Three Months Ended

March 31,

2025

2024

Amortization of intangible assets

$

2,036

$

1,690

Restructuring charges

$

1,338

$

2,337

Other losses

$

—

$

1,568

Transaction-related expenses

$

1,296

$

1,497

Unrealized loss on preferred stock investment⁽⁷⁾

$

4,210

$

—

Tax effect of adjustments

$

(2,309

)

$

(1,844

)

Foreign currency transaction losses (gains), net

$

399

$

(465

)

HURON CONSULTING GROUP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

March 31,

2025

2024

Revenues:

Revenues before reimbursable expenses

$

395,690

$

355,961

Reimbursable expenses

8,451

7,424

Total revenues

404,141

363,385

Operating expenses:

Direct costs (exclusive of depreciation and amortization included below)

278,043

253,303

Reimbursable expenses

8,445

7,584

Selling, general and administrative expenses

76,634

72,700

Other losses

—

1,568

Restructuring charges

1,338

2,337

Depreciation and amortization

6,949

5,972

Total operating expenses

371,409

343,464

Operating income

32,732

19,921

Other income (expense), net:

Interest expense, net of interest income

(5,647

)

(5,140

)

Other income (expense), net

(5,633

)

2,779

Total other expense, net

(11,280

)

(2,361

)

Income before taxes

21,452

17,560

Income tax benefit

(3,084

)

(446

)

Net income

$

24,536

$

18,006

Earnings per share:

Net income per basic share

$

1.38

$

0.99

Net income per diluted share

$

1.33

$

0.95

Weighted average shares used in calculating earnings per share:

Basic

17,821

18,196

Diluted

18,475

18,943

Comprehensive income (loss):

Net income

$

24,536

$

18,006

Foreign currency translation adjustments, net of tax

535

(722

)

Unrealized loss on investment, net of tax

(10,517

)

(1,447

)

Unrealized gain (loss) on cash flow hedging instruments, net of tax

(2,233

)

1,073

Other comprehensive loss

(12,215

)

(1,096

)

Comprehensive income

$

12,321

$

16,910

HURON CONSULTING GROUP INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

March 31,
2025

December 31,
2024

Assets

Current assets:

Cash and cash equivalents

$

23,378

$

21,911

Receivables from clients, net

200,934

197,771

Unbilled services, net

180,808

160,017

Income tax receivable

6,618

1,355

Prepaid expenses and other current assets

28,236

28,063

Total current assets

439,974

409,117

Property and equipment, net

21,125

21,678

Deferred income taxes, net

2,548

2,546

Long-term investments

51,309

69,712

Operating lease right-of-use assets

17,728

19,176

Other non-current assets

118,623

116,569

Intangible assets, net

27,350

26,076

Goodwill

684,909

678,743

Total assets

$

1,363,566

$

1,343,617

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

19,754

$

11,539

Accrued expenses and other current liabilities

28,764

26,768

Accrued payroll and related benefits

108,702

247,579

Current maturities of long-term debt

13,750

13,750

Current maturities of operating lease liabilities

12,501

12,315

Deferred revenues

28,022

26,869

Total current liabilities

211,493

338,820

Non-current liabilities:

Deferred compensation and other liabilities

44,828

42,481

Long-term debt, net of current portion

561,511

342,857

Operating lease liabilities, net of current portion

27,217

29,686

Deferred income taxes, net

24,233

28,446

Total non-current liabilities

657,789

443,470

Commitments and contingencies

Stockholders’ equity

Common stock; $0.01 par value; 500,000,000 shares authorized; 20,901,686 and 20,780,928 shares issued, respectively

208

208

Treasury stock, at cost, 3,272,043 and 3,065,633 shares, respectively

(189,279

)

(160,093

)

Additional paid-in capital

127,495

177,673

Retained earnings

556,189

531,653

Accumulated other comprehensive income (loss)

(329

)

11,886

Total stockholders’ equity

494,284

561,327

Total liabilities and stockholders’ equity

$

1,363,566

$

1,343,617

HURON CONSULTING GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Three Months Ended

March 31,

2025

2024

Cash flows from operating activities:

Net income

$

24,536

$

18,006

Adjustments to reconcile net income to cash flows from operating activities:

Depreciation and amortization

6,949

5,972

Non-cash lease expense

1,437

1,544

Lease-related impairment charges

738

849

Share-based compensation

15,358

13,949

Amortization of debt discount and issuance costs

286

223

Allowances for doubtful accounts

272

16

Deferred income taxes

259

602

Change in fair value of contingent consideration liabilities

—

516

Change in fair value of preferred stock investment

4,210

—

Changes in operating assets and liabilities, net of acquisitions:

