Good evenings, welcome to the ASGN Incorporated first quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kimberly Esterkin, Investor Relations. Thank you, Kimberly. You may begin. Thank you, operator. Good afternoon. Thank you for joining us today for ASGN's first quarter conference call. With me are Ted Hanson, Chief Executive Officer; Rand Blazer, President; and Marie Perry, 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 GAAP and non-GAAP measures are included in today's press release. I will now turn the call over to Ted Hanson, Chief Executive Officer. Thank you, Kimberly, and thank you for joining ASGN's first quarter of 2023 earnings call. Continuing to execute solidly in the core strategic areas of our business, ASGN's revenues for the first quarter of 2023 improved 3.5% as compared to the prior year period. IT consulting revenues, including both commercial and federal government work, surpassed the 50% mark at $568.4 million or 50.4% of the first quarter revenues, compared to 42.4% of revenues in the prior year quarter. The strong go-growth of this business, particularly in light of macro conditions, reconfirms our strategic decision to double down on high-end, higher value consulting work for Fortune 1000 and federal government clients. We have the right group of professionals in place to successfully execute against this long-term plan. I want to thank all of the ASGN team for your efforts this past quarter in pushing our growth strategy forward. In contrast to commercial consulting and federal government work, the areas of our business that are more discretionary and cyclical in nature, namely assignment revenue, declined. We programmed for some of this in our guidance. The decline toward the end of the quarter was greater than we had initially anticipated, and this negatively impacted our Adjusted EBITDA margin. At 10.9% for the first quarter, which is seasonally the lowest, Adjusted EBITDA margins remain solidly in the double digits. Importantly, the long-term Adjusted EBITDA margin profile of our business has not changed and is expected to further improve over time based on our move toward a more consultative model. In addition, while a leading indicator on the downside, permanent placement and creative digital marketing have historically seen an uptick in revenue as macro conditions improve, followed by more sustained rallies once the economy exits a recessionary period. In the meantime, given market conditions, we are leveraging our variable cost structure and proactively taking down expenses in certain areas of the business while investing in others. Those actions are protecting our Adjusted EBITDA margins today and into the future. Also, our free cash flow benefited from a reduction in accounts receivable DSO by 1.2 days. ASGN's capital allocation strategy has not changed. We still believe that M&A remains the best use of and highest return on capital. Having said that, with limited deals in the pipeline at present, we expect to be more active in repurchasing ASGN shares given our view of the rather compelling share price. Our board of directors has recently approved a new two-year, $500 million share repurchase authorization. With that as a background, let's discuss our segment performance for the quarter. Our commercial segment, which predominantly serves large enterprises and Fortune 1000 companies, reported first quarter 2023 revenues relatively consistent with the prior year period on a tough double-digit year-over-year comparison. Apex Systems, our largest division, accounted for 85.4% of the commercial segment revenues. Revenues for the division improved 3.1% for the quarter, with top accounts achieving low single-digit growth and retail accounts achieving high single-digit growth year-over-year. Creative digital marketing and permanent placement revenues, which represent 14.6% of commercial segment revenues, declined double digits year-over-year. Our large enterprise industry-diversified commercial client base provides balance and protection to the downside. As such, even with the pullback in more of our discretionary businesses, we continue to see solid progress in three out of our five commercial segment industry verticals in the quarter. Financial services and healthcare verticals saw single-digit revenue growth year-over-year, while consumer and industrial vertical revenues improved high single digits compared to the first quarter of 2022. The technology, media, and telecom, or TMT, and business and government services verticals both declined mid-single digits. In financial services, growth was driven principally by wealth management. Improvement in our healthcare vertical revenues was largely driven by growth in provider accounts, while consumer and industrial strength was led by growth in energy, utility, and consumer staples. In the TMT vertical, telecommunications and technology accounts saw a pullback with delays in work and the impact of layoffs. In business and government services, aerospace and defense accounts saw solid growth during the quarter while we saw a double-digit revenue pullback in business services. Turning to our consulting business, our consulting offerings remain an important source of the value we provide clients and a core part of our strategic growth strategy. For the first quarter, commercial consulting revenues