Everforth Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 29 July 2026: press release. Guidance figures: 1 raised, 12 new. The quarter’s numbers.

Key takeaways

Revenue down year over year: Revenue was $1,007.0 million, down from $1,020.6 million a year earlier and up from $968.3 million in the first quarter. Source
Results above top of estimate range: Revenue, net income, adjusted EBITDA and adjusted EBITDA margin were above the high end of the second-quarter estimates given in the prior release. Source
Adjusted EBITDA margin 9.6 percent: Adjusted EBITDA was $96.7 million, or 9.6 percent of revenue, against $108.5 million (10.6 percent) a year earlier and $83.6 million (8.6 percent) in the first quarter. Source
Commercial book-to-bill rose to 1.2: Commercial IT consulting book-to-bill on a trailing-twelve-month basis was 1.2 to 1, up from 1.1 to 1 in the first-quarter release. Source
Commercial gross margin fell 90 basis points: Commercial gross margin was 32.1 percent, down 90 basis points, mainly from a lower mix of high-margin permanent placement revenue and Mexico foreign exchange effects. Source
Operating cash flow fell year over year: Operating cash flow was $52.2 million, against $124.9 million a year earlier and $18.5 million in the first quarter. Source
Third-quarter revenue and margin ranges: Third-quarter revenue is estimated at $994.0 million to $1,024.0 million, with gross margin of 28.0 to 28.5 percent. Source

“Everforth delivered solid second quarter 2026 results, with revenues of $1 billion and Adjusted EBITDA margin of 9.6 percent both exceeding our expectations,”
Ted Hanson, Chief Executive Officer of Everforth, Inc.

Guidance

Area	Period	Figure	Against last quarter
Revenue Source	third quarter 2026	$994.0 million to $1,024.0 million	New
SG&A expenses Source	third quarter 2026	$220.4 million to $221.9 million	New
Amortization of intangible assets Source	third quarter 2026	$17.3 million	New
Net income Source	third quarter 2026	$14.5 million to $23.0 million	New
Diluted EPS Source	third quarter 2026	$0.36 to $0.56	New
Gross margin Source	third quarter 2026	28.0 percent to 28.5 percent	New
Effective tax rate Source	third quarter 2026	29.0 percent	New
Adjusted EBITDA Source	third quarter 2026	$95.0 million to $105.0 million	New
Adjusted Net Income Source	third quarter 2026	$37.8 million to $44.8 million	New
Adjusted Net Income per diluted share Source	third quarter 2026	$0.92 to $1.10	New
Adjusted EBITDA margin Source	third quarter 2026	9.6 percent to 10.3 percent	New
Acquisition, integration and strategic planning expenses Source	third quarter 2026	approximately $7.5 million to $9.5 million	New
Cash tax savings benefit from goodwill and trademark amortization Source	per quarter	approximately $9.6 million per quarter ($0.24 per diluted share)	Raised from approximately $9.6 million per quarter ($0.23 per diluted share)

What changed from last quarter

New guidance: Estimates for the third quarter of 2026 were issued in this release, based on current market conditions. Source
Guidance raised: Cash tax savings benefit per diluted share is stated at $0.24, up from $0.23 in the prior release; the $9.6 million per quarter amount is unchanged. Source
New: The revolver was refinanced in July 2026 into a new five-year $600 million facility, replacing the previous revolver and Term Loan A. Source
New: The company launched as Everforth, Inc. with NYSE ticker EFOR effective April 24, 2026, following the ASGN name in the prior release.

Results and profit measures

Revenue down year over year: Revenue was $1,007.0 million, down from $1,020.6 million a year earlier and up from $968.3 million in the first quarter. Source
Results above top of estimate range: Revenue, net income, adjusted EBITDA and adjusted EBITDA margin were above the high end of the second-quarter estimates given in the prior release. Source
Adjusted EBITDA margin 9.6 percent: Adjusted EBITDA was $96.7 million, or 9.6 percent of revenue, against $108.5 million (10.6 percent) a year earlier and $83.6 million (8.6 percent) in the first quarter. Source
Net income below prior year: Net income was $14.2 million, or $0.35 per diluted share, against $29.3 million or $0.67 a year earlier, and $5.5 million in the first quarter. Source
Adjusted EPS below prior year: Adjusted net income per diluted share was $0.91, against $1.17 a year earlier and $0.69 in the first quarter. Source

