Hello, and welcome to the ASGN Incorporated second quarter 2021 earnings call and webcast. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Kimberly Esterkin, Managing Director at Addo Investor Relations. Please go ahead, Kimberly. Thank you, Operator. Good afternoon, and thank you for joining us today for ASGN second quarter 2021 conference call. With me are Ted Hanson, President and Chief Executive Officer; Rand Blazer, President of APEX Systems; George Wilson, President of ECS; and Ed Pierce, Chief Financial Officer. Before we get started, I would like to remind everyone that our commentary contains forward-looking statements. Although we believe these statements are reasonable, they are subject to risks and uncertainties, and as such, our actual results could differ materially from those statements. Certain of these risks and uncertainties are described in today's press release and in our SEC filings. We do not assume any obligation to update statements made on this call. For your convenience, our prepared remarks and supplemental materials can be found in the Investor Relations section of our website at investors.asgn.com. Please also note that on this call, we will be referencing certain non-GAAP measures, such as adjusted EBITDA, adjusted net income, and free cash flow. These non-GAAP measures are intended to supplement the comparable GAAP measures. Reconciliations between the GAAP and non-GAAP measures are included in today's press release. I will now turn the call over to Ted Hanson, President and Chief Executive Officer. Thank you, Kimberly, and thank you for joining ASGN's second quarter 2021 earnings call. ASGN reported very strong results for the second quarter, and I'm pleased to report that all is progressing as planned from both a client demand and company execution standpoint. The market is strong, the demand for our services is growing, and ASGN is capturing our share of the market and more. Were it not for the incredible performance of all our employees serving our clients and contributing to key initiatives and acquisitions, we would not be able to post such strong results. As you recall, at the beginning of July, we announced that we will now be reporting two business segments: the commercial segment, which includes APEX Systems, Creative Circle, and CyberCoders, and the federal government segment, our ECS business. On today's call, I will speak to these two segments, which represent our continuing operations. Ed Pierce, our CFO, will discuss Oxford, or discontinued operations, in conjunction with the overall financial results and Q3 guidance later in today's call. Revenues for the second quarter for continuing operations total $974.9 million, up 17.2% year-over-year and above the high end of our revised guidance range set forth in our announcement regarding the divestiture of our Oxford business. Adjusted EBITDA of $119.3 million also came in above the top of our revised guidance range for the second quarter, improving 25.2% from the prior year period. The commercial segment accounted for $712.5 million, or 73.1% of our consolidated revenues, while the federal government segment accounted for $262.4 million, or 26.9% of our consolidated revenues. The growth of our consulting business continues to be a big driver of the commercial segment's stellar performance. Both realized consulting revenues and our pipeline of consulting business are firing on all cylinders. Our federal government business was also up 9.5% in the second quarter, performing in line with our expectations. In addition to strong revenue and EBITDA, our free cash flow generation remained solid and totaled $72.3 million for the second quarter. Our free cash flow generation supports investments in our organic growth, M&A, and share repurchases. We view our current stock price as attractive, and with the announcement of the Oxford sale behind us, we are back in the market buying stock. Following the announcement of the Oxford divestiture, we have deployed approximately $35 million to repurchase common shares and have $215 million remaining under our $250 million share repurchase plan. Share repurchases do not preclude us from being active on the M&A front. Our ample cash on hand, along with our borrowing capacity, enable us to continue to make acquisitions. While we would consider taking on additional leverage if needed, we are well-positioned with our current balance sheet to continue to be acquisitive without taking on additional debt. The divestiture of Oxford will also free up capital. Our acquisition strategy is succeeding. Since the beginning of 2019, we have acquired eight companies with an aggregate annual revenue run rate of approximately $375 million. As a result of the contribution from acquisitions and the high organic growth of our underlying business, we expect we will report record revenues for Q3 2021. This is particularly noteworthy considering historical results included revenues from the Oxford business, which is now presented as discontinued operations. It's not just the intrinsic value of these standalone businesses that contributes to their acquisition multiples. It's also the expected revenue synergies and higher margins we can achieve when combining their capabilities with that of our own. With that said, let's turn to more detail on our segment performance for the second quarter, beginning with our largest segment, commercial, which services large enterprises and Fortune 500 companies across multiple industry verticals. For the second quarter of 2021, the commercial segment generated revenue of $712.5 million, up 20.3% year-over-year and up 19.3% organically. Growth across our consulting business, CyberCoders, and Creative Circle contributed to this increase in revenue. The commercial segment grew not just year-over-year and sequentially, but also grew high single digits as compared to the second quarter of 2019. APEX Systems' revenues improved 16.6% over the prior year period, while Creative Circle and CyberCoders grew 39.4% and 58.9% year-over-year, respectively. Each of these operating units reported their fourth straight quarter of sequential growth. From an industry perspective, all five commercial industry verticals experienced growth during the quarter, with all the government and business services