IT services provider ASGN (NYSE: ASGN) met Wall Street’s revenue expectations in Q1 CY2026, but sales were flat year on year at $968.3 million. On the other hand, next quarter’s revenue guidance of $985 million was less impressive, coming in 3.8% below analysts’ estimates. Its non-GAAP profit of $0.69 per share was 29.6% below analysts’ consensus estimates.

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Company Overview

Evolving from its roots in IT staffing to become a high-end technology consulting powerhouse, ASGN (NYSE: ASGN) provides specialized IT consulting services and staffing solutions to Fortune 1000 companies and U.S. federal government agencies.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $3.98 billion in revenue over the past 12 months, ASGN is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. To accelerate sales, ASGN likely needs to optimize its pricing or lean into new offerings and international expansion.

As you can see below, ASGN’s 2.4% annualized revenue growth over the last five years was sluggish. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. ASGN’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.6% annually.

This quarter, ASGN’s $968.3 million of revenue was flat year on year and in line with Wall Street’s estimates. Company management is currently guiding for a 3.5% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 2.4% over the next 12 months. Although this projection indicates its newer products and services will spur better top-line performance, it is still below the sector average.

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Adjusted Operating Margin

ASGN was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 9.7% was weak for a business services business.

Analyzing the trend in its profitability, ASGN’s adjusted operating margin decreased by 3.6 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. ASGN’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, ASGN generated an adjusted operating margin profit margin of 2.9%, down 4.7 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for ASGN, its EPS declined by 2.5% annually over the last five years while its revenue grew by 2.4%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Diving into the nuances of ASGN’s earnings can give us a better understanding of its performance. As we mentioned earlier, ASGN’s adjusted operating margin declined by 3.6 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For ASGN, its two-year annual EPS declines of 14.3% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q1, ASGN reported adjusted EPS of $0.69, down from $0.92 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects ASGN’s full-year EPS of $4.32 to grow 19.7%.

Key Takeaways from ASGN’s Q1 Results

We struggled to find many positives in these results. Its revenue guidance for next quarter missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 24.3% to $30.59 immediately following the results.

ASGN’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).