increased 32.7% year-over-year and were up 20% organically. Bookings were a record for the quarter and totaled approximately $392 million, up 31.7% year-over-year. This translates into a book-to-bill of roughly 1.3 to 1 on a trailing 12-month basis. With such strong bookings, it is evident that our clients continue to invest in IT consulting projects. In fact, while we have seen some of our clients de-emphasize smaller discretionary projects, they are reprioritizing their focus to other areas, such as work aimed at modernizing their systems and improving customer experiences. ASGN has been able to leverage these trends and remain favored by our clients in the consulting space as a result of our long-standing relationships, our expansive solutions portfolio, and our unique delivery model. Let me provide some examples of our commercial consulting wins for the quarter. In Q1, Apex Systems, in partnership with our GlideFast unit, was awarded a new contract to provide development services on the ServiceNow platform to a global automotive company. This same client also tasked our team with digitizing, automating, and optimizing its supply chain management processes. This is just one of the 13 new client wins during the first quarter in which Apex Systems brought the client relationship to the table and GlideFast the ServiceNow capabilities in order to jointly secure the contract. Also during the first quarter, we won a contract with a leading U.S. healthcare provider to help them deploy an application that uses artificial intelligence to detect when patients are performing an action that puts the patient at risk of falling, and then send an alert to the healthcare provider to review and take the appropriate action. The goal of the project is to increase the number of rooms the application can safely monitor remotely by leveraging AI and an Apex Systems-developed application. Let's now turn to our federal government segment, which provides mission-critical solutions to the Department of Defense, the intelligence community, and federal civilian agencies. Federal segment revenues for the quarter were up 15% compared to the first quarter of 2022, driven by a combination of organic growth and the impact of our recent Iron Vine acquisition. Contract backlog was over $3 billion at the end of the first quarter, or a healthy coverage ratio of 2.6 times the segment's trailing 12-month revenues. New contract awards for the quarter were approximately $75.2 million, which translates to a book-to-bill of 0.9 to 1 on a trailing 12-month basis. We are seeing delays in project funding largely due to new multi-phase procurement cycles and an increase in award protests. Q1 is also often seasonally low for our federal government segment, as the government acquisition cycle tends to lag behind the budget cycle. That said, our pipeline of opportunities remains robust, and the number of projects submitted awaiting award is as high as it's ever been. Let's turn to some examples of projects won during the first quarter. In the quarter, our team secured a number of recompetes and won new contract awards. In terms of recompetes, ECS again secured the Department of Homeland Security Web Content Management as a Service contract in which we are supporting the DHS with enterprise content delivery, DevSecOps, and cloud platform enhancements. With regards to new awards during the quarter, ECS won a prime contract to support the modernization and agile transformation of the Army's integrated pay and personnel system, which is the Army's number-one IT priority at present. Iron Vine is also making great progress, and ECS has leveraged Iron Vine's cybersecurity capabilities to pursue new opportunities across its entire client base. For example, in the first quarter, ECS won a new contract under Iron Vine to support the Millennium Challenge Corporation with Building and installing in-country solutions to track infrastructure investments in Kosovo and Malawi. This momentum has continued, and I'm pleased to report that ECS has already seen several bookings in early Q2. For example, we recently won a recompete of over $100 million to perform advanced addressing and geospatial technology solutions for a long-standing global mail delivery and shipping customer. With that, I'll now turn the call over to Marie, our CFO, to discuss the first quarter results and our second quarter 2023 guidance. Thanks, Ted. It's great to speak with everyone again today. Revenues for the first quarter were $1.1 billion, up 3.5% year-over-year on an as-reported basis. Excluding $50.4 million from businesses acquired in the past 12 months, revenues were down 1.2% compared to the prior year quarter. I'd like to put the first quarter revenue results into perspective. From a seasonality standpoint, revenues in the first quarter of each calendar year tend to be lighter as many clients finalize the funding of their calendar year project budgets. Also, on a consolidated basis, we achieved over 20% year-over-year revenue growth in the first quarter of 2022, creating a tough year-over-year comparison. While we anticipate some softness in our Q1 guidance due to macroeconomic conditions, as Ted noted, we fell below our guidance range, mainly due to further revenue declines towards the end of the quarter and our more discretionary and cyclical assignment work. Revenues