industry accounts achieving double-digit growth on a year-over-year basis. Commercial and industrial accounts were up double digits, both year-over-year and sequentially, due to the continued strength of consumer staples, e-commerce, and utilities, as well as significant improvement in retail, energy, hospitality, and transportation. Our technology and telecommunications, or TMT, vertical was up double digits year-over-year. Within the vertical, technology accounts saw significant growth over Q2 2020, while telecommunications accounts were flat year-over-year. Government and business services was up mid-single digits, with aerospace and defense and government accounts flat over the second quarter of 2020, while business services accounts were up year-over-year. Financial services accounts were up double digits, with growth in regional banks, wealth management, and fintech accounts. Both top accounts and retail and branch accounts achieved double-digit growth rates for Q2. From an industry perspective, top account revenue at APEX Systems was up in all five industry verticals we target, while Creative Circle posted positive growth across their top accounts in Q2 2021. Gross margins for the commercial segment were 32%, up 100 basis points from the prior year due to increased business in Creative Circle and CyberCoders units, along with the higher bill rates associated with our commercial consulting business. EBITDA margins were also up due to the growth in gross margins, as mentioned above, along with higher productivity in our workforce. Importantly, EBITDA margins were up compared to Q2 2019, which is reflective of a more typical performance year. We also continued to grow our commercial consulting revenues during the quarter. Consulting revenues totaled $144.4 million for the second quarter, a significant increase of 69.3% year-over-year, of which 61.8% represents organic growth. Our pipeline of consulting business continues to grow at high double-digit rates and is trending positively in the Third Quarter. This growth in our consulting business resulted from a combination of factors, including broad-based industry demand, acquisitions of businesses that have bolstered our technical muscle and domain expertise, and the success of our Mexican delivery center. Since the onset of the global pandemic, client demand for nearshore capabilities has resulted in a doubling in size of our Mexican delivery center. The success of these nearshore capabilities is an excellent example of how we have been able to spread the strength of one of our acquisitions, in this case, Intersys, across our entire commercial book of business. Speaking of acquisitions, at the end of the second quarter, we welcomed the emFOURity business unit, a modern enterprise solutions integrator, to the commercial segment, strengthening our consulting capabilities and offerings in the healthcare and consumer and industrial sectors. The emFOURity business unit's roughly 240 employees add to our growing portfolio of capabilities for our healthcare and manufacturing clients in the U.S. and in Europe, including new and enhanced advisory and managed service offerings. ASGN remains at the forefront of digital transformation, and we expect significant opportunities for the emFOURity team as legacy users of their enterprise solution, particularly in the healthcare space, upgrade to the cloud. As we strengthen our consulting capabilities, our revenues continue to accelerate. We see an increasing amount of work in digital innovation and modern enterprise solutions across cloud, data, and analytics in digital business transformation engagements, enabling us to implement many of the elements of our clients' individual digital roadmaps. Working agile and DevOps, in particular, is a large component of our support as our clients tie together applications in their cloud environment and strengthen their customer support with real-time data updates. Our ability to build dashboards and software interfaces to propel the customer experience and internal management of the business operations have been key drivers of our revenues. We are very pleased with the recovery we have seen in our commercial business, which is representative of our commitment to service our accounts, build a diversified set of customers, and bring value to every piece of work assigned. Now let's turn to the federal government segment, which provides mission-critical solutions to the Department of Defense, intelligence agencies, and other civilian agencies. Revenues for the federal government segment totaled $262.4 million for the second quarter, up 9.5% year-over-year. Growth in the federal government segment was primarily due to the continued high demand for artificial intelligence and machine learning services and the impact of recent acquisitions, including both ISM and SCYRUS. The federal government segment's new business pipeline also remained strong, with approximately $304 million in new business awarded during the second quarter and a book-to-bill ratio of 1.2 to 1. Contract backlog totaled $2.7 billion at the end of the second quarter, or a healthy coverage ratio of 2.5 times the segment's trailing 12-month revenues. During the quarter, we were awarded a three-year award from the Army Resource Laboratory to work in the development, fielding, and sustainment of artificial intelligence solutions for the Department of Defense. This award introduces several new mission areas and focuses on enhancing the DOD's development pipelines and data feeds. We were also awarded a contract from the DOD Combatant Command to support data and analytics activities in intelligence operations. Similar to the commercial segment, we remain acquisitive in the federal government space and will continue to be going forward. Just post the end of the second quarter, we announced the acquisition of Intersoft, a leading cybersecurity and digital transformation solutions provider to the federal government. Intersoft's team of 220 highly skilled consultants deepens ASGN's footprint with key customers, including the Air Force, Defense Information Systems Agency, Army Intelligence, and other defense agencies. The acquisition of Intersoft is another example of our long-term capital deployment strategy to acquire high-growth consulting