is the largest in the company's history, and it shows our confidence in the company and our commitment to returning capital and investing in growth. Before I leave this slide, I just want to make sure I highlight, and you've heard this before from us, that M&A and share repurchase are not mutually exclusive. It is dependent on opportunity and timing. During our 3 years, over the 3 years as a target, you will see us pursuing both. Let me quickly talk about our recent quarterly outlook. Just one month ago on our earnings call, we reported our third quarter results and our fourth quarter guidance.
Today, we are reiterating our fourth quarter financial estimates as we've summarized here that we provided in late October. Here's the moment. We've set the groundwork, so I'm happy to present our 3-year targets. Starting with our 3-year organic targets. We'll begin with our revenue targets. Starting with our 3-year revenue targets. Beginning with revenue on a consolidated basis, we are projecting organic revenue CAGR of 4-6% over the 3-year period. At the end of the 3-year period in 2028, we are projecting Adjusted EBITDA margins ranging from 12.5-13.5% and generating cumulative free cash flow of upwards of $1 billion or a 60-65% conversion rate. I said we started out with organic targets. Organic targets are only a portion of our story.
With our strong free cash flow and our strong balance sheet and our free cash flow characteristics, we are able to accelerate our revenue growth and expand our margins through acquisitions. I will share the impact of that on this slide. On this slide, we'll talk about our revenue targets by segment and then the contribution from acquisition. Starting with commercial, we are projecting revenue CAGR of 5-7%. Programmed into these targets are that our commercial consulting will grow above market. This is really driven by the 6 core solutions in those high growth areas that Shiv highlighted. For federal, we are projecting our CAGR to be 3-4%. This is roughly in line with market. Our federal government is a large spender in IT. As Ted mentioned, it's an important part of our overall diversified program.
Thinking about from a timing perspective for revenue, we are projecting growth in 2026, moderate growth in 2026, and really accelerating in years 2 and years 3. We talked about the opportunity to augment our organic growth with acquisition. You can see at the bottom of this blue box that we are anticipating an additional $800 million-$900 million of additional revenue through acquisition, really reflecting double-digit growth from a CAGR perspective. Not knowing when exactly the acquisition will occur, for modeling purposes, we assume that all acquisitions occur in the middle of 2027, just the middle of our 3-year term. Moving to margins. We are projecting margin improvement from EBITDA of 200-300 basis points over the 3-year period. On the right-hand side, we have the 2 drivers and boxes.
A majority of the driver of the margin improvement is from our structural cost changes that I outlined earlier in SG&A and literally generating up to $80 million of annualized savings. The remaining portion of the margin improvement is coming from our business mix. As we continue to scale up in commercial consulting, driving additional business mix. Last but not least, as our revenue growth exceeds our cost, we will gain operating leverage, expanding our margins. As I come to the end of my slides, I'd like to reiterate what matters most. ASGN is committed to driving and delivering strong financial performance. That's as a result of revenue growth and margin expansion. We are also committed to maintaining a strong capital allocation strategy that is going to, as I mentioned earlier, allow us to invest in growth and return capital to shareholders.
This is going to give us a clear path to achieve our 3-year targets. With that, I'll hand it back over to Ted for some closing remarks. Thank you.
Great. Okay. Look, we've brought us all the way here to the finish, if you will, of our prepared remarks. Really, the conclusion is why invest and why now? First of all, I think it goes without saying we're at, from a valuation standpoint, historic lows. Meanwhile, the company has not been resting. We've been moving ourselves into higher value opportunities, both in terms of the market we serve and historically in terms of the peer group we associate with. We have distinct advantages. I think you heard that multiple times today, both in how we go to market, our enterprise account-based solution capabilities, and our delivery model. We're transforming as a business, definitely becoming stronger as one business EverForth, bringing all of our services to bear on each client opportunity. I mentioned the differentiated delivery model.
That really is the heart of what makes us resilient and also allows us to remain fresh, if you will, in terms of technology skill sets. We have an unwavering commitment, as we always have, to our investor community. You see here growth, margin expansion, better bottom line over the 3-year period, and disciplined capital allocation into both acquisitions, which will drive us for the future, and return of capital to shareholders with the new authorization. Now is the time. The marketplace is readying itself to spend at normal and then higher levels as they adopt agentic AI opportunities within their organization. We are perfectly positioned to serve them as they go forward and win together. Okay. With that, I want to conclude, and we're going to begin Q&A. Right, Kim?