from our commercial segment were $832.1 million, essentially flat year-over-year on an as-reported basis and down 3.2% organically. Revenues from commercial consulting, the largest of our high margin revenue streams, totaled $271.7 million, up 32.7% year-over-year. Excluding the $25.9 million contribution from GlideFast, consulting services revenue improved 20% year-over-year. Revenues from our federal government segment were $296.7 million, up 15% year-over-year. Excluding the contribution from Iron Vine of $24.5 million, revenues for the segment increased 5.5%. Moving on to margins. On a consolidated basis, gross margin was 28.9%, down 100 basis points over the first quarter of last year. The compression in gross margin was mainly related to business mix, including a slightly higher mix of revenues from our federal government segment, which carry a lower gross margin than commercial revenues, and a lower mix of creative digital marketing and perm placement revenues, which have higher gross margins. Gross margin for the commercial segment was 31.5%, down 120 basis points year-over-year, primarily due to a smaller contribution from our discretionary and cyclical assignment revenues, as noted. By contrast, gross margin for the federal government segment was 21.6%, up 70 basis points year-over-year, due to a smaller amount of cost reimbursable contracts and the contribution from Iron Vine. SG&A expenses for the first quarter were $224.1 million, up 5.7% year-over-year due to investments in workforce and technology made in 2022. SG&A expenses were favorable to guidance due to the highly variable nature of our cost structure, which benefited from fluctuations in our incentive compensation and from attrition in our business. SG&A expenses also included $2.3 million in acquisition, integration, and strategic planning expenses that we do not include in our guidance estimates. As expected, interest expense increased year-over-year related to rising interest rates, which impact only a portion of our debt. As a reminder, over half of our debt is fixed at below market rates. Amortization of intangible assets was higher due to recent acquisitions. Income from continuing operations was $49.5 million. Adjusted EBITDA was $123.5 million, and Adjusted EBITDA margin was 10.9%. Our two highest margin contributors, permanent placement and creative digital marketing revenues, pressured our Adjusted EBITDA margin compared to what we had originally guided for the quarter. At the end of the quarter, cash and cash equivalents were $65 million, and we had full availability under our $460 million senior secured revolver. Free cash flow for the quarter totaled $68.8 million, an improvement of 48.3% over the first quarter of 2022. As Ted mentioned, cash flows benefited from a reduction in accounts receivable, thereby improving DSO by 1.2 days. With strong free cash flow generation and full availability under the revolver, we have ample dry powder to make strategic acquisitions. Given the limited acquisition opportunities at present and our stock trading at such attractive levels, we deployed $48.8 million in cash on the repurchase of 563,200 shares of the company's common stock during the first quarter. This week, our board of directors approved a new two-year $500 million share repurchase plan, replacing the prior authorization. Turning to our guidance. Our financial estimates for the second quarter of 2023 are set forth in our earnings release and supplemental materials. These estimates are based on trends in March and April, assumes 63.25 billable days in the second quarter, which is essentially the same as the year-ago period and sequentially, and includes the estimated revenue contribution of $52.8 million from acquisitions made in the last 12 months. We are providing wider ranges this quarter than in prior quarters to account for uncertain macro conditions at present. With that in mind, we expect macro conditions in the second quarter to be similar to that of the first, with continued softness in assignment revenues. Given the seasonality of our business in Q1 being the lowest from a revenue standpoint, revenues should increase sequentially. We expect second quarter revenues to be driven by commercial consulting and federal revenue growth, offset by continued softness in IT staffing consistent with our peer set and to a lower extent, declines in permanent placement and creative digital marketing. We also face another difficult year-over-year comparison that had over 17% growth in the second quarter of 2022. In our guidance numbers, we have assumed leverage from our variable cost structure and certain cost containment efforts, as well as lapping of the payroll tax reset in Q1. These assumptions limit the downward pressure on margins without hampering our long-term growth drivers. With that background, for the second quarter, we are estimating revenues at $1.11 billion to $1.145 billion on roughly the same number of billable days and against a difficult year-over-year comparable. This translates to a year-over-year growth rate of -2.8% to +0.3% compared to the prior year quarter's results. We are estimating net income of $52.8 million to $60 million and Adjusted EBITDA of $125 million to $135 million. We are expecting gross margin will decline year-over-year primarily due to business mix similar to the