businesses that position ASGN as an industry-leading provider of IT services and solutions. Before speaking further about our acquisition strategy, I will now turn the call over to Ed Pierce, our CFO, to discuss the second quarter financial results and our Third Quarter guidance. Ed? Thanks, Ted. Good afternoon, everyone. Before commenting on our financial performance for the quarter, I'll first make a few comments on the cha nges in our financial reporting since last quarter. As most of you are aware, we announced earlier this month that we had entered into an agreement to sell our Oxford business for $525 million, which equates to estimated proceeds net of income taxes of approximately $415 million. As a result of the decision to divest, Oxford results for that business are no longer included in continuing operations but reported as discontinued operations. This pertains not only to current and future periods but also to our historical periods. Consequently, we have revised our historical financial results to report Oxford business as discontinued operations. The revised historical results are included in our supplemental earnings materials that can be found on our website. We've also changed our segment reporting to remove Oxford as a separate segment and have combined the CyberCoders division with APEX segment, which we have renamed the commercial segment. The ECS segment has been renamed the federal government segment. As Ted commented, our financial performance was well above our initial guidance estimates for the quarter and above the high end of our recently updated guidance. These results reflected the double-digit growth of our commercial segment and the solid growth in our federal government segment. For the quarter, revenues from continuing operations, which, as I mentioned earlier, do not include the Oxford business, were $974.9 million, up 17.2% over Q2 of last year and up 7.5% over Q1 of this year. Net income and adjusted EBITDA for the quarter were both up year-over-year and sequentially and grew at a higher rate than revenues. Our adjusted EBITDA margin of 12.2% was 70 basis points up from Q2 of last year, reflecting, among other things, the improvement in our business mix and expansion in gross margin of our commercial segment. Revenues from our commercial segment were $712.5 million, up 20.3% year-over-year. For the fourth straight quarter, all commercial divisions were up both year-over-year and sequentially. Revenues from our federal government segment were $262.4 million, up 9.5% year-over-year and in line with our guidance estimates. This growth was driven by a number of factors, including increased volume on certain existing programs, new contract awards, and the contribution from acquired businesses. Gross margin of 28.3% was at the high end of our updated guidance estimates and up approximately one percentage point year-over-year, driven by the double-digit growth of our high-margin commercial consulting, creative marketing, and placement services. SG&A expenses were $176.4 million and slightly above our updated guidance estimates because of acquisition-related expenses of $2.6 million. Consistent with past practice, we do not include acquisition-related expenses in our guidance estimates. The year-over-year increase in SG&A expenses related to the high year-over-year growth in the business, the increase in headcount to support future growth, and higher incentive compensation than healthcare expenses, which were both down in 2020 from historical levels. Income from continuing operations was $57.3 million, up 31.7% year-over-year. Adjusted EBITDA was up year-over-year, and our adjusted EBITDA margin of 12.2% was above our updated guidance estimates and up 70 basis points over Q2 of last year. Free cash flow from continuing operations was $72.3 million for the quarter and $179.1 million for the first half of 2021. The conversion rate of adjusted EBITDA into free cash flow for the quarter was above 60%, which is in line with historical conversion levels. At quarter-end, cash and cash equivalents were $375.4 million. There were no outstanding borrowings under our $250 million revolving credit facility. Our senior secured debt leverage ratio was 1.17 to 1. Our financial estimates for the Third Quarter are set forth in our earnings release and supplemental materials. For the Third Quarter of 2021, we estimate revenues of $1,035 million-$1,055 million, income from continuing operations of $56.8 million-$60.5 million, and adjusted EBITDA of $120-$125 million. We're estimating all divisions will be up both year-over-year and sequentially. At the midpoint of our estimates, our implied revenue growth rate is approximately 15.5% over Q3 of last year. We estimate income from discontinued operations will range from $155-$165 million, virtually all of which relates to the after-tax gain on the sale of the Oxford business. Our SG&A expenses include sequential increases for headcount to support expected growth in the commercial business, as well as increases in other expenses that were curtailed due to COVID-19. Thank you for your time. I'll turn the call back over to Ted for some closing remarks. Ted? Thanks, Ted. These are exciting times at ASGN, and I do not envision us slowing down anytime soon. Since the start of 2020, more than 2-thirds of which took place during a global pandemic, we have successfully acquired 6 companies and made the strategic decision to sell our Oxford business, freeing up capital and management bandwidth to focus sharply on building a high-growth, high-margin, diversified IT services and solutions business in the commercial and government markets. Case in point, our consulting business, including both commercial consulting and ECS, totaled $406.7 million, or approximately 41.7% of consolidated revenues for the second quarter. Our acquisition strategy, which has contributed to this evolution of our business toward higher margin, high growth, high-value work, is succeeding, and we have positioned ourselves to think even bigger. Still, we remain measured when it comes to M&A, and in doing so, follow a three-pronged approach to acquisitions. I'd like to discuss this approach today. The first prong of our three-part acquisition strategy is making strategic tuck-in acquisitions of