(Increase) decrease in receivables from clients, net

(2,879

)

(51,116

)

(Increase) decrease in unbilled services, net

(20,617

)

18,097

(Increase) decrease in current income tax receivable / payable, net

(5,668

)

(3,363

)

(Increase) decrease in other assets

170

(5,008

)

Increase (decrease) in accounts payable and other liabilities

1,017

4,437

Increase (decrease) in accrued payroll and related benefits

(132,731

)

(132,290

)

Increase (decrease) in deferred revenues

(164

)

(3,158

)

Net cash used in operating activities

(106,827

)

(130,724

)

Cash flows from investing activities:

Purchases of property and equipment

(1,850

)

(1,192

)

Investments in life insurance policies

(1,722

)

(806

)

Purchases of businesses, net of cash acquired

(5,190

)

(21,150

)

Capitalization of internally developed software costs

(6,679

)

(7,605

)

Proceeds from note receivable

154

154

Net cash used in investing activities

(15,287

)

(30,599

)

Cash flows from financing activities:

Proceeds from exercises of stock options

2,527

1,167

Shares redeemed for employee tax withholdings

(32,181

)

(20,927

)

Share repurchases

(65,310

)

(60,998

)

Proceeds from bank borrowings

328,000

566,000

Repayments of bank borrowings

(109,438

)

(316,000

)

Payments for debt issuance costs

—

(1,383

)

Deferred payment on business acquisition

(36

)

—

Net cash provided by financing activities

123,562

167,859

Effect of exchange rate changes on cash

19

(43

)

Net increase in cash and cash equivalents

1,467

6,493

Cash and cash equivalents at beginning of the period

21,911

12,149

Cash and cash equivalents at end of the period

$

23,378

$

18,642

HURON CONSULTING GROUP INC.

SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA

(Unaudited)

Three Months Ended

March 31,

Percent

Increase

(Decrease)

Segment and Consolidated Operating Results (in thousands):

2025

2024

Healthcare:

Revenues before reimbursable expenses

$

198,490

$

180,742

9.8

%

Operating income

$

56,316

$

42,694

31.9

%

Segment operating margin

28.4

%

23.6

%

Education:

Revenues before reimbursable expenses

$

122,748

$

111,583

10.0

%

Operating income

$

23,060

$

21,956

5.0

%

Segment operating margin

18.8

%

19.7

%

Commercial:

Revenues before reimbursable expenses

$

74,452

$

63,636

17.0

%

Operating income

$

11,296

$

14,039

(19.5

)%

Segment operating margin

15.2

%

22.1

%

Total Huron:

Revenues before reimbursable expenses

$

395,690

$

355,961

11.2

%

Reimbursable expenses

8,451

7,424

13.8

%

Total revenues

$

404,141

$

363,385

11.2

%

Items not allocated at the segment level:

Unallocated corporate expenses

52,371

50,939

2.8

%

Other losses

—

1,568

N/M

Restructuring charges

1,392

2,233

(37.7

)%

Depreciation and amortization

4,177

4,028

3.7

%

Operating income

32,732

19,921

64.3

%

Other expense, net

(11,280

)

(2,361

)

N/M

Income before taxes

$

21,452

$

17,560

22.2

%

Other Operating Data:

Number of revenue-generating professionals by segment (at period end)⁽¹⁾:

Healthcare

1,209

1,192

1.4

%

Education

1,167

1,099

6.2

%

Commercial⁽²⁾

2,350

2,293

2.5

%

Total (excluding Managed Services)

4,726

4,584

3.1

%

Managed Services⁽³⁾

1,679

1,219

37.7

%

Total

6,405

5,803

10.4

%

Revenues before reimbursable expenses by capability:

Consulting and Managed Services⁽⁴⁾

$

223,921

$

201,559

11.1

%

Digital

171,769

154,402

11.2

%

Total

$

395,690

$

355,961

11.2

%

Number of revenue-generating professionals by capability (at period end)⁽¹⁾:

Consulting

1,726

1,672

3.2

%

Managed Services⁽³⁾

1,679

1,219

37.7

%

Digital

3,000

2,912

3.0

%

Total

6,405

5,803

10.4

%

Utilization rate by capability⁽⁵⁾:

Consulting

74.1

%

70.2

%

Digital

78.2

%

74.3

%

(1)

Consists of our full-time consultants who generate revenues based on the number of hours worked; full-time equivalents, which consists of coaches and their support staff within the culture and organizational excellence solution, consultants who work variable schedules as needed by clients, and full-time employees who provide software support and maintenance services to clients; and our Managed Services professionals who provide revenue cycle management and research administration managed services and outsourcing at our healthcare, education and research-focused clients.