more recent trends, including a greater mix of federal government work and the continued softness in assignment work. Adjusted EBITDA margins are also anticipated to decline year-over-year, should benefit from our variable cost structure commensurate with revenue, along with other cost control measures such as headcount attrition and limitations in discretionary spending. Thank you. Now I'll turn the call over to Ted for some closing remarks. Thanks, Marie. Like our peers, the difficult macroeconomic conditions are impacting our performance in the more discretionary cyclical areas of our business. These conditions are outside of our control. What is in our control is our ability to execute and strategically position our business to succeed throughout economic cycles. In the first quarter, we did just that. We continued to evolve our business toward a more consultative model. While clients are scrutinizing spend, they're continuing to invest in IT projects that are critical for their businesses. With over 50% of our revenues now in higher-end, higher-value IT consulting work, we are shaping and evolving our operations for success in both the short and the long term. Importantly, we have a number of key business stabilizers in place to support our business on the downside, and we remain committed to providing leading IT services and solutions to the commercial and government end markets we serve. Thank you all for joining our first quarter call. We will now open it up to your questions. Operator? Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our next question is from Maggie Nolan with William Blair. Please proceed with your question. Hi. Thank you. Really interesting to see you guys cross that 50% of revenue mark, on the IT consulting work. Congratulations on that. My first question is around kind of client sentiment. I know you've mentioned that your clients tend to kind of finalize their budgets in the first quarter. What kind of feedback were you getting from clients as they finalized that process as it relates to kind of the full year spend projections? Yeah, Maggie, I'll start, and I'll let Rand kind of hop in with me here on this one. I think, look, clients are posturing overall as cautious. The staffing programs and the staffing part of the business, they can put their finger on there first and moderate spend and get protective, if you will, get a based on future uncertainty. At the same time, you can see, just based on the data points in our consulting business, that they continue to stay invested in projects that are going on in IT that are key strategic business drivers. Not only do they continue with projects that are going on, but they're also adding to that with new work. I think the clients are just being, they're very wary. They're saving money in places of the business where they can, and they're also continuing to invest in areas of the business that are critical for IT. Now, underneath of that, there's an industry by industry story which we can get into, but I think overall, at a high level, you know, there's a certain cautiousness for sure within the client base. Rand, would you add anything to that? I think you hit everything. Maggie, obviously we're watching the bookings numbers, rep consulting numbers. We're watching what's going on in their staffing programs, which Ted said are easier to put their finger on and pull back on, if you will. In the consulting world, we're very pleased with, I think, the progress we've made and the clients still thinking forward. Ted is absolutely right. Some industries are obviously being more aggressive than others on their IT spend. Cautiousness is probably a, an operative word here. Got it. Thank you. I think it was Marie talking about evaluating some of your expenses and balancing that with your investment areas, given the market conditions. What are some of those key areas where you think you can cut back versus where will you continue to invest for future growth? Hi, Maggie. Some of those areas really is the discretionary component of some of our spend. Items like travel, making sure we are tight on that. We also have attrition, just built into our model. We see that coming to play as well. We believe that the combination of the attrition that's happening, and then the right sizing with the variable cost structure that we have, along with the control over some of those discretionary spend are those three categories. If you think, Maggie, if you think just about our business in three buckets, if you will, obviously in the staffing piece, which encompasses creative digital, IT, and permanent placements, that's where we're seeing most of our natural attrition. In commercial consulting, there's a good and productive marketplace, and so we're staying invested there and attacking that. You know, you can tell from our wins there that, you know, that's working. Then on the federal side also, it's a productive area right now. We're growing, we're staying invested around that. So, you know, I think at a high level, Marie kind of captured all the areas and just inside the segments of our business, those are the plus and minuses. That's helpful. Hey, Ted, Maggie, can I just add real quick? 