companies sub-$100 million in annual revenues with accretive growth rates and EBITDA margins that provide us with new capabilities, new solutions, and/or new contracts in high demand by our customers. Each of the six acquisitions we completed since the beginning of 2020 are examples of this strategy in action. As I mentioned earlier, it's not just the intrinsic value of the standalone businesses we acquire that add value to our company. It's also the expected revenue synergies we can achieve by leveraging their capabilities across the breadth of our portfolios. The tuck-in acquisitions we have made to date are anticipated to generate higher growth rates and higher cash flow than what is now classified as our discontinued operations. In addition, given the strength of our balance sheet and the near completion of our Oxford sale, we are developing strategic tuck-in opportunities at a larger scale than greater than $100 million in revenue. Like the first prong of our strategy, acquisitions completed as part of the second prong of our strategy would be accretive to growth rates and margins and also add new contracts, new solutions, or new capabilities to our commercial and federal government segments. Finally, taking our strategy 1 step further, the 3rd prong of our approach to M&A is to acquire standalone businesses that fit under the ASGN umbrella with adjacencies in IT services and solutions but that are not in conflict with our current offerings and which can generate revenue synergies that help fulfill our long-term growth strategy. An example would be our acquisition of ECS in 2018, a business which is now growing to over a billion dollars in annual revenues much quicker than our initial expectations. We continue to make ground on our strategic growth path, and everything we have done in the past 90 days further supports our mission to be a leading provider of IT services and solutions to the commercial and government markets. With the strong resurgence of our commercial business and the stability and growth of our federal government business, we are confident that we have now taken the appropriate actions to position ASGN for long-term sustainable growth in the markets we serve. Following the completion of multiple acquisitions, the divestiture of Oxford, and the resegmentation of our business into the commercial and federal government segments, we believe now is an ideal time to reset expectations and share with the investment community an update on our long-term vision, strategy, and goals. With that said, we look forward to hosting a virtual analyst day this September 14. Additional details on this analyst day will be announced over the coming weeks. Thank you again for your time this afternoon. This concludes our prepared remarks for today. On behalf of our entire company and board of directors, we appreciate your continued support of ASGN. We will now open up the call to your questions. Operator? Thank you. We'll now be conducting a question-and-answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment, please. I'll be pulled for questions. Our first question today is coming from Maggie Nolan from William Blair. Your line is now live. Thank you. Congrats on all the strategic changes here and the good performance this quarter. I had a high-level question. With the sale of Oxford, you've kind of moved away from some of the kind of high-end niche services for the small and mid-market accounts. In the past, you've talked about this focus on increasing penetration at large accounts on the commercial side. Can you talk us through how you're assessing high-potential accounts? Are there any details that you can share with us that illustrate how penetration at key accounts has trended? Maggie, first of all, thanks for the question, and I'll let Rand kind of jump in with me here. Really, Oxford had become—well, it had an IT competitive business. It also had a lot of other things: engineering, life sciences, healthcare, areas where we didn't really practice. As you noted, they really were serving the middle market and smaller accounts and providing these services. We believe in large accounts, enterprise accounts, both in commercial and gov, because they're the largest vendors on IT. We thought it would be in our best interest to stay more focused on those large accounts and providing higher-end IT services than it would be to invest capital in some of the areas that Oxford was practicing. Oxford has a great business. They'll go off and do really good things. I think that our comfort level here is kind of staying with this strategy about being more IT-focused, coming up the pyramid, and providing more value, and doing that with large accounts. By way of example, you've seen that here this quarter with the great growth rates in consulting services, which is really about our commercial Fortune 500 accounts pulling us in to do higher-value work and more because that's where the bulk of the spend is. Rand, would you add anything to that? No, I think that's good. Maggie, we grow our top accounts; they're growing at a high teens rate. Our penetration of those top accounts across all five industries that we report are increasing, as Ted mentioned. We look not only at how many top accounts we have and are we expanding the portfolio and deepening the relationship, but are we growing consulting work with that account base as well? All those numbers are pointing upwards, and that's what we want. Okay. Great. You highlighted the delivery center in Mexico again, and that's obviously been a successful area for the company. I'm curious, what are your future plans for your geographic delivery footprint in the consulting business on a go-forward basis and just considering kind of the current IT talent environment? Rand? I'll start. Maggie, I think, look, we're very focused on our account base. When our account base has a requirement, we want to step up to it. What we've seen is, as we've mentioned in the remarks, a high degree of DevOps work, particularly around cloud, cloud applications, integration of systems, dashboards. We use the Mexican Development Center for a lot of that DevOps work. It's just been very timely that we acquired that a couple of years ago and was right there now as we're seeing a crescendo in that kind of work. We