ASGN Inc.'s stock plummeted 5.38% in the pre-market trading session on Thursday, following the release of the company's Q4 2024 earnings results. The stock experienced a significant decline after reporting a year-over-year decrease in revenue for both its Commercial and Federal Government segments.
The primary reasons for the stock's plunge were the disappointing revenue figures and concerns over the company's Federal Government Segment. ASGN Inc. reported a revenue decrease of 8.3% year-over-year in Q4, with the Commercial Segment revenue falling by 7.5% and the Federal Government Segment revenue declining by 10.2%. The decline in the Federal Government Segment was attributed to delays in certain research and development projects and the impact of the new administration's spending initiatives on federal contracts.
Despite the revenue decline, ASGN Inc. reported an increase in gross margin and adjusted EBITDA margin. The company also announced the acquisition of TopBloc, a Workday Services Partner, for $340 million, which is expected to enhance its ERP capabilities and contribute to revenue growth. However, investors remained concerned about the company's ability to navigate the challenging environment and meet its Q1 2025 revenue and earnings guidance.
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