That is correct. We're going to have our second Q&A session now. Before we open it up to lunch, I'm just going to give all of the panelists will come back on and same instructions as before. Raise your hand. We'll come to you, say your name and your firm. One question, and if we have more time, of course, we'll take your follow-ups. Okay. If you have a question, oh, we got one right here. Okay.
It's Kevin McVeigh from UBS. Again, thank you all for doing this. Really, really helpful. On that M&A, and probably hard to quantify, but any particular segments you're focused on across the enterprise? I guess when you think about the mix of staffing relative to services, does that stay constant over that same time period, or is that going to be more a function of the client needs?
Yeah, I think both good questions. Kevin, I'll take the second one first.
Thank you.
There's no doubt that the mix of higher valued services and our consulting technology services areas will continue to be a bigger and bigger part of the mix. I think it's based on, A, where we're investing, B, where the customers' needs are, C, where we're trying to drive higher value results, if you will, for our own economic benefit and for that of shareholders. Today, it's about 65% of the mix. That will continue to grow to 70-75-80% as we go. I don't think there's a target. I just think that that marketplace is obviously larger. We showed that on one of the slides. It's got more dynamic growth drivers. We're really differentiated there. We're seeing better uptake than the market. I think in terms of the mix of the business, that's what you'll see.
As it relates to acquisitions, I think we're kind of leaving a place almost where we think about acquisitions in one segment versus another. Most of these are solution capabilities. I think we're beginning to see now that these solution capabilities can play across all our industry segments, not just commercial or federal. I think TopBloc is a great example of that. GlideFast, too, are entering more and more opportunities in the federal marketplace. We just won a wonderful piece of work with our postal service client to bring ServiceNow capabilities to their operations out in all their field locations, which is a great example of our commercial team teamed together with the client-facing team in the federal business can deliver these solutions that now port across all industries, including federal government.
Hi. It's Jeff Silber with BMO Capital Markets. Marie, I think in one of your slides, you said you expected the commercial business to grow faster than the market and the federal business to grow in line with the market. How do you define the market? Who are your peer group? Who do you guys benchmark yourselves against?
Yeah, no, that's a good question. When we looked at our peer groups, we first looked at Gartner's information. We're a bit of a sum of the parts. We have a component that is commercial consulting, that's federal, and then we also have our assignment business. Kind of looking at the Gartner information from that, we also looked at peer group information to determine what market is. I will tell you just the slide that Shiv had that showed the Gartner information by solution capabilities. You actually can see the growth rates for the 3 years associated with those individual ones. As Shiv said, some of those are growing at double digits.
Using all of that and then layering that on top of our go-to-market, our growth drivers that I highlighted basically get us to our targets that we have.
You kind of have 3 data points, right, Jeff? You have, well, what are the third-party people say? Obviously, we can see that. That was on the slides. What is the peer group doing? We can see that. That's obviously in the marketplace. The third is our own momentum and how we view the opportunity and what's the momentum inside the business and where are we investing. You have to pull all those together, if you will, to try to come to what you think a long-term growth rate could be, if that makes sense. Yeah. Go ahead, Mark.
Mark Marcon from Baird. Really appreciate the presentation. Marie or Ted, when we take a look at the 4-6% organic growth, and particularly the 5-7% on the consulting on the commercial side, what does this imply in terms of core assignment? What are you assuming for that? As you're continuing to move up on the value chain, I mean, we take a look at TopBloc. I cover Workday. I heard many great things about you. We take a look at GlideFast. We take a look at InterSys. You've got certain portions of the business that are growing really quickly and that are high value. How do we think about kind of what's going on under the surface? I'm wondering, how much are you thinking about volume versus price? Because on some of those higher value-added areas, your pricing should be better.
This is related to the margin side, but also just the risk profile. You mentioned that you're going to be taking on more risk on the deliverables. Can you expand a little bit on that? How are you going to manage that risk?
All right. A lot there. I'll let you.
It's all one question.
I'll take the second 2-thirds. I'll let Marie take the.
You'll have to remind me which one that is, though.
Which is, how did you think about, I mean, I think Mark wanted to hear again, how did you think in the 3-year model, the assignment growth versus the other?
