ASGN Incorporated (ASGN): BCG Matrix [Dec-2025 Updated]

You're looking at ASGN Incorporated right now, and the story is clear: they're aggressively shifting from old-school staffing to high-margin tech consulting, which is why the BCG Matrix analysis for late 2025 is so telling. The Commercial IT Consulting side is definitely a Star, firing on all cylinders with 17.5% growth and now making up 63% of the whole pie, while that traditional Commercial Assignment Revenue is clearly a Dog, shrinking by 13.2% to $376.4 million. The Federal Segment acts as the reliable Cash Cow, sitting on a $3.1 billion contract backlog, stabilizing things even with a slight Q3 decline. So, where do the new AI bets and volatile TMT revenue fit in as Question Marks? Let's map ASGN's entire portfolio based on Q3 2025 performance to see exactly where the firm needs to invest or divest resources next.

Background of ASGN Incorporated (ASGN)

You're looking at ASGN Incorporated (ASGN) right as it's making a significant structural pivot, moving from its established name to a new parent brand, Everforth, set to take effect in early 2026. This move is designed to unify its six current brands-Apex Systems, Creative Circle, CyberCoders, ECS, GlideFast, and TopBloc-under one dynamic identity to drive better cross-selling and operational efficiency.

ASGN Incorporated is a key player providing IT services and solutions across both the commercial and government sectors. As of the third quarter ending September 30, 2025, the company posted total revenues of $1.01 billion, which represented a year-over-year decrease of 1.9%. For the trailing twelve months ending September 30, 2025, ASGN's revenue totaled $3.99 billion, marking a decline of 4.86% compared to the prior year period.

The business is strategically leaning harder into consulting, which is where the higher margins are. In Q3 2025, IT Consulting Revenues made up approximately 63% of the total revenue mix, an increase from 58% in the same quarter last year. Still, the softer macroeconomic environment hit the assignment-based revenue, which was $376.4 million, down 13.2% year-over-year.

The company operates through two main segments. The Commercial Segment brought in $711.3 million in Q3 2025, down just 1% from the prior year, though its gross margin improved by 40 basis points due to that higher consulting mix. The Federal Government Segment recorded revenues of $300.1 million, seeing a steeper drop of 3.9% YoY, partly due to losing some higher-margin government work.

Financially, the third quarter saw an Adjusted EBITDA Margin of 11.1%, resulting in an Adjusted EBITDA of $112.6 million. The company generated $72.0 million in Free Cash Flow for the quarter, and its cash on hand stood at $126.5 million at the end of September 2025, with a Net Leverage Ratio of 2.4 times. To signal confidence, the Board authorized a new $1 billion share buyback plan, the largest in the company's history.

ASGN Incorporated is actively pushing innovation, having recently unveiled an AI Factory aimed at accelerating client transformation projects. This focus aligns with the broader IT consulting and implementation market, which analysts project to grow at a compound annual rate of 4.19% between 2025 and 2029.

ASGN Incorporated (ASGN) - BCG Matrix: Stars

You're looking at the units within ASGN Incorporated (ASGN) that are dominating a growing market space, which is exactly what the Stars quadrant represents. These are the leaders right now, but they demand heavy investment to maintain that lead, so the cash flow in often equals the cash flow out.

The core of ASGN Incorporated (ASGN)'s Star positioning is clearly in its high-end technology consulting services. This area is consuming cash for growth but is capturing significant market share. For the quarter ended September 30, 2025, IT Consulting Revenues accounted for approximately 63% of total revenues, a clear step up from the 58% seen in the year-ago period. This shift shows you where the company is successfully placing its bets.

Specifically, the Commercial Segment's consulting arm is showing explosive growth, which is a strong indicator of a Star. Commercial Segment consulting revenues hit $334.9 million in Q3 2025, representing a 17.5% year-over-year increase. This segment's strength is what's fueling the overall high market share indicators for the consulting practice.