want to continue to expand our footprint in Mexico. We found that to be a good base for us, but servicing US accounts, okay? We are very focused on US accounts. If US accounts take us somewhere else geographically, based on the strategic importance of that account, we will step up and support them. We have done that. We do some of our work with some of our biggest accounts overseas. It is more what I would say is specific to the account and specific to their initiatives, their global initiatives. We are not trying to, I think, globalize our consulting practice, at least not at this point. Ted, you want to add to that? Yeah. I think that was well put. I would just say that maybe finish with Maggie. I mean, obviously, these large accounts have had captive workforces in India in different ways offshore for a long time. A lot of the benefit they find from near-shore work here, which is great talent, same time zone, good communication, good collaboration back and forth real-time, has been a great winner here. I think to Rand's point, I think in the prepared remarks, we've doubled that workforce, and we're going to continue to invest in it because there's a great labor pool there, and this is a real winning offering, if you will, with our client base. Definitely a very hot market. Good to hear. Thanks for all the commentary, Ted and Rand. Congrats. Thanks. Thank you. Next question is coming from Gary Bisbee from Bank of America Securities. Your line is now live. Hey, guys. Good afternoon. I guess the first one, I just have to ask, help us understand the consulting growth, right? You had more than 35 percentage points the year-over-year growth. The comp was maybe 10 points easier. A lot of that had nothing to do with it. I think sequentially, it was up more than 20%. I do not think there was incrementally a lot more M&A than last quarter because the most recent deal is more Q3. What drove such a big step up, and how do we think about trajectory the next couple of quarters given that step up? Gary, I'll set the table here and then turn it over to Rand. About the same contribution in revenues from acquisitions in the second quarter as there was in the first in the commercial segment, if you will. Remember, the strategy here is not a new service to a new account. This is pulling together. This is pulling higher-end consultative services across our existing account portfolio where we already have years and decades of client relationships, the ability to walk the hall and do business, and we have the client pulling us into these things. The table is set, if you will, for this to really work in terms of revenue synergies. Rand, where's it coming from? Rand, are you on mute? Oh, yeah. I'm sorry. Gary, let me comment also that our performance in this past quarter is not only strong year-over-year, but also we've lapped 2019. Not many companies report against performance in 2019, but we have lapped it. We're doing better. We're growing high single digits against 2019 in the commercial sector. That's a good mark. How are we doing it? I think Ted keynoted it. Look, I think we have a diversified set of very strong accounts that we have very intimate knowledge and awareness of their operating worlds, what their competitive factors are. We have built a strong solution base in some of the key areas like DevOps, cloud, data analysis, and now some enterprise solutions, not just organically growing these solution capabilities, but also made some, I think, pretty good acquisitions over the last couple of years through Intersys, through LeapFrog, and now through the in-four business of AVAP. Third, we have the ability to staff these engagements. That is where the strength of a staffing firm coupled with a consulting business really makes a difference. The fact that we not only have strong accounts and strong solutions, but we have the ability to step up and staff these engagements, I think, is all helping us as we grow here. It is a good formula. It is working well. As Ted said, we are trying to continue to penetrate this work with our existing staff. It is those account relationships and the insights we have that put us in good position. It is a matter of stepping up and executing the work. Great. Just follow up on the more traditional assignment business. Ted, if I heard the growth rates you gave for APEX, Creative Circle, and CyberCoders, they were all faster than the 12% year-over-year that business grew. What am I missing? Were those not year-over-year growth rates? What color can you give us on that business? Ed, can you address that one on the assignment growth rates? Well, Ted, I can. You want me to make a comment real quickly? I think our overall growth rate in the commercial sector is 20.3%, consulting up 59.5%, and the staffing component up a low double-digit number. All of that, those two coupled together give us a 20.3% growth rate. Did that answer your question, Gary? I thought I heard APEX up 16, Creative Circle up 39, and CyberCoders up 59. Maybe APEX includes the consulting in that so that assignment is a lot lower? Yeah. That That did. Yeah. The APEX has both numbers in it. Okay. All right. I guess what's going on, that then I think implies either still a decline or much slower growth in sort of traditional assignment engagements at APEX. Is that right? If so, is that by design or any color there to help think through that traditional? I mean, I would say it's more consistent, Gary. I mean, based on what we can track, it's better by a few points than the SA published numbers. We've been getting kind of pre-COVID kind of high single-digit growth rates, if you will, on the staffing part of the business. Now, the way we report this so that you get a flavor of assignment for Creative Circle, CyberCoders, and APEX Systems, you can still that number, like Rand said, is 12% here. I think that's fairly consistent. Look, we're going after the whole market, Gary. We're not predicating one over the other. We're in all of the programs from an IT staffing standpoint of these large enterprise accounts. We're also in their consulting programs, right? If they bundle it, we obviously have access to both. We're flying at all this. We're not cherry-picking one over the other. That's really what's going to make a difference here because, I