Yeah. Good question. On the assignment growth, we're assuming low single digits. From a commercial consulting, high single digits. We already mentioned from a federal, it's mid to low single digits or the 3%-4%.
If you think about that in terms of what's happening today, Mark, obviously, we're getting growth in our commercial consulting business, but we're being strained a little bit with how customers are dealing with their IT and other staffing programs. They continue to stay very muted today. That's a little bit of anchor. If you roll forward, what we think is going to happen is modest spending, better in the 2-thirds than in the first-third. Underneath that, a return to growth in staffing, but not at the same dynamic level as the higher margin consulting operations of the business.
What about the price volume?
Yeah. Go ahead, Shiv.
Oh, finish up, Ted.
I was just going to say, I think every day what you're trying to do is serve the customer. And you're trying to meet their needs. And you're bringing these solution capabilities to bear on that. And you're competing in the marketplace in order to win those opportunities. I think, and I'll let Shiv take the rest of this, but I mean, in a lot of these areas, we come at a lower price point. And that's part of our competitive advantage. In other areas, it's a different contemplation, like in ServiceNow and Workday.
Yeah. Look, I think the way to think about it is our price is going to be a function of the solutions and how we deliver our solution mix. As we've ramped up nearshore and as we continue to ramp up offshore, as I described in each one of our capabilities, we're going to figure out what's the optimal way to deliver. You can't look at a billable rate per hour or something like that. It's really the solution mix and ultimately the margins that we drive from a gross margin perspective. They are a true determinant of sort of how we're solutioning. Now, success in fixed or more outcome-based models, I mean, Chris's business is a 100% outcome-based model. And we're bringing more of that into enterprise platforms.
That knowledge and that insight is allowing us to think about the same things in areas like data, in areas like cloud, and others. We are building on that space as well.
I was wondering if you could update us just on the variables that would take you to the high or low end of your fourth-quarter guidance. With respect to acquisitions, you referenced your own valuation and valuations in the group are depressed right now. How do you think about acquisition multiples in that context? Thanks.
I don't think we're going to comment about in the quarter.
No, we reiterated.
The numbers we gave are the numbers we gave. In the 3-year plan, Marie, what gets you to the high end of the brackets and the ranges that you gave?
Yeah. The high end of the brackets and the ranges, it's really from execution on optimizing our go-to-market strategy. Then opportunities around the one big beautiful bill from a federal government perspective. Literally from the gross margin perspective, it's capitalizing and executing on the structural cost savings that we mentioned.
Which we control.
Which we absolutely control.
Important.
That are in process and that are phased out. As I mentioned, we will see those savings throughout the 3-year period. They will be fully realized by the end of the 3-year period.
I think another kind of just important add-on to that is if you think about if you go back and do the math around the inorganic add to the organic ranges that Marie gave, it gets you to double-digit growth. I think achieving those is going to get us to double-digit and at or hopefully beyond the high end of the range on the EBITDA margin side.
Yeah. Do we have any additional questions? OK.
So Marie, you talked about some of the operational efficiencies and gave the margin expansion targets. Can you or anyone comment on what sort of flexibility that allows for in the model for continued investment? We heard a lot about solutions you're building out, IP, those types of areas. So how much investment are you allowing for with those targets in mind?
Good. Let me put that one. From an investment, what's so great about the structural cost changes is the expectation of those cost savings is really to go down to the bottom line.
I think from an opportunity that we have, there's other costs within our organization that we can reallocate to what Shiv was talking about, our go-to-market strategy and our resources, taking those resources that we have today and reallocating them to really drive our go-to-market strategy. It is a bit of a combination. We are taking a nice portion of those structural cost changes down to the bottom line.
That was a net number. There is new investment incorporated into the model. That $80 million of structural cost changes is obviously a net number.
Yeah.
Mark Marcon from Baird again. One area that's been very successful for you is nearshore. Shiv, you mentioned potentially doing more in India. Can you expand a little bit more on that in terms of both the nearshore and the offshore capabilities that you could have? Would that be built out? Obviously, InterSys was an acquisition. In terms of future growth, do you expect that that's going to continue to be organic or inorganic or a mix of the 2? How big can that ultimately be? If I could sneak in a follow-up for Chris. Chris, what happened to your growth rate post the acquisition? Did it end up accelerating, decelerating? You were growing at a pretty rapid rate. Curious about that. Thank you.