Segments and industries

Commercial revenue slightly lower: Commercial Segment revenue was $701.7 million, 70 percent of the total, against $708.1 million a year earlier and $675.5 million in the first quarter. Source
Federal revenue down year over year: Federal Government Segment revenue was $305.3 million, 30 percent of total, down from $312.5 million in the prior-year quarter and up from $292.8 million in the first quarter. Source
Four of five industries declined: Four commercial industries declined year over year, while Technology, Media and Telecom rose $7.7 million, or 5.6 percent. Source
Federal decline from two customer types: The federal decline came from Defense and Intelligence and Federal Civilian, partly offset by National Security and other clients. Source

“Performance in the quarter was supported by strength across our Commercial enterprise platform portfolio, where improving bookings conversion contributed meaningfully to our results and drove revenues above guidance for the quarter.”
Ted Hanson, Chief Executive Officer of Everforth, Inc.

Bookings and order book

Commercial book-to-bill rose to 1.2: Commercial IT consulting book-to-bill on a trailing-twelve-month basis was 1.2 to 1, up from 1.1 to 1 in the first-quarter release. Source
Federal awards and book-to-bill higher: Federal new contract awards were $0.9 billion on a trailing-twelve-month basis, with a book-to-bill ratio of 0.8 to 1, against $0.8 billion and 0.7 to 1 previously. Source
IT consulting about half of segment: Commercial IT consulting makes up about half of the Commercial Segment's revenue and has grown as a share of it over time. Source

Costs, margins and expenses

Commercial gross margin fell 90 basis points: Commercial gross margin was 32.1 percent, down 90 basis points, mainly from a lower mix of high-margin permanent placement revenue and Mexico foreign exchange effects. Source
Federal gross margin edged up: Federal gross margin was 19.6 percent, up 40 basis points, which management attributed to focused efforts to improve profitability across the contract portfolio. Source
Consolidated gross margin 28.3 percent: Consolidated gross margin was 28.3 percent, a 40 basis point compression from the prior-year quarter. Source
SG&A includes acquisition-related costs: SG&A totaled $226.2 million, against $216.8 million a year earlier, including $9.8 million of acquisition, integration and strategic planning costs versus $8.3 million. Source
Interest expense higher: Interest expense was $20.4 million, against $18.2 million in the prior-year quarter and $17.1 million in the first quarter. Source

“We believe that the last mile of the AI valuation equation will be IT services”
Ted Hanson, Chief Executive Officer of Everforth, Inc.

Cash flow and liquidity

Operating cash flow fell year over year: Operating cash flow was $52.2 million, against $124.9 million a year earlier and $18.5 million in the first quarter. Source
Free cash flow after capital spending: Free cash flow was $46.3 million after $5.9 million of capital expenditures, against $115.8 million a year earlier. Source
Cash and revolver availability: Cash was $152.9 million at June 30, 2026, and about $180.0 million was available under the $500.0 million revolving facility. Source
Senior notes and term loans outstanding: Senior unsecured notes totaled $550.0 million at 4.625 percent, due 2028, and Term Loan B stood at $486.3 million, due 2030. Source

Capital and shareholder returns

Repurchased 0.4 million shares: The company bought back 0.4 million shares for $11.5 million at an average $30.07 per share, leaving about $923 million under the plan at quarter end. Source
Buybacks smaller than first quarter: First-quarter repurchases were 0.8 million shares for $39.0 million, at an average price of $47.69 per share.
Debt repaid in quarter: The company repaid $23.9 million of debt during the quarter. Source
Revolver refinanced in July: In July the company refinanced and upsized its revolver into a new five-year $600 million facility, replacing the previous revolver and Term Loan A. Source

Third quarter 2026 estimates

Estimates assume stable markets: Third-quarter estimates are based on current market conditions and assume no deterioration in the markets served. Source
Third-quarter revenue and margin ranges: Third-quarter revenue is estimated at $994.0 million to $1,024.0 million, with gross margin of 28.0 to 28.5 percent. Source
Adjusted EBITDA range given: Estimated adjusted EBITDA is $95.0 million to $105.0 million, compared with $96.7 million reported for the second quarter. Source
Net income and EPS estimates: Net income is estimated at $14.5 million to $23.0 million, or $0.36 to $0.56 per diluted share. Source