'Cause if you remember in the last quarter, we talked about banks being a good spender in the first quarter around IT. Proved out not to be quite so much, but the amount of activity is picking up because of compliance and other information needs in that sector, both regional and big banks. You know, we're hopeful that we'll see maybe a resurgence and therefore we're deploying to that. Got it. Thanks, Rand. Thank you. Our next question is from Tobey Sommer with Truist Securities. Please proceed with your question. Thanks. On the commercial consulting area, what is the sales cycle look like and how has it evolved year to date? You obviously had a good bookings quarter. I'm wondering if you've seen and perceived any changes over the course of the first four months of the year. Rand, do you want to take that? Yeah, Tobey, I wouldn't really say there's much changes. I mean, most Fortune 1000 companies like ourselves, they have a IT path, modernization path, introduction of some technologies, product things that can improve productivity of the workforce and/or the customer experience. That path hasn't changed. You know, the discussions we have with a client are still around those paths and what projects can we take on to help them get there and be efficient, give them quality at the right price point, if you will. Now we are back. Our pipeline is also growing. Again, you know, there are some industries, no question, Tobey, and I think Ted pointed this out already, where we alluded to this, that they're definitely a little bit more cautious, and they just want to be slow, a little slower. The sales process may elongate by some weeks, or they may get something started but not go full bore right away. For the most part, you know, we've seen pretty good success and pretty good discussions across the board. There are some areas, like I just mentioned to Maggie, on the financial services end, there's new discussions now because there's new compliance requirements, new things to monitor, new things that they have to get their arms around along with, you know, their cloud migrations and the other things that are ongoing. Thanks. From a staffing perspective, where would you say The bill rate growth is now and how does that compare to either, you know, folks you have out on assignment or another volume metric, you know, weekly hours, whichever one you want to choose? Yeah. Well, I would say, you know, bill rate growth is naturally happening in the business as we have a higher mix of consultative type engagements, right? We're just, it's a higher value proposition to the customer. We're getting better rates, higher rates, and we're also getting higher gross and EBITDA margins. Naturally, across the business, we continue to see the bill rate go up. That's probably the number one factor. The number two factor underneath that is pay to bill spreads are remaining pretty steady. We're not seeing any degradation of that. I think that speaks to kind of the continued tightness in the labor pool around mission-critical IT skill set and that they're still in demand. you know, those are two data points around that. I guess based on that kind of commentary, is it fair to assume that bill rate growth still exists in the staffing business, and it is just being sort of overwhelmed by volume declines? Bill rate growth is still there for sure. It's not as steep as it was. Wage inflation, not as steep as it was. Those are going up, but at a lesser level to what we saw in the past. Certainly, we're having volume declines in the staffing part of the business. Okay. Could you give us a sense for where perm is now and compare and contrast where it is in the range historically? Maybe also describe the margins in Creative Digital. I know they've come down, but contextualize that too, if you could. Sure. Well, permanent placement is around 3% right now. At its high, it was close to 5%. I would say 3.5%-4% is kind of a normal level for us, if you will. Creative Circle EBITDA margins are higher than our overall company margins. They range kind of from the mid-to-high teens in that business and have been pretty consistent and well managed by Matt Riley at Creative Circle over a number of years. Thank you. Our next question comes from Heather Balsky with Bank of America. Please proceed with your question. Hi. Thanks for taking my question. I guess, first off, can you dig in a little bit more to the slowdown that you saw towards the end of the quarter, in terms of kind of the level of deceleration, what areas of your staffing business were most impacted? And when you think about the guide for the second quarter, are you assuming kind of a steady state from what you saw in March and April, or are you kind of factoring in further deceleration? Thanks. Maybe a couple things here. I think coming across the new year, if you think about coming from the end of December into January, we would typically see a slight notch down, and that's just natural end of projects and new projects are starting. I think Marie mentioned in her commentary that's a pretty normal thing in the business, and we saw that in this year. What was unique is about, you know, two-thirds of the way into the quarter, certainly end of February, instead of seeing us begin to track back up, we took another notch down. That was unexpected, and I'd say that's really the difference. What we've seen in the last, what I'll say four to six weeks, is a pretty good steadiness. You're still down a little bit in the staffing