And so we can, if you will, work backwards from that. And we measure and know that we have certain opportunities that we could immediately begin to sell. So that is the premise. That remains the premise, and it will remain important as we go forward. I think we’re in a moment here where, especially in the commercial market, where you’re just not seeing many, if any, real quality assets come to market. And it’s for all kinds of reasons, you know, there’s a pause here in IT spending to a large degree. I think these companies are able to hang on here for a little while longer. They’re not willing to reset their expectations down in terms of valuation with maybe where market valuations are. It’s not just one thing. It’s a combination of all those things, if you will.
So in the meantime, as Marie mentioned, resetting our share repurchase authorization, and we sized it like we normally do. We looked out two years. It’s about two years worth of free cash flow. And right now our head is to, while there’s not any meaningful M&A opportunities to continue to dedicate quarterly free cash flow to repurchases, because this is a very attractive valuation point. And so more of the same, if you will, from where we’ve been in the last few quarters.
Heather Balsky: Thank you. That’s really helpful. Thanks very much.
Operator: Thank you. Our next question comes from the line of Tobey Sommer with Truist Securities. Please proceed with your question.
Tobey Sommer: Thanks. If you look at forecasting the business, for example, your guidance or so forth, is it easier or harder than it was three or six months ago? And maybe could you comment across the business segments in that regard?
Theodore Hanson: Well, look, Tobey, I guess I wouldn’t say it’s any more difficult. I’m kind of looking around the room here that it was through or six months ago. If you go back years ago, several years ago, when we didn’t have as large a footprint in consulting, I would say it was a little more difficult to forecast because on the IT staffing side of the business, that kind of comes in shorter increments. Volumes can kind of quickly move up and down on you. But in consulting, when you win a booking in commercial and you know you’re going to work it over the next 12 to 18 months, you have really good certainty in that. And in federal, you have really good certainty when you win things that you’re going to be working it for the next five years.
So I think over the long haul, forecasting in the business has improved. We’ve gotten better visibility and transparency. We have more confidence in the bookings that, in our backlog. And so that’s played itself out. I would say in the last two or three quarters hasn’t been too much change. I mean, we’ve gotten, you know, a little more in one area than we’ve expected or a little less in commercial and federal has played out about like we thought. And really the only variable there. Sometimes we get a few million more in maybe licenses that are part of our solution, that we expected one quarter and it came in another. But that’s just incremental stuff around the edges, if you will.
Tobey Sommer: Make sense. Thanks. With respect to the commercial IT consulting, what is the mix of full time versus flexible labor stand today, and how does that compare? Choose one or two reference points from the past, maybe, and let us know where you sit today, because one of the strategies of the company is to lean more heavily on flexible…
Theodore Hanson: Yeah. So we pretty consistently seen and said that of the, of the projects that we’re working within our commercial consulting business, about 80% to 85% of it is contingent IT labor from our IT staffing capabilities, and about 15 to 20 at any one time is subject matter expertise with industry experience that we have in house, plus our nearshore delivery center in Guadalajara [ph] Mexico.
Tobey Sommer: And I wanted to follow up on the capital allocation question in share repurchase. It’s just down to this lethargic it spending environment. Doesn’t last too much longer, meaning more than four or five quarters more. How do you go through the analysis of kind of husbanding a little cash to have more dry powder to make acquisitions of consequence when the market is more fertile [ph] and I guess your announced share repurchase is not a commitment to repurchase that stock. And you could kind of slow it down if the environment improves and you see those opportunities. Can you speak to that a little?
Theodore Hanson: Yeah, I think that last part is the key, Tobey. I mean, we’ve got, when we see the pipeline still with M&A opportunities to evaluate, we’ve got plenty of time to toggle what we’re doing on a share repurchase standpoint. And also, if you’ve noticed, we’ve, although we desire to spend a quarter of free cash flow, except in the last quarter, we’ve had a hard time kind of getting there, if you will, just because we’re purchasing in a very programmatic way. So we’ve been building some cash on the balance sheet. The last piece here is we’ve got plenty of room for leverage in order to bulk up and do a, what, I’ll say a much more sizable acquisition. We’ve got great support from our banking partners, and I think if you look at our net leverage, which is now about 177, we have many times in the past levered up to about 3.8 times total debt to EBITDA in order to get an acquisition done.
And so that leaves you with about two turns beyond where we are now, and that’s really without even counting their EBITDA that they might contribute. So I think we’ve got the firepower here to do anything that we feel we need to do, and we would like to do acquisitions that still fit the same pattern that we’ve been doing in terms of capabilities that we can pull across our current account portfolio. But if it were a little bit larger scale, that would be a good thing.