mean, look, we've got kind of a favorite spot where the number two player in that US IT staffing marketplace, and it enables what we're doing in consulting. The two kind of work together in harmony like that. Okay. All right. Fair enough. Thanks. Thank you. Next question today is coming from Toby Summer from Truist Securities. Your line is now live. Thanks. I was curious about your M&A strategy, and I wondered if we could delve into it a little bit. Is the 3rd prong, sort of the larger opportunities, could those represent a new reporting segment for the company? Maybe if you could talk to your comfort level in terms of leverage, particularly in light of that third prong. Thanks. Yeah. They could be larger. They often are. Although I would say if there was something that was different that supported itself in the marketplace and was not in conflict with our federal government or our commercial, it could stand alone even as a smaller. It is a little about revenue size, but not as much. Whether it is its own reporting segment, I mean, that is a technical question. That would be Ed Pierce's call as we go here. I mean, I think what we are trying to do is find the right acquisitions to serve the market. Then, Toby, the last part of your question? Comfort on leverage because if you do something sizable. Yeah. Yeah. Right. Look, I think five times in the past have levered up to about 3.8 times total debt to EBITDA. Quickly, within kind of 18 to 24 months, have been able to bring that back down to 2.5 or below total leverage because of the great free cash flow characteristics of these businesses. We, again, would be comfortable doing that. I would tell you, I do not think it is required because this is a unique position for us. In the past, we never have been sitting here with $375 million on the balance sheet and then a divestiture which is going to add net another $400 million. We are going to have about $800 million-$900 million on the balance sheet here as we go forward. I just don't believe it's going to take that kind of leverage in order to get done the things that we're looking at. If it did, we would be totally comfortable with it. Okay. On the federal side, could you talk about what the relevant growth rate might be by your estimation in spending on AI and machine learning, sort of the relevant veins of spending that are sort of pertinent to your federal business? We often find that investors struggle with looking at a headline budget and then parsing out a company's revenue mix and exposure to what the spending levels that are sort of most pertinent are. Yeah. I'd tell you, Toby, that might be best held for the investor day. I mean, we're going to give some more insights on the marketplace as we see it. George, if you had something at the tip of your fingers, I mean, we'd certainly feel fine giving that to you, Toby. George, I mean, anything top of mind on that? Yeah. Thank you, Toby, for the question. The only thing that I would add is that we really do believe that we are in the fast currents of the budget with our cyber, particularly our cyber solutions and analytics, and then also in the AI. Those are areas that we're focusing on with all of our acquisitions as well as with our centers of excellence. That's where we'll continue to focus. We feel very confident about the spend in those areas. Yeah. Spend is growing there, Toby. We'll do our best to give you a kind of size of the market when we get to the investor day here in just a matter of weeks. Great. We'll call that a teaser. Curious on the consulting capability and the evolution of ASGN relative to sort of the rest of the market. Do you feel like you're leading the drive to add consulting services? Or are a lot of players doing this? I'm curious about whether you think having consulting capabi lity of scale besides traditional assignment capability is just going to kind of be table stakes for the largest IT solutions players in a couple of years. Right. Good question. I mean, Rand and I would definitely tell you that we believe we are a first mover here. When we got into this, we decided two things: don't build a separate business, have an integrated strategy with the IT staffing. The second part of this was to not do it off the side of our desk. We built a framework out that included people from the consulting world who knew how to risk manage, how to scope, frame, bid, put together engagements, manage them to successful completions. We put the systems in place to do that. We kind of got off on the right foot, if you will. We do see others trying to do this. I'd call more off the side of their desk or dress up a staffing service as consulting but don't really have strong technical muscle, capabilities, and ability to do all the things that I've said. Some of the bigger players will be able to do this, and the others will play in the IT staffing market, which is a good market. Yeah, I think that, I mean, we're going to benefit surely from the way that we've done this and from being a first mover there. Ultimately, it's these accounts. I mean, that's what really matters. I mean, account relationships in this area are everything. As I mentioned before, we've had them for years and decades. We have a certain trust there and clients willing for us to take on this additional responsibility and step up and help them get to certain solutions. That's the real key here. Thanks. Last question for me. Could you give us your outlook for bill rate growth, I guess, particularly in the commercial side with all this news and some data around inflation? I'm curious what your perspective is. Yeah. I think it will. It's not a new part of this market, Toby. I mean, I would not point you to a certain number, but I would say inflation and wage rates and bill rates for our technical resources have been going up for years and years and will continue to go up. We typically would see that in our data on a year-to-year basis. I know there is a lot of talk right now about inflation. Certainly, we are seeing inflation in wage rates and bill rates. I would not say it is out of the norm. I would point you to one thing, which is one of the things that you can see in our margin profile the way it is reported, that not only are we able to raise bill rates appropriately, but we are able to widen