Strategy and integration

Quinnox bought for cash: The company bought Quinnox for $290.0 million cash in March 2026 and borrowed under its revolver to fund the purchase.
Strategic initiatives under way: Strategic initiatives include a go-to-market update, outsourcing of some back-office functions, an ERP implementation and Quinnox integration costs. Source
AI integration named as central challenge: Management said the challenge with AI is less about access to technology and more about integrating it into workflows, data and operating models. Source

Leadership and brand

New commercial and federal leaders: In the first-quarter release, the company said it had recently welcomed new commercial and federal leadership to execute its Next Wave Growth Strategy.
Rebrand to Everforth completed: The company launched as Everforth, Inc. with NYSE ticker EFOR effective April 24, 2026, following the ASGN name.
Investments aimed at AI-led demand: The first-quarter release said leadership investments were meant to support growing client demand for AI-led transformation and outcome-oriented solutions.

In management's words

“In addition, the recent expansion of our revolving credit facility just after quarter end further strengthened our balance sheet and enhanced our financial flexibility.”
Ted Hanson, Chief Executive Officer of Everforth, Inc.

Figures management reported

Figure	Reported
Commercial IT consulting book-to-bill (trailing twelve months) Source	1.2 to 1
Federal Government new contract awards (trailing twelve months) Source	$0.9 billion
Federal Government book-to-bill (trailing twelve months) Source	0.8 to 1
Commercial IT consulting share of Commercial Segment revenues Source	approximately 50 percent

Risks management discussed

Demand: Four of the five commercial industries declined year over year, with only Technology, Media and Telecom growing. Source
Demand: Federal book-to-bill on a trailing-twelve-month basis was 0.8 to 1, meaning awards were below revenue for the period. Source
Operational: Commercial gross margin was reduced by a lower mix of permanent placement revenue and foreign exchange changes at the Mexico delivery center. Source
Regulatory: The first-quarter release attributed federal revenue declines to Defense and Intelligence and Federal Civilian agencies due to DOGE.

Earlier plans management reported on

Ahead: The company reported these measures above the high end of its second-quarter estimates. Source
Ahead: Management said bookings conversion drove revenue above guidance for the quarter. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Everforth Reports Second Quarter 2026 Results

Revenues, Net Income, Adjusted EBITDA and Adjusted EBITDA Margin Exceed the High-End of Guidance Estimates

RICHMOND, VA. - (BUSINESS WIRE) -- Everforth, Inc. (NYSE: EFOR), a leading technology and digital engineering company, reported financial results for the quarter ended June 30, 2026.

Highlights

Second Quarter 2026

Revenues were $1,007.0 million
Net income was $14.2 million
Adjusted EBITDA (a non-GAAP measure) was $96.7 million (9.6 percent of revenues)
Operating cash flows were $52.2 million and Free Cash Flow (a non-GAAP measure) was $46.3 million
Repurchased 0.4 million shares of the Company's common stock for $11.5 million and repaid $23.9 million in debt
Subsequent to the quarter end, in July completed the refinancing and upsizing of revolver, replacing previous revolver and Term Loan A, with a new five-year $600 million revolving facility

IT Consulting Metrics

Commercial Segment - book-to-bill ratio for the IT Consulting business trailing-twelve-month period ("TTM") was 1.2 to 1
Federal Government Segment - New contract awards for the TTM were $0.9 billion; book-to-bill ratio was 0.8 to 1

Management Commentary

“Everforth delivered solid second quarter 2026 results, with revenues of $1 billion and Adjusted EBITDA margin of 9.6 percent both exceeding our expectations,” said Ted Hanson, Chief Executive Officer of Everforth, Inc. “Performance in the quarter was supported by strength across our Commercial enterprise platform portfolio, where improving bookings conversion contributed meaningfully to our results and drove revenues above guidance for the quarter. In addition, the recent expansion of our revolving credit facility just after quarter end further strengthened our balance sheet and enhanced our financial flexibility.”

Hanson continued, “As AI adoption continues to accelerate and customers move from pilots to scaled production environments, the challenge is less about access to technology and more about integrating AI into workflows, data environments, and operating models. We believe that the last mile of the AI valuation equation will be IT services, and Everforth's differentiated combination of talent, industry expertise, governance capabilities, and technology alliances positions us at the intersection of the most important trends shaping our industry. We enter this next phase of AI adoption with confidence in both our strategy and ability to execute.”

