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View All NewsOn Assignment revenue up 7% in same billing day, constant currency basis; growth is in Apex division
Third-quarter revenue at On Assignment Inc. (NYSE: ASGN) rose 6.6% on a same billing-day, constant currency basis. Gross margin narrowed and net income increased at the Calabasas, Calif.-based provider of technology, life sciences and creative staffing.
Revenue in On Assignment’s Apex division rose 9.3% in the third quarter. Apex includes Apex Systems, Apex Life Sciences and Creative Circle. However, revenue in the company’s Oxford division, which includes fell 4.0%; the division includes Oxford Global Resources, CyberCoders and Life Sciences Europe.
The company noted that hurricanes and related flooding in Texas and Florida adversely affected third-quarter revenue by $1.0 million. However, the company’s acquisition of StratAcuity, a Boston-based provider of clinical and scientific staffing, added $3.0 million to third-quarter revenue.
Gross margin narrowed in the quarter and was primarily the result of a lower mix of direct-hire revenue.
| (US$ thousands) | Q3 2017 | Q3 2016 | % growth | % growthon same-day and constant currency basis |
| Revenue | $667,048 | $629,401 | 6.0% | 6.6% |
| Gross profit | $218,315 | $207,120 | 5.4% | |
| Gross margin | 32.7% | 32.9% | ||
| Net income | $34,856 | $29,775 | 17.1% |
Quote
“Our financial results reflect a marketplace that continues to embrace our delivery/development model and each of our divisions performed in line with our expectations for the quarter,” On Assignment CEO Peter Dameris said. “The progress we made in the second quarter of 2017, in improving the overall financial performance of the Oxford Segment, continued into the third quarter.”
Revenue by segment
| (US$ thousands) | Q3 2017 | Q3 2016 | % growth |
| Apex | $517,500 | $473,600 | 9.3% |
| Oxford | $149,600 | $155,800 | -4.0% |
Permanent placement revenue
| (US$ thousands) | Q3 2017 | Q3 2016 | % growth |
| Apex | $11,100 | $11,600 | -3.4% |
| Oxford | $21,600 | $21,400 | 0.6% |
| Consolidated | $32,700 | $33,000 | -0.8% |
Gross margin by segment
| Q3 2017 | Q3 2016 | |
| Apex | 30.1% | 30.3% |
| Oxford | 41.8% | 40.7% |
Average bill rates
| Q3 2017 | Q3 2016 | |
| Apex | $58.16 | $56.46 |
| Oxford | $100.78 | $101.60 |
| Consolidated | $63.49 | $62.45 |
Guidance
On Assignment forecast fourth-quarter revenue of between $658.0 million to $668.0 million, a year-over-year increase of between 6.0% and 7.6%.
Share price and market cap
Shares in On Assignment rose 5.19% in early afternoon trading today to $59.00. The company had a market cap of $3.12 billion.