part of the business, and obviously, you're up on the consulting side of the business. You know, they pretty much have kind of continued that offsetting trend here for the last four to six weeks. That's the first quarter. If you think about the second quarter, I think Marie's comments were that the guidance that we gave really predicated a similar trend to what we've seen in March and April, and that's the flattishness that I mentioned a few seconds ago. That's really where the guidance is predicated. You know, we've built some conservatism in that for the staffing to potentially get a little bit weaker, and you can see that both in the bands that we gave on the revenue and the EBITDA side, especially to the downside. You know, what we'll get, we'll have to watch and see, but that's what we see here, you know, just three weeks into the quarter. That's helpful. Thank you. And then switching gears, we've gotten some questions just with, you know, AI being in the news and very topical, and just curious your thoughts on kind of how the rise of AI right now, you know, potentially helps or, you know, could hurt your business. I think, you know, we've heard sort of bull case, there's opportunities for AI-type roles. On the flip side, you know, is there risk that sort of, the number of tech jobs out there shrinks? Just curious to get your thoughts. I'll start, and then if Rand has something to say here, I'll turn it over to him. I think this is a new business driver, if you will. So often things come along that kind of push the next wave of digitization, automation, and IT work forward, and this is certainly going to be one of those. It's too early to really get your arms all the way around what the opportunity is, but there's no question that this is one of these. Inside of our business, I see it as a productivity driver. A lot of the things that we do for clients in terms of helping them solve problems, either on the talent side or providing a certain solution, you know, is going to remain there. In terms of how we operate and execute our business, early on, you can already see that there are going to be opportunities for AI to make a real difference in us continuing to increase, the productivity in the way we serve our clients. Rand, what else would you add to that? Well, listen, everything Ted said was great. We obviously see AI as a key driver of IT spend going forward, along with machine learning. Let's remember, and by the way, we featured some of that in this earnings call with our healthcare client, and we have, in the past, featured it with some of the work we're doing with the Department of Defense in the federal side. Let's remember that what you need is a good data structure. You need a good cloud and data structure in order to do AI. What you see from some of the other big tech giants is cloud work is still moving forward because you've got to harness data, you've got to be able to assimilate, you've got to be able to track it, and the trends in data, which is both a cloud and a data analysis set of things to do. There's a lot of groundwork to be doing to make AI really work. Not to mention just the technology of AI and machine learning. You know, I think that's why you see a lot of us still growing in those areas. I appreciate it. Thank you very much. Thank you. Our next question comes from Jeff Silber with BMO Capital Markets. Please proceed with your question. Hey, good afternoon. Ryan on for Jeff. Just a quick question. We've seen some headlines surrounding declines in IT spend. Was just wondering how those factors impact your business, and are those impacting the digital transformation initiative that you've spoken about previously? Rand, do you want to take that? Yeah, let me start. First of all, Jeff, I would say there's a decline in IT staffing expenditures for sure, okay? And that's because, as Ted pointed out earlier, clients, Fortune 1000 clients specifically, can put their finger on it and leverage it or stop it or start it in hours, not even in days, okay? In consulting, we have not seen a slowdown in consulting spend, and the projects that make that up. You know, I guess I would clarify that. Perm placement is also in that IT staffing piece. Why would you hire somebody on your corporate staff at this point in time in the economic cycle? That will eventually come back, as you said. Jeff, the second part of your question was not just whether they're spending, but... Go ahead. The second part was what? It was just on the digital, how that relates to digital transformation. Yeah, I think digital transformation. Look, AI and machine learning is on everybody's mind in the press. The cloud work and the data analysis I just mentioned is what I call infrastructure and building for that. The digital transformation is embedded and still a big part of what we're doing for clients. You know, we just recently signed a new piece of work with a telecommunications company, media company, using ServiceNow technology. Our GlideFast business is growing. I think Ted mentioned that earlier. And their backlog and bookings are growing. There's still a lot of interest in some of the digital transformation initiatives our clients are involved with. I think it goes to the comment Ted made earlier. Those are things that have already started. You know, they may, if you will, go a little