Second Quarter 2026 Financial Results - Summary

	Three Months Ended
	June 30,				March 31,
(In millions, except per share data)		2026		2025		2026
Revenues
Commercial Segment	$701.7		$708.1		$675.5
Federal Government Segment	305.3		312.5		292.8
Consolidated	$1,007.0		$1,020.6		$968.3
Gross Margin
Commercial Segment	32.1%		33.0%		31.0%
Federal Government Segment	19.6%		19.2%		19.6%
Consolidated	28.3%		28.7%		27.5%
Net income	$14.2		$29.3		$5.5
Earnings per diluted share	$0.35		$0.67		$0.13
Non-GAAP Financial Measures
Adjusted Net Income	$37.2		$51.6		$28.7
Adjusted Net Income per diluted share	$0.91		$1.17		$0.69
Adjusted EBITDA	$96.7		$108.5		$83.6
Adjusted EBITDA margin	9.6%		10.6%		8.6%

Definitions of non-GAAP measures and reconciliation to GAAP measurements are included in the tables that accompany this release.

Consolidated revenues for the quarter were $1,007.0 million, compared with $1,020.6 million in the second quarter of 2025. Commercial Segment revenues were 70 percent of total revenues and were $701.7 million, compared with $708.1 million in the second quarter of 2025. Federal Government Segment revenues were 30 percent of total revenues and were $305.3 million, compared with $312.5 million in the prior-year period.

Commercial Segment revenues are categorized into five industries: (i) Consumer and Industrial, (ii) Technology, Media and Telecom ("TMT"), (iii) Financial Services, (iv) Healthcare, and (v) Business Services. Four of the industries decreased year-over-year, while TMT increased by $7.7 million or 5.6 percent.

Federal Segment revenues are categorized into four customer types: (i) Defense and Intelligence, (ii) National Security, (iii) Federal Civilian, and (iv) other clients. The year-over-year revenue decline was attributable to decreases in Defense and Intelligence and Federal Civilian, partially offset by increases in National Security and other clients.

Gross margin for the second quarter of 2026 was 28.3 percent, a compression of 40 basis points from the second quarter of 2025. Gross margin for the Commercial Segment was 32.1 percent, down 90 basis points year-over-year primarily driven by a lower mix of high-margin permanent placement revenues, as well as changes in foreign exchange rates primarily related to our delivery center in Mexico. Gross margin for the Federal Government Segment was 19.6 percent, up 40 basis points year over year, driven by focused efforts to improve profitability across the contract portfolio.

Selling, general, and administrative (“SG&A”) expenses were $226.2 million, compared with $216.8 million in the prior-year period. SG&A expenses included $9.8 million in acquisition, integration, and strategic planning expenses, compared with $8.3 million in the prior-year period.

Net income was $14.2 million ($0.35 per diluted share), compared with $29.3 million ($0.67 per diluted share) in the second quarter of 2025.

Adjusted EBITDA (a non-GAAP measure) was $96.7 million, or 9.6 percent of revenues ("Adjusted EBITDA margin," a non-GAAP measure), compared with $108.5 million or 10.6 percent of revenues in the second quarter of 2025.

Capital Resources and Allocation

At June 30, 2026, the Company had:

Cash and cash equivalents of $152.9 million
Availability of approximately $180.0 million under the Company's $500.0 million Senior Secured Revolving Credit Facility (due 2028)
Senior Secured Debt, consisting of a Term Loan A facility with outstanding balance of $97.5 million (due 2028) and a Term Loan B facility with outstanding balance of $486.3 million (due 2030)
Senior unsecured notes totaling $550.0 million at 4.625 percent (due 2028)

During the quarter the Company repurchased 0.4 million shares of its common stock for $11.5 million at an average price of $30.07 per share. Approximately $923 million remained available at quarter end for repurchases under the Company's stock repurchase plan. Subsequent to the quarter end, in July the Company completed the refinancing and upsizing of its revolver, replacing the previous revolver and Term Loan A with a new five-year $600 million revolving facility.

Third Quarter 2026 Financial Estimates

The Company's financial estimates for the third quarter of 2026, which are set forth below, are based on current market conditions and assume no deterioration in the markets served. Reconciliations of estimated net income to the estimated non-GAAP financial measures are included in the tables that accompany this release.