the spread between the pay and the bill margin. That's kind of been a highlight within the gross margin area over a long period of time for us, but certainly in the last year. Thank you very much. Thank you. Next question today is coming from Jeff Silber from BMO Capital Markets. Your line is now live. Thanks so much. Just a follow-up to the last question. We've obviously been reading and hearing about labor supply issues. Beyond just the wage inflation aspect of it, are you finding it tougher to find people both in terms of external resources for your clients and also internally? Rand, do you want to take that one? Jeff, I don't want to be flip, but we're the number two US IT staffing business. This is our profession. This is what we do very well. I think some of it is, Jeff, it's not that it's been tough for a long time. I mean, the IT employment levels have been very, very high for a long time. As IT spending in corporate America continues to increase, I think it's a matter of forecasting the demand. It's a matter of building a pipeline of candidates. It's building specialized recruiting teams that know those skills and know where to find the people in them. It's having a database of people that have worked with us in the past and work with us today. I mean, there's a lot of elements that go into this: building CE community, the contract employee community, so that we have some brand loyalty. I mean, there's a lot of things that make this work for us. It's not that it's easy. It's not. It just takes diligence and staying with it and staying ahead of it. Does that answer your question, Jeff? Yeah. That's actually very helpful. In terms of my second question, I want to shift over to the acquisition market. Obviously, the company's been acquisitive for a while, but as you mentioned, there's a lot of other companies doing the same thing. Can you tell us what acquisition multiples are trending these days and how it compares to before the pandemic? Yeah. I mean, look, we've been very fortunate here, Jeff. We've been able to get acquisitions done at or sometimes even below our own multiple. I don't think that's the ultimate judgment here. I mean, we would be willing to pay more in multiple for the right business if it were really going to add the economic value that we believe it could. Because remember, these are higher growth, higher margin businesses with providing higher value services to the customer. Even if we were to stray and to pay more than even our own multiple, I mean, there's a real return in that for us. Multiples for companies billed as digital transformation are certainly stratospheric right now. We are getting really good consultative capabilities for reasonable multiples around our own or a little bit below that really are adding value to the work that we're providing for our customer base. That's really the secret sauce here. All right. Really appreciate the caller. Thanks so much. Thank you. Next question is coming from Mr. Henderson from Jefferies' line. He's now live. Good afternoon. Just a follow-up question on kind of the delivery strategy for the commercial segment, and more specifically the consulting part. Can you talk a little bit about the mix, I guess, in terms of the delivery of the use of contract staff versus kind of full-time employees? As As I kind of think about your bringing on through acquisitions, you're adding to those capabilities. How does that mix change? Where do you see that over time? Does it make more sense to get to a ratio where there's maybe more full-time staff versus contract staff? Yeah. That's a good question. Rand, do you want to take that one? Yeah. Surinder, I would say we're going to watch this as we go. First of all, our consulting leadership, including myself, I don't really know, but we have a 25-30 year history in running consulting businesses before we ever got here. I do believe in the model of blending contingent labor with our own internal team. I would say it will increase a bit as it already has increased over the past couple of years as we've made the acquisitions. We do have more talent now. And we can put that talent to work on these engagements. We certainly want the leadership on these engagements to come from internally. We want our solutions, SMEs, to be in tune and part of our framing and architecting our solutions. A lot of the arms and legs can be done with contingent labor, as well as sometimes we bring in people that have had and done the work before in the same industry many times. I think a blend is the right answer. When I was running KPMG Consulting, I would have done this. I didn't know enough back in the 1990s to do this like we're doing today. It really works. I'd say it's a blend. Depending on the engagement, it might be a little heavier internal versus contingent, and in some cases, more contingent. Certainly, as we get into the modern enterprise solution and some of the digital transformation, we have to have the leads on this work. That requires us to have enough bench to satisfy that and the growing demand. That's helpful. A question related to there was some good color on the demand from some of the larger clients and penetration and stuff. Is there any meaningful amount of work that you guys do with perhaps the larger consulting firms in a subcontracting capacity, or is that just a really small part of the business? How should we think about some of those relationships that may have existed historically? Yeah. Yeah. We haven't had to become a subcontractor to the big guys, if you will, in our client base. For the most part, the clients are getting smarter and smarter, and give them a lot of credit. CIOs today are beginning to apportion work depending on the nature of the work and who's best equipped to do it and contracting with the different teams and blending their teams together. We have not pursued a path of being a subcontractor to the big guys. Whether we do that in the future, there's always alliance relationships, particularly with software vendors. I don't see that on the near horizon, Surinder. I don't think that's exactly what the CIO is looking for anymore. I think they have the ability to blend the teams and build out the work based on the expertise and competence of different consultants. Got it. That's helpful. Just