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View All NewsASGN revenue up 37% in Q4 with acquisition of ECS; rises 12% on pro forma basis
Revenue at ASGN Inc. (NYSE: ASGN) jumped 36.9% in the fourth quarter with revenue growth across business lines. However, fourth-quarter revenue was up 11.8% on a pro forma basis — which treats revenue from ECS Federal LLC, a government services contractor the company acquired in April 2018, as if both it and ASGN had been combined since the beginning of 2017.
Revenue in ASGN’s Apex segment rose 13.1% in the fourth quarter, and revenue in its Oxford segment rose 4.7%. ECS revenue was up 14.0% on a pro forma basis.
| (US$ thousands) | Q4 2018 | Q4 2017 | % change |
| Revenue | $929,650 | $679,035 | 36.9% |
| Gross profit | $271,896 | $220,677 | 23.2% |
| Gross margin | 29.2% | 32.5% | |
| Net income | $45,881 | $67,331 | -31.9% |
Calabasas, Calif.-based ASGN provides IT and professional services in the technology, creative/digital, engineering, life sciences and government sectors. In January, ASGN acquired DHA Group Inc. for $46 million in cash. DHA’s customers include the FBI and other government entities, and it will become part of ASGN’s ECS segment.
Quote
“We continued to see incremental spending among our commercial and government clients over the past quarter, notwithstanding the debate regarding the strength of the US economy and the current stage of economic expansion,” CEO Peter Dameris said.
Revenue by segment
| (US$ thousands) | Q4 2018 | Q4 2017 | % change |
| Apex | $604,600 | $534,700 | 13.1% |
| Oxford | $151,200 | $144,400 | 4.7% |
| ECS | $173,900 | -- | -- |
Permanent placement revenue
| (US$ thousands) | Q4 2018 | Q4 2017 | % change |
| Apex | $13,900 | $10,400 | 33.7% |
| Oxford | $21,300 | $21,200 | 0.5% |
Gross margin by segment
| Q4 2018 | Q4 2017 | |
| Apex | 30.1% | 30.0% |
| Oxford | 40.7% | 41.8% |
| ECS | 16.5% | -- |
Average bill rates
| Q4 2018 | Q4 2017 | |
| Apex | $61.24 | $57.46 |
| Oxford | $98.30 | $101.16 |
Full-year results
| (US$ thousands) | 2018 | 2017 | % growth |
| Revenue | $3,399,781 | $2,625,924 | 29.5% |
| Gross profit | $1,023,651 | $850,073 | 20.4% |
| Gross margin | 30.1% | 32.4% | |
| Net income | $157,706 | $157,675 | 0.0% |
Guidance
For the first quarter, ASGN forecast revenue of $916.6 million to $926.6, gross margin of 28.8% to 29.2%, and net income of $35.8 million to $39.5 million.
Share price and market cap
Shares in ASGN were down 1.96% to $65.46 as of 1:31 p.m. Eastern time today, and the company had a market cap of approximately $3.50 billion, according to FT.com.