Here's a quick look at the key performance indicators that define these high-growth areas for ASGN Incorporated (ASGN) as of Q3 2025:

The focus on Digital Transformation and Cloud Engineering solutions is directly reflected in the Commercial Segment's trailing-twelve-month (TTM) book-to-bill ratio of 1.2x. This metric tells you that demand for these services is outpacing current delivery capacity, a classic sign of a market leader in a high-growth phase. Furthermore, the strategic push into AI and machine learning deployments for enterprise clients is happening within this high-growth consulting framework, suggesting these services will be the next generation of Cash Cows if market growth moderates.

You can see the strong operational output supporting this growth, even if the cash is being reinvested:

• Total IT Consulting Revenues (Q3 2025): $635.0 million.
• Free Cash Flow generated (Q3 2025): $72.0 million.
• Adjusted EBITDA Margin (Q3 2025): 11.1%.
• Shares repurchased (Q3 2025): Approximately 0.9 million shares for $46.0 million.

Honestly, the fact that the consulting mix increased from 58% to 63% year-over-year shows a successful, deliberate pivot away from the more cyclical assignment revenues, which declined 13.2% year-over-year in Q3 2025. That shift is what keeps these consulting units firmly in the Star category, demanding continued investment to secure future market dominance.

ASGN Incorporated (ASGN) - BCG Matrix: Cash Cows

You're looking at the core stability of ASGN Incorporated (ASGN) here, the business units that fund everything else. These are the high market share players in mature government IT markets, and they are designed to be cash machines, not growth engines.

The Federal Government Segment (ECS), which is a prime example of a Cash Cow for ASGN, holds a stable contract backlog of approximately $3.1 billion as of the third quarter of 2025. This substantial backlog provides excellent revenue visibility, which is exactly what you want from a mature, high-share business unit.

This segment's strength is rooted in its reliable customer base. Defense and Intelligence customer revenues provide a reliable, non-cyclical revenue stream, which is crucial for smoothing out any commercial volatility. For instance, in the second quarter of 2025, Defense & Intelligence represented 43.6% of the Federal segment's revenue mix. Still, even these stable areas face headwinds; the Federal Government segment saw a revenue decrease of 3.9% year-over-year in Q3 2025, management cited potential impacts from government shutdowns and award delays.

The overall company benefits directly from this unit's cash generation. Core Federal IT Consulting, as part of the broader federal business, is projected to contribute significantly to the company's overall financial health. ASGN anticipates generating cumulative free cash flow exceeding $1 billion over the next three years, which is the direct result of milking these established, high-margin operations. That's the cash you use to fund the Question Marks, not the cash you spend on aggressive promotion.

Here's a quick look at the segment dynamics that define this Cash Cow status:

• Federal Government Segment Backlog: ~$3.1 billion
• Q3 2025 Federal Revenue Change: -3.9% year-over-year
• Defense & Intelligence Revenue Share (Q2 2025): 43.6% of Federal revenue
• Projected Cumulative Free Cash Flow (Next 3 Years): >$1 billion

The mission-critical IT solutions provided to civilian agencies help stabilize overall revenue, even when facing minor dips. For example, while the segment experienced that Q3 2025 decline of 3.9%, the nature of the work-supporting core government functions-means the demand is inelastic. You defintely want to maintain this infrastructure, perhaps investing just enough to keep efficiency high and the cash flow steady.

To better visualize the stability and the current state of the Federal Government segment, consider these figures:

The strategy here is simple: invest in infrastructure that supports efficiency, like modernizing the systems that service these contracts, to maximize the cash extraction. Don't chase growth here; milk the gains passively.

ASGN Incorporated (ASGN) - BCG Matrix: Dogs

When you look at ASGN Incorporated's portfolio as of late 2025, the 'Dogs' quadrant is clearly represented by the traditional, macro-sensitive staffing components, primarily the Commercial Assignment Revenue stream. These are the units with low relative market share in markets that aren't seeing the high growth ASGN is targeting elsewhere.

For the third quarter of 2025, this specific business line generated revenues of $376.4 million. That figure reflects a significant year-over-year decline of 13.2%. This softness is exactly what you'd expect from a Dog; it's tied directly to the broader economic cycle, meaning you can't count on organic growth to pull it out of its low-growth category.