(In millions, except per share data)	Low		High
Revenues		$994.0		$1,024.0
SG&A expenses		220.4		221.9
Amortization of intangible assets		17.3		17.3
Net income		14.5		23.0
Earnings per diluted share		$0.36		$0.56
Gross margin	28.0%		28.5%
Effective tax rate	29.0%		29.0%
Non-GAAP Financial Measures:
Adjusted EBITDA		$95.0		$105.0
Adjusted Net Income		$37.8		$44.8
Adjusted Net Income per diluted share		$0.92		$1.10
Adjusted EBITDA margin	9.6%		10.3%

Includes non-cash expenses totaling $27.2 million, comprised of: (i) $14.0 million of stock-based compensation, (ii) $10.1 million of depreciation, and (iii) $3.1 million of amortization related to capitalized cloud-based application implementation costs. Also includes acquisition, integration, and strategic planning expenses of approximately $7.5 million to $9.5 million, related to strategic initiatives including updates to our go-to market strategy, outsourcing of certain back-office functions, ERP implementation, and costs related to the integration of Quinnox.

Estimated effective tax rate before any excess tax benefits or shortfall related to stock-based compensation.

Does not include the cash tax savings benefit of the tax deduction received from the amortization of goodwill and trademarks, approximately $9.6 million per quarter ($0.24 per diluted share).

Conference Call

The Company will hold a conference call today at 4:30 p.m. ET to review its financial results for the second quarter of 2026 and to provide third quarter 2026 estimates. The dial-in number is 877-407-0792 (+1-201-689-8263), and the conference ID number is 13760713. Participants should dial in ten minutes before the call. The prepared remarks, supplemental materials and webcast for this call can be accessed at www.everforth.com.

A replay of the conference call will be available beginning today at 7:30 p.m. ET until August 12, 2026. The access number for the replay is 844-512-2921 (+1-412-317-6671) and the conference ID number is 13760713. A replay of the webcast will be available at www.everforth.com.

About Everforth, Inc.

Everforth, Inc. (NYSE: EFOR) is a leading technology and digital engineering company with six core solution areas: AI and data, cloud and infrastructure, application and digital engineering, customer experience, cybersecurity, and enterprise platforms. Through proprietary assets, accelerators, and proven expertise, Everforth delivers measurable outcomes that help organizations adapt, innovate, and thrive.

Everforth: Adapt and Thrive.TM

Learn more at everforth.com.

Safe Harbor

Certain statements made in this news release are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and involve a high degree of risk and uncertainty. Forward-looking statements include statements regarding our anticipated financial and operating performance.

Forward-looking statements notice

All statements in this news release, other than those setting forth strictly historical information, are forward-looking statements. Forward-looking statements are not guarantees of future performance and actual results might differ materially. In particular, we make no assurances that the proposed revenue, expense, and profit estimates outlined above will be achieved. Additional examples of forward-looking statements in this press release include, without limitation, statements regarding our ability to attract, train, and retain qualified internal employees, the availability of qualified billable professionals, management of our growth, continued performance and improvement of our enterprise-wide information systems, our ability to successfully adapt to, integrate, and leverage new and developing technologies, including generative artificial intelligence, our ability to manage our litigation matters, the successful integration of acquisitions, and other risks detailed from time-to-time in our reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on February 25, 2026. We specifically disclaim any intention or duty to update any forward-looking statements contained in this news release.

CONSOLIDATED SELECTED FINANCIAL DATA (Unaudited)

	Three Months Ended							Six Months Ended
June 30,					March 31,			June 30,
		2026		2025			2026		2026		2025
Results of Operations:
Revenues	$1,007.0		$1,020.6			$968.3		$1,975.3		$1,988.9
Costs of services	722.4		727.3			701.7		1,424.1		1,420.2
Gross profit	284.6		293.3			266.6		551.2		568.7
Selling, general, and administrative expenses	226.2		216.8			224.4		450.6		431.3
Amortization of intangible assets	17.3		16.9			14.5		31.8		31.2
Operating income	41.1		59.6			27.7		68.8		106.2
Interest expense	(20.4)		(18.2)			(17.1)		(37.5)		(33.6)
Income before income taxes	20.7		41.4			10.6		31.3		72.6
Provision for income taxes	6.5		12.1			5.1		11.6		22.4
Net income	$14.2		$29.3			$5.5		$19.7		$50.2
Earnings per share:
Basic	$0.35		$0.67			$0.13		$0.48		$1.15
Diluted	$0.35		$0.67			$0.13		$0.48		$1.14
Number of shares and share equivalents used to calculate earnings per share:
Basic	41.0		43.8			41.3		41.2		43.8
Diluted	41.0		44.0			41.4		41.2		44.0