kind of a final question in terms of the question I asked earlier about valuation. As you kind of think about the firms that you're looking at that are kind of the below $100 million versus those that are above $100 million in revenues, is scale an issue in terms of the valuations and stuff? How do you think about the balance there that you see? At least what are you guys seeing in the private marketplace? I think sometimes, Surinder, you could see lower valuation multiples for businesses that have less scale because maybe—and we've seen this—maybe they have great technical chops, but just aren't able to develop the work or have the account portfolio that we do, right? On the flip side, if you have a business that has greater scale and has been able to kind of crack that nut on both sides, then maybe they command a higher multiple. I would go back and say, I mean, for us, we're willing to pay a multiple, whatever that multiple is, as we judge it out, to bring a business in and deploy it against our strategy here in consulting services in the commercial marketplace. If we are paying a higher multiple, we're going to be getting something for that, which is their own accounts, greater growth rates, larger, more comprehensive digital transformation capabilities, or industry expertise, not just against one industry but multiple industries. That's helpful. Thank you. Congratulations on a great quarter. Thank you. Thank you. Next question today is coming from Mark Marcon from Robert W. Baird. He's now live. Hey, good afternoon. Wondering if you could talk a little bit about both CyberCoders and Creative Circle. You've had four quarters of growth sequentially, very strong year-over-year growth. Where do those kind of sit now relative to pre-COVID levels? Rand, do you want to take that one? Yeah. If you benchmark them against Q2 of 2019, Mark, they're both just slightly negative to that date. So they've almost caught themselves pre-COVID, okay? Both CyberCoders and Creative Circle. I'd say Creative Circle, the sequential growth, I guess Mark I'll add this, has really been on a great path. They have adopted some key mechanics in the way they do their business in the markets they focus on. They're following some of the same script that APEX Systems is in terms of large account portfolio and blending that. They've broadened their solution base. They've really got a top-notch management team that has done a heck of a job over the last two years going through all this. They're definitely on that path. I'd say the same for CyberCoders. They definitely have caught themselves and now are on a really good path. That's great to hear. I mean, how big do you think Creative Circle could get now that they're on that path? I don't think we forecast a number, but they should certainly get to a stronger position than they were pre-COVID. They were really focused on a narrower set of solutions, Mark, and a narrower set of accounts, and particularly heavily emphasized the ad agency and creative events kind of work. A lot of that work shriveled up even before COVID, but certainly during COVID. We've had to broaden things out. I expect now we have a better structure and a stronger management team that can take it beyond where it was pre-COVID. That's great. How do the gross margins in Creative Circle compare to where they used to be historically? Ted, should I keep going? I think they're just a hair below, not much difference, but they are a little hair below. Most of that's driven because of the large account mix in their portfolio, but not at all like APEX. APEX, I think, has a different set of services in the sense of IT services where their creative team is more creative and creative marketing and digital around the marketing function. They enjoy, I think, higher margins, different kind of treatment in the client environment. Their margins have really, gross margins have held really pretty well, very little deterioration over the years. Are they above the commercial average? They are. They are, They are, Mark. Yes. Okay. Great. And then on APEX Systems, the 16.6% growth, how much of that was organic? 15.3% was organic. Great. That's terrific. And then with regards to federal government, it looks like the book-to-bill improved. What's the outlook there just in terms of upcoming contracts and renewals and how we should think about that? How confident are you with regards to the pace potentially accelerating or decelerating? Yeah. Look, Mark, I think we are dealing with the tough comps on a just fact basis here over 2020 and the great growth rates that ECS had. We don't give forward numbers, and I don't think Ed parsed his guidance here. He gave it for ASGN, not for the commercial versus the GOV. We're looking for continued growth and new bookings, especially as the administration gets all its assets in place who are overseeing the awards of these contracts so that instead of getting extensions on work, we're beginning to get larger three- and five-year awards on some of this work. I think that that all portends well for the future, but I'll kind of stop there without giving any numbers here for the outquarters. I mean, just given all the press around cyber issues and targeting of federal installations and obviously some of Raytheon's comments the other day just with regards to kind of a strategic shift of how we should think about conflicts, wouldn't that portend well in terms of the budgets potentially increasing in terms of what you're able to go after? Look, we would agree with you. I think that speaks to George's comments around the fast currents of where we are playing. One of those is in cybersecurity. We have a very robust and sizable offering in the federal marketplace around kind of end-to-end cybersecurity. We would, I think, just leave it at we would generally agree with what you said. Great. Thank you. Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over to Mr. Hanson for any further closing comments. Great. I thank everyone for being here. We've spoken now twice in the last few weeks. We look forward to speaking with you again September 14th. We hope that you can make our virtual analyst day. We'll talk more about the future. Again, thank you for your support of ASGN. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.