Let me take the first part, Chris. Mexico, we have about 1,500 professionals, as we talked about, engineering professionals. Chris can talk to how we're expanding on that and building on that organically on the Workday side of the house as well when he talks. As far as India is concerned, we already have a footprint. It's a small footprint. We have about 350 engineering professionals across some of our businesses which came in through acquisitions. Look, when you looked at what Ted put up there in terms of strategic filters, that's clearly one of the things we're looking at from an acquisition perspective as a filter is a pretty reasonable-sized India-based footprint. That's definitely one of the strategic filters. Doesn't mean that's the only route we can take. We're obviously looking at organic ways to grow as well. There's lots of ways to grow organically.
All options are on the table. We're evaluating all of that with reference to growth in India. Look, as far as growth rates are concerned, the sky's the limit. I mean, the talent pool exists. It's really a function of, as I said, we don't think about these things in isolation. We really think about it in the context of the solutions that we plan. As our solutions evolve and our clients' needs for how we service those solutions evolve, that dictates our delivery model and our footprint to a large degree. Right now, India has a need for us because in a lot of our solution areas, that's a competitive differentiator. It's got a price point that is attractive from a margin perspective. We're constantly calibrating these things.
The growth rate and the organic growth rate of that footprint, whether it comes in organically or inorganically, will be a function of how we see demand and our client dynamic shift.
On that note.
This is Mike.
We started out the year with the single-digit number of consultants in Mexico. We're on target to ramp that up to close to 100 this year. We're undergoing those same motions as well. To your question about growth, I think we're on target for the year as far as what we were hoping to achieve at the time of the acquisition. From an acceleration perspective, I think that this year is spent getting the teams to get to know each other so that next year we can formalize some of these go-to-market motions and then have those sales be additive to what we would be able to achieve organically with our existing Workday sales team.
Kevin, from UBS, my last question, I promise. Marie, the pacing of the buybacks, any way to think about that relative to obviously, the M&A guidance was terrific. Just how you're thinking about the pacing of that billion-dollar buyback. Does it stay within the 1.5-2.5 turns all in from a leverage perspective?
Yeah. From a buyback perspective, the $1 billion really ties to the $1 billion of free cash flow over the 3-year period. The buyback does not have a definitive time. Again, it ties back to that. I would just say back to what I said earlier, it is really kind of dependent on opportunity and timing. We will have the opportunity to continue to buy back shares.
Kevin, if you just think as the past as a lesson for the future, when we're not making an acquisition and we're under our target, we've been dedicating most of all cash flow during the quarter to share repurchases. That is kind of in sync with kind of Marie's 3-year view.
Right.
Last question for me, too. With respect to what you need to do to achieve the $80 million in savings over 3 years, do you need to invest materially and sort of have margins go a little lower in the first year in order to get there?
No, that's not the way it was built. There's some investment, right, Marie, but offset by cost savings.
That's right.
Yeah.
That's right.
I think one more thing is, and she made a comment on this, but I'll just say it one more time. I wouldn't look at it as $80 million divided by 3. It ramps up during the period. Really, you'll get a flavor of that as we go through next year as we give quarterly guidance. Just like our expectation and the plan around revenue growth was more modest in the front end, more robust in the back, the realization of these cost savings will follow a similar track.
I mean, it's a very, I mean, it's a phased approach, highly managed, in process. This isn't things that we're looking at doing. All of those structural cost savings that I highlighted are literally in the works. We are already starting to see some savings associated with that. As we give our results at the end of the quarter and talk about our forecast, we'll provide additional details.
It's Mark, again. Just sneaking a real fast one in for Marie. In terms of those longer-term targets, how should we think about both CapEx and stock comp as a percentage of revenue?
Yeah. From a CapEx perspective, we're still looking at the 1% or less than 1% of total revenue for CapEx. Stock comp should be consistent with our current practice.
OK. I think we can go on all day. I have been told we have to stop. Ted, do you want to conclude it for us?
Yeah. I'd just like to end here and say, first, thanks to the presenters for being a part of this. This is definitely taken away from their day job. I think important for you to hear from them directly as we reframe the business. We're looking forward to going forth as EverForth. We say, go EverForth. Right?
Go EverForth.
Yes.
Lunch. We're going to let them set it up right now. Thank you again and for your support of ASGN, EverForth.