The core issue here is that these are lower-margin, non-specialized IT staffing services. They are getting squeezed by two forces: increased competition and the pressure from automation, which naturally erodes the value of simple staff augmentation. Furthermore, these are the very portions of the Commercial Segment that management flags as being highly sensitive to changes in macroeconomic cycles, which are seeing continued softness.

The strategic imperative for ASGN is clear: these legacy staffing contracts do not align with the stated strategic shift toward high-value consulting. You're seeing the company actively trying to divest from this area, not through a sale, but by letting the consulting side grow its share of the pie, effectively minimizing the Dog's footprint.

Here's a quick look at the revenue dynamic within the Commercial Segment in Q3 2025, showing the stark contrast between the declining assignment business and the growing consulting business:

The overall IT consulting revenue, which includes both commercial and federal, hit $635.0 million, representing approximately 63% of total Q3 2025 revenues, up from 58% in Q3 2024. This shift in mix is the active strategy to starve the Dogs and feed the Stars and Cash Cows.

The characteristics of these Dog units within ASGN Incorporated suggest several immediate actions you should monitor:

• Avoid expensive turn-around plans for these units.
• Minimize cash consumption and resource allocation.
• Focus on divestiture or strategic phasing out.
• These units frequently break even, tying up capital.
• They offer almost nothing in terms of future growth potential.

Honestly, the data shows the business is already executing the divestiture strategy by prioritizing the high-margin consulting work, which saw commercial consulting grow 17.5% year-over-year in the same quarter the assignment revenue fell 13.2%. That's the real story here; the Dog is shrinking by design.

Finance: draft a 13-week cash view focusing on minimizing working capital tied to assignment contracts by Friday.

ASGN Incorporated (ASGN) - BCG Matrix: Question Marks

You're hiring before product-market fit for some of your newer, high-potential bets; that's the essence of managing Question Marks at ASGN Incorporated. These are areas with high market growth prospects but where ASGN Incorporated currently holds a low market share, meaning they consume cash while building that crucial market position. The strategy here is clear: invest heavily to capture share quickly or divest.

The push into next-generation technology is a prime example of where ASGN Incorporated is placing significant capital expenditure, hoping these efforts transition from cash-draining ventures to future Stars. This is evident in the recent, major technology initiatives.

• New AI Factory framework launched in November 2025 to scale AI from concept to production.
• The AI Innovation Center was established earlier in 2025 to centralize AI expertise.
• The AI Factory includes four components: AI Intake & Project Management, Citizen Developer Gateway, AI Delivery Engine, and AI Watchtower.
• The company claims the AI Factory can reduce AI deployment time from months to weeks.

Still, the market volatility in certain areas shows the risk inherent in these high-growth, low-share segments. For instance, while the overall pivot to consulting is positive, specific high-growth verticals have shown signs of strain, suggesting adoption of new solutions isn't uniform or immediate.

Consider the performance across key commercial verticals in the second quarter of 2025:

The Federal Segment provides a clear illustration of the cash-consumption challenge when low-margin work dominates. The reliance on lower-margin software license revenues in this segment directly pressured gross margins, a classic Question Mark symptom where market share is gained, but profitability lags.

Here's the quick math on that margin pressure:

• Federal Government Segment Gross Margin in Q2 2025 was 19.2%, a decline of 140 basis points year-over-year, attributed to higher volume of low-margin software licenses revenue.
• Federal Government Segment Gross Margin in Q3 2025 was 20.3%, a decline of 40 basis points year-over-year.
• Federal Government Segment Revenue in Q3 2025 was $300.1 million.

The strategic investment in new digital engineering capabilities, often represented by the growth in consulting, is the intended path to market share gain. Commercial consulting revenue growth of 17.5% year-over-year in Q3 2025 shows traction in these higher-value areas. However, the overall assignment revenue-which often represents more transactional or staffing-based work-was $376.4 million in Q3 2025, representing a 13.2% year-over-year decline. This softness in assignment revenue, which was $382.4 million in Q2 2025 (down 13.9% YoY), highlights the ongoing need to rapidly scale the newer, higher-margin digital engineering and AI offerings to avoid these units becoming Dogs.

Finance: draft 13-week cash view by Friday.