slower at some of them for a small period, but they're still going. Hey, Ryan. One more thing I would add to that. I think our clients view their IT initiatives as strategic, just like we do, right? As we look at the things that we're doing in the business, we can't really take our foot off the gas. I mean, all these are about reaching our customers, being more productive, having better data and analysis, being in the cloud, having better security. While we may let some discretionary spend fall in certain areas, you know, inside of our own business, whether it's marketing or travel or some, you know, levels of headcount or what have you, what we're going to do our best to stick with are our investments in all the IT projects that are helping us move down the pathway in our digital roadmap. I feel like, you know, our clients look at it the same way. In fact, I know they do because when we talk to them, that's most of what we get. Yes, they're being cautious to Rand's point. But, you know, I think, you know, IT spend now is so much a strategic initiative than it used to be a cost center, right? There's just a little bit different view of this. Yes, some of it's spending will ebb and flow. None of us need laptops. We bought so many over the last couple, three years. We don't need more laptops. We do need to keep moving on all these things that are initiatives, to get the right applications in our business, to get them into the cloud, to keep them secure and make them productive for us to reach our customers and serve them in our services. anyway, that's kind of how we see it. Thanks for that. Just to follow up, if there were to be some weakness in some of the top of the pyramid areas, such as architecture, implementation, consulting work, if you see those, would you see trends coincidentally in your consulting business? Some of the, you know, systems deployments or service centers are there, maybe some lag between those two areas of the consulting market? Well, Rand, certainly management consulting is an area that's maybe softer. you know, if this went on longer, would IT spend around design and architecture be protracted? Likely. The execution of the work, which is where we play for the most part, should still be pretty strong. Yeah, agreed. Thank you. Our next question comes from Surinder Thind with Jefferies. Please proceed with your question. Thank you. Ted, just to follow up on the earlier color about kind of the transition that's occurring in 1 Q to 2 Q in terms of the weakness that we saw in the staffing business. Can you talk about it in terms of was this companies kind of pulling back on staffing in the sense that they're delaying projects and they're having people come off of those projects? Or is it the projects are tending to be pushed where in the pipeline, maybe there was positions that were open and that you had anticipated filling, but at that point they've removed those positions? How should we think about that mix at this point and ultimately what the, you know, what the longer term risk here is over the next 6-12 months in terms of what kind of a pullback, you know, in terms of trying to kind of put ends on what the way the clients think about this. Rand, you wanna take that? Well, Ted, let me start, then you can jump in. Surinder, the first thing I would say to you, though, is when you're on the staffing side, you don't always know what the project is. It's an electronic world where they have requisitions, they publish the requisitions through PMSs, you respond to them. Do our account managers have a sense of where they're deploying these people? The answer is we have a sense, it's not a project. You're not hiring people for projects, you're hiring people. Where the company puts them is to some extent, through the electronic media or means, a little invisible to us. Having said that, I think it's just a question of when they're rotating people or that they just are taking a pause and when they start a new person back up. I think they do that because it's a cost control measure. That's why companies have staffing programs and with the full visibility from the top down in the organization. Remember 15 years ago, 20 years ago, they didn't really have all these programs. There was a lot of independent one-off, you know, hiring people. They've really put great programs in place. They've made it electronic, which all of us have responded to and we've benefited from in the sense of transactional flow. But having said that, I think what they see is they know that this is a way that they can control costs, at least in the short term. Not a long-term answer, it's a short-term answer just to bridge the gap till they decide to continue to move forward. You can't run your service centers, for example, which is where some of that staffing goes, unless you up the productivity of that team or you just limp along for a while because there's a general lower level of action going on in that service center. I'm using that as an example. If it's project-oriented, it's more coming through the consulting program, and I think our backlog in consulting revenues talk for themselves. That's helpful. Then, as a follow-on, for Marie, can you maybe talk about M&A at this stage, given the color around the limited deal pipeline? Is that by design here? Is it a valuation issue? How should we think