(2)

The majority of our revenue-generating professionals within our Commercial segment can provide services across all of our industries, including healthcare and education, and the related costs of these professionals are allocated to each of the segments.

(3)

We have separately presented the total number of revenue-generating professionals within our Managed Services capabilities of our Healthcare and Education segments. Our Healthcare Managed Services professionals provide revenue cycle billing, collections, insurance verification and change integrity services to clients. Our Education Managed Services professionals provide research administration managed services and outsourcing at our education and research-focused clients.

The number of Managed Services professionals within our Healthcare segment was 1,568 and 1,087 as of March 31, 2025 and 2024, respectively.

The number of Managed Services professionals within our Education segment was 111 and 132 as of March 31, 2025 and 2024, respectively.

(4)

Managed Services capability revenues before reimbursable expenses within our Healthcare segment was $18.3 million and $17.5 million for the three months ended March 31, 2025 and 2024, respectively.

Managed Services capability revenues before reimbursable expenses within our Education segment was $7.4 million for both the three months ended March 31, 2025 and 2024.

(5)

Utilization rate is calculated by dividing the number of hours our billable consultants worked on client assignments during a period by the total available working hours for these billable consultants during the same period. Available working hours are determined by the standard hours worked by each billable consultant, adjusted for part-time hours, and U.S. standard work weeks. Available working hours exclude local country holidays and vacation days. Utilization rates are presented for our revenue-generating professionals who primarily bill on an hourly basis. We have not presented utilization rates for our Managed Services professionals as most of the revenues generated by these employees are not billed on an hourly basis.

HURON CONSULTING GROUP INC.

RECONCILIATION OF NET INCOME

TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION⁽⁶⁾

(In thousands)

(Unaudited)

Three Months Ended

March 31,

2025

2024

Revenues before reimbursable expenses

$

395,690

$

355,961

Reimbursable expenses

8,451

7,424

Total revenues

$

404,141

$

363,385

Net income

$

24,536

$

18,006

Net income as a percentage of total revenues

6.1

%

5.0

%

Add back:

Income tax benefit

(3,084

)

(446

)

Interest expense, net of interest income

5,647

5,140

Depreciation and amortization

7,149

6,181

Earnings before interest, taxes, depreciation and amortization (EBITDA)⁽⁶⁾

34,248

28,881

Add back:

Restructuring charges

1,338

2,337

Other losses

—

1,568

Transaction-related expenses

1,296

1,497

Unrealized loss on preferred stock investment⁽⁷⁾

4,210

—

Foreign currency transaction losses (gains), net

399

(465

)

Adjusted EBITDA⁽⁶⁾

$

41,491

$

33,818

Adjusted EBITDA as a percentage of revenues before reimbursable
expenses⁽⁶⁾

10.5

%

9.5

%

HURON CONSULTING GROUP INC.

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME⁽⁶⁾

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended

March 31,

2025

2024

Net income

$

24,536

$

18,006

Weighted average shares - diluted

18,475

18,943

Diluted earnings per share

$

1.33

$

0.95

Add back:

Amortization of intangible assets

2,036

1,690

Restructuring charges

1,338

2,337

Other losses

—

1,568

Transaction-related expenses

1,296

1,497

Unrealized loss on preferred stock investment⁽⁷⁾

4,210

—

Tax effect of adjustments

(2,309

)

(1,844

)

Total adjustments, net of tax

6,571

5,248

Adjusted net income⁽⁶⁾

$

31,107

$

23,254

Adjusted weighted average shares - diluted

18,475

18,943

Adjusted diluted earnings per share⁽⁶⁾

$

1.68

$

1.23

(6)

In evaluating the company’s financial performance and outlook, management uses earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA, adjusted EBITDA as a percentage of revenues before reimbursable expenses, adjusted net income, and adjusted diluted earnings per share, which are non-GAAP measures. Management uses these non-GAAP financial measures to gain an understanding of the company's comparative operating performance (when comparing such results with previous periods or forecasts). These non-GAAP financial measures are used by management in their financial and operating decision making because management believes they reflect the company's ongoing business in a manner that allows for meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing the company's business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. Management believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Huron’s current operating performance and future prospects in the same manner as management does, if they so choose, and in comparing in a consistent manner Huron’s current financial results with Huron’s past financial results. Investors should recognize that these non-GAAP measures might not be comparable to similarly titled measures of other companies. These measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flows or liquidity prepared in accordance with accounting principles generally accepted in the United States.

(7)

In the first quarter of 2025, the company recognized a non-cash impairment loss of $4.2 million on its preferred stock investment in a hospital-at-home company.