CONSOLIDATED SELECTED FINANCIAL DATA (Continued) (Unaudited)

(In millions)

	Three Months Ended					Six Months Ended
	June 30,				March 31,	June 30,
	2026		2025		2026	2026	2025
Summary Statements of Cash Flow Data:
Cash provided by operating activities	$52.2		$124.9		$18.5	$70.7	$141.7
Cash used in investing activities	(5.9)		(9.1)		(293.0)	(298.9)	(325.4)
Cash provided by (used in) financing activities	(37.3)		(84.9)		257.6	220.3	116.3
Reconciliation of GAAP to Non-GAAP Measure:
Cash provided by operating activities	$52.2		$124.9		$18.5	$70.7	$141.7
Capital expenditures	(5.9)		(9.1)		(9.4)	(15.3)	(19.3)
Free Cash Flow (non-GAAP measure)	$46.3		$115.8		$9.1	$55.4	$122.4
	June 30,		December 31,
		2026		2025
Summary Balance Sheet Data:
Cash and cash equivalents	$152.9		$161.2
Working capital	523.2		491.9
Goodwill and intangible assets, net	2,876.0		2,597.0
Total assets	4,023.5		3,677.3
Long-term debt	1,438.1		1,169.4
Total liabilities	2,218.4		1,873.3
Total stockholders’ equity	1,805.1		1,804.0

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (Unaudited)

	Three Months Ended			Six Months Ended
	June 30,		March 31,	June 30,
	2026	2025	2026	2026	2025
Net income	$14.2	$29.3	$5.5	$19.7	$50.2
Interest expense	20.4	18.2	17.1	37.5	33.6
Provision for income taxes	6.5	12.1	5.1	11.6	22.4
Depreciation and other amortization	13.9	11.8	13.5	27.4	23.0
Amortization of intangible assets	17.3	16.9	14.5	31.8	31.2
EBITDA (non-GAAP measure)	72.3	88.3	55.7	128.0	160.4
Stock-based compensation	14.6	11.9	15.1	29.7	25.7
Software costs write-off	-	-	-	-	4.4
Acquisition, integration, and strategic planning expenses	9.8	8.3	12.8	22.6	11.6
Adjusted EBITDA (non-GAAP measure)	$96.7	$108.5	$83.6	$180.3	$202.1

	Three Months Ended			Six Months Ended
	June 30,		March 31,	June 30,
	2026	2025	2026	2026	2025
Net income	$14.2	$29.3	$5.5	$19.7	$50.2
Software costs write-off	-	-	-	-	4.4
Acquisition, integration, and strategic planning expenses	9.8	8.3	12.8	22.6	11.6
Tax effect on adjustments	(2.5)	(2.2)	(3.3)	(5.8)	(4.1)
Non-GAAP net income	21.5	35.4	15.0	36.5	62.1
Amortization of intangible assets	17.3	16.9	14.5	31.8	31.2
Other	(1.6)	(0.7)	(0.8)	(2.4)	(1.3)
Adjusted Net Income (non-GAAP measure)	$37.2	$51.6	$28.7	$65.9	$92.0
Per diluted share:
Net income	$0.35	$0.67	$0.13	$0.48	$1.14
Adjustments	0.56	0.50	0.56	1.12	0.95
Adjusted Net Income (non-GAAP measure)	$0.91	$1.17	$0.69	$1.60	$2.09
Common shares and share equivalents (diluted)	41.0	44.0	41.4	41.2	44.0

The three months ended June 30, 2026 include $2.6 million of amortization related to capitalized cloud-based application implementation costs included in SG&A expenses.

Write-off of previously capitalized costs related to software enhancements that will no longer be placed into service.

The three months ended June 30, 2026 include costs related to strategic initiatives including updates to our go-to market strategy, outsourcing of certain back-office functions, ERP implementation, and costs related to the integration of Quinnox.

Does not include the cash tax savings benefit of the tax deduction received for the amortization of goodwill and trademarks of approximately $9.6 million per quarter ($0.23 per diluted share).