Tobey Sommer: Thank you very much, Theodore.
Operator: Thank you. Our next question comes from the line of Mark Marson [ph] with Baird. Please proceed with your question.
Unidentified Analyst: Hey, good afternoon, and thanks for taking my questions. So, Ted and Rand, I’m kind of curious, when you talk to your clients and we’re hearing the same consistent message across the space about the budgets are there, but they’re still waiting. It probably varies by client and by specific elements, but are you getting a sense for exactly what they’re waiting for? Is it something that’s specific to their company and this feeling like level of confidence that they’re going to make their budget forecasts? Is it something from a macro perspective in terms of interest rates? Is there a concern that, hey, we haven’t had a recession yet, but we’ve got an inverted yield curve, so perhaps that could occur? I’m just wondering what the trigger would be that would lead to some improvement with regards to the confidence to spend.
Theodore Hanson: Randy, you want to try that one and I’ll jump in…
Randolph Blazer: Yeah, let me, yeah, Mark, let me start. First of all, very senior clients, we typically avoid the conversation because they’re not going to say anything anyway. But when you get down in the trenches to the technical managers who are assigned responsibility for these projects, we do hear a lot of our clients saying we’re going to open up and they’ll lay out a date in the third quarter or at the end of the year or, this is important. We’re going to move on this, but we’re going to chunk it up a little bit and kind of go slow, which we’ve said in the past. So at the technical manager, at the execution level, there is a sense of, in that population of that there is a day coming when they’re going to have more latitude.
But it’s, there’s no reason given for why that is. I mean, look, we know what we have booked. We know what the projects that are in play are, how they’re playing out, if you will, even if they’re stretching out or slowing down. We do know what their it initiatives are that they want to get done, that they have stacked up in their budget once money gets released. And this is federal or commercial. Okay. What we don’t know is that the federal procurement officials are very slow at getting money out. Not sure why. Is that something coming from high on administration? Is that coming because of continued resolution? Is it coming because they’re worried about having to save or reposition money for aid to foreign, foreign countries? You know, don’t know.
On the commercial side, you can go through the same thing, what that buyer behavior, that trigger. Don’t know what comes down, but we do get a sense that they’re coming. Okay. It’s coming. So, Ted, anything you want to add to that?
Theodore Hanson: Yeah, I would just as one of those people who’s watching this and moderating our own IT spend, Mark, I would say all three matter, right? I mean, I think as we, we have ambition to invest harder in our own IT, we’re certainly going at the most critical things, but we’re worried about where the economy may be going for all the reasons that you just said. We’re worried about our own bottom line and that we do a good job of finding a balance here in terms of continuing to invest versus performing at a level we would expect to on the bottom line. And so I think all three of the things that you said matter.
Unidentified Analyst: I appreciate the color. And then one thing that was really interesting was the discussion around the Databricks project that you had for a large oil and gas company. Can you talk a little bit about, you know, what sort of premium pricing you’re able to get? How attractive are those? We’re obviously hearing a lot about those sorts of things just starting up. I’m wondering how big that could, that sort of practice could end up becoming?
Theodore Hanson: Yeah, you want to talk about our data practice, Rand, what…
Randolph Blazer: Yeah, Mark, I think, look, if you look at our things we’ve talked about over the past year, we’ve made a hefty play with ServiceNow, with Databricks, Databricks technology, Snowflake, certainly the cloud providers, both Microsoft and Amazon and Google. So it’s — and Salesforce. So we’re watching those technologies. They seem to be the hottest technologies. We want to be in position to support them in certain industries where money is flowing, or maybe it’s by necessity, like healthcare. You know, we reported that our healthcare business is doing fine quarter after quarter after quarter. Well, some of that is they need the technology. These are technologies that play in their world and part of it is because the baby boomers are aging, right.
And putting a greater demand on our healthcare system. So, I mean, you can see, you can see certain things unfolding. It’s interesting that we see telecommunications and we know what they’re going through between the cable fight and streaming services and how they’re positioning for greater volume. There’s work there. There’s work in which the streaming services have to be in a position to pick up at huge volumes with certain pricing. And Ted and I have even commented that technology and telecommunications sort of led us into this problem over a year ago, and now they seem to be coming out of it a little bit. And we’ve mentioned them, featured them in our text [ph] banks. Different questions, different story. So, Mark, I guess I’m just trying to give you some sense of what we’re watching, same as everybody else.