about, you know, that part of the commentary? Well, I mean, from an M&A perspective, I mean, it's really around trying to find that right deal, to your point, that meets our value proposition. We've said that our use of capital, that M&A is the first and best use. You know where we are. Surinder, let me add one more thing. I think it's opportunistic, right? What we've always said, if there wasn't the next, you know, right opportunity in front of us, that we would then turn to share repurchases, which obviously we've done here during the last quarter and intend to continue with the new share authorized repurchase authorization and continued free cash flow here as we go forward. Look, we still would love to find certain properties that fit our shopping list that we have defined both in commercial and gov. We continue to talk to, you know, various targets, and that doesn't stop. It's just slower now and kind of nothing at the lip of the cup. To your point, I think one of your last part of your question was about valuation. There's still not a discovery of valuation today because their seller is not willing to sell a really good business into a marketplace where the buyer is not willing to pay what he perceives or she perceives the multiple to be. You've got a little bit of a stalemate going on still. Until the financing markets and the equity capital markets are working in a way that it supports a normal amount of deal flow and that discovery can be made, we're at a little bit of a loggerhead, I would say. Thank you. That's helpful. Thank you. Our next question comes from Mark Marcon with Baird. Please proceed with your question. This is Andre Childs in for Mark. Thank you for taking our questions. My first question will just follow up on the last one. Can you speak about how you feel about your current debt levels, and what are your thoughts on increasing leverage if the right opportunity did come up in this environment? Sure. Great question, Andre. I mean, we're still very modestly leveraged. I think on a senior basis, secured, we're less than one, about 0.9. I think on a total leverage basis, it's under two, 1.9. We've always said that when we're below 2.5, we're kinda under-levered, if you will, if there are good M&A opportunities in the marketplace. In normal times, we've leveraged up to about 3.8x, and we've done that on five different occasions, I believe, to make a larger acquisition. The margin and free cash flow characteristics of the business certainly support that. These aren't normal times, obviously we're wary about leverage and how we think about that with so much uncertainty in the market. We have dry powder, we have free cash flow, we have a $460 million revolver that doesn't have anything outstanding on it. We purposefully increased it two quarters ago so that if the right M&A opportunity came along, we could take advantage of it. I would say we're willing to take on a little bit of leverage for the right thing, but you won't see us up at three and 3.8 times, you know, leverage metrics, until we have some certainty in the market. Great. Thank you. That's a very helpful color. My follow-up will be, you spoke a little bit about the new multi-phase procurement cycles on the federal side. Could you provide some more color on that and any initial thoughts on how that could impact, you know, strategy or go-to-market operations on the federal side? Yeah, there's just a lot of gyrations going on in the whole procurement world within the federal government. Still is hungover from COVID. It's still not quite cycling and working like it should. The government is going to big multilayered, you know, RFPs and awards where they can to be more efficient. That naturally is slowing down the procurement wheel to get something, an RFP put together, to get it on the street, to get the right firms to respond to it, to adjudicate all that, then to finally make an award. On the back end of all that, the world of protests has just taken on another level of craziness. You know, there's just a lot more protests going on. It used to be you were very careful about making a protest, because you were basically telling your customer they were wrong, in terms of how they looked at a certain situation and adjudicated down to a final award. Today, nobody's afraid to adjudicate it or to protest. It seems like that's the first response the minute an award is made. you know, now not only are you seeing protests on the back end after awards are made, you're seeing them on the front end, when firms don't agree with how the government customer is putting together the criteria, when they put a contract out for bid. you know, it's just a different level of stuff going on in that whole procurement world. It's, you know, quite honestly, kind of just bringing complexity and slowing down the machine, if you will. Beyond the effect, the lingering effect from COVID. Great. Thank you so much. There are no further questions at this time. I would like to turn the floor back over to Ted Hanson, CEO, for closing comments. Great. Well, thank you for being with us today. We appreciate all your questions and your time. We look forward to announcing our second quarter results, later in July. This concludes today's teleconference. You may disconnect your lines at this time. 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