FINANCIAL ESTIMATES FOR THE THIRD QUARTER OF 2026

RECONCILIATIONS OF ESTIMATED GAAP TO NON-GAAP MEASURES

	Low	High
Net income	$14.5	$23.0
Interest expense	20.2	20.2
Provision for income taxes	5.9	9.4
Depreciation and other amortization	13.6	13.6
Amortization of intangible assets	17.3	17.3
EBITDA (non-GAAP measure)	71.5	83.5
Stock-based compensation	14.0	14.0
Acquisition, integration, and strategic planning expenses	9.5	7.5
Adjusted EBITDA (non-GAAP measure)	$95.0	$105.0

	Low	High
Net income	$14.5	$23.0
Acquisition, integration, and strategic planning expenses	9.5	7.5
Credit facility amendment expenses	0.6	0.6
Tax effect on adjustments	(2.5)	(2.0)
Non-GAAP net income	22.1	29.1
Amortization of intangible assets	17.3	17.3
Other	(1.6)	(1.6)
Adjusted Net Income (non-GAAP measure)	$37.8	$44.8
Per diluted share:
Net income	$0.36	$0.56
Adjustments	0.56	0.54
Adjusted Net Income (non-GAAP measure)	$0.92	$1.10

Does not include acquisition, integration, and strategic planning expenses, or excess tax benefits or shortfall related to stock-based compensation.

Comprised of (i) $10.1 million of depreciation included in SG&A expenses, (ii) $3.1 million of amortization related to capitalized cloud-based application implementation costs included in SG&A expenses, and (iii) $0.4 million of depreciation included in costs of services.

Includes costs related to strategic initiatives including updates to our go-to market strategy, outsourcing of certain back-office functions, ERP implementation, and costs related to the integration of Quinnox.

Does not include the cash tax savings benefit of the tax deduction received from the amortization of goodwill and trademarks, approximately $9.6 million per quarter ($0.24 per diluted share).

Non-GAAP Financial Measures

Statements in this release include financial information presented in accordance with accounting principles generally accepted in the United States ("GAAP") and also include non-GAAP financial measures that are provided as additional information to enhance the overall understanding of the Company's current financial performance and not as an alternative to the consolidated interim financial statements presented in accordance with GAAP. Management uses these non-GAAP measures (earnings before interest, taxes, depreciation, and amortization ("EBITDA"), Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow, and Revenues on a same Billable Days basis) to evaluate the Company's financial performance. These terms might not be calculated in the same manner as, and thus might not be comparable to, similarly titled measures reported by other companies. The financial information tables that accompany this press release include reconciliations of net income to non-GAAP financial measures.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin provide a measure of the Company's operating results in a manner that is focused on the performance of the Company's core business on an ongoing basis, by removing the effects of non-operating and certain non-cash expenses. These non-operating and non-cash items are specifically identified in the reconciliations of GAAP measures to Non-GAAP measures that accompany this release.

Adjusted Net Income provides a method for assessing the Company's operating results in a manner that is focused on the performance of the Company's core business on an ongoing basis by removing the effects of non-operating and certain non-cash expenses on a net of tax basis. The metric is not adjusted by the benefit of the tax deduction associated with the amortization of acquired definite-lived intangible assets as these cash tax savings appropriately reflect the performance of the Company's acquisitions.

Free Cash Flow provides useful information to investors about the amount of cash generated by the business that can be used for strategic opportunities and is computed as presented in the tables that accompany this release.

IT Consulting Metrics

Commercial IT consulting book-to-bill ratio represents the ratio of consulting bookings to related revenues for a specified period. Commercial IT consulting accounts for approximately 50 percent of the segment’s revenues and has increased as a proportion of the segment’s revenues over time. Bookings represent the value of new contracts entered into during the period, including adjustments for changes in contract scope and contract terminations. Measuring bookings involves the use of estimates and judgments and there are no independent standards or requirements governing the calculation of bookings. There is no assurance these bookings will result in future revenues.

Federal Government Segment new contract awards are defined as the estimated amount of future revenues to be recognized under contracts awarded during a specified period, including adjustments to estimates for contracts awarded in previous periods. The book-to-bill ratio for the Federal Government Segment is the ratio of New Contract Awards to revenues for a specified period. There is no assurance our new contract awards will result in future revenues.

Contacts
Kimberly Esterkin
Vice President, Investor Relations kimberly.esterkin@everforth.com