Huron Consulting(HURN) - 2025 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (Unaudited) Huron's unaudited Q1 2025 and 2024 consolidated financial statements, including core statements and detailed notes Consolidated Balance Sheets Consolidated Balance Sheets | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Assets | | | | Total current assets | $439,974 | $409,117 | | Total assets | $1,363,566 | $1,343,617 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $211,493 | $338,820 | | Total non-current liabilities | $657,789 | $443,470 | | Total stockholders' equity | $494,284 | $561,327 | | Total liabilities and stockholders' equity | $1,363,566 | $1,343,617 | - Total assets increased by $19.9 million from December 31, 2024, to March 31, 2025, primarily driven by increases in receivables from clients and unbilled services[8] - Total current liabilities decreased significantly by $127.3 million, mainly due to a large reduction in accrued payroll and related benefits[8] Consolidated Statements of Operations and Other Comprehensive Income (Loss) Consolidated Statements of Operations and Other Comprehensive Income (Loss) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :----------- | | Revenues before reimbursable expenses | $395,690 | $355,961 | +11.2% | | Total revenues | $404,141 | $363,385 | +11.2% | | Operating income | $32,732 | $19,921 | +64.3% | | Income before taxes | $21,452 | $17,560 | +22.2% | | Net income | $24,536 | $18,006 | +36.3% | | Net income per basic share | $1.38 | $0.99 | +39.4% | | Net income per diluted share | $1.33 | $0.95 | +40.0% | | Comprehensive income | $12,321 | $16,910 | -27.1% | - Operating income saw a substantial increase of 64.3% year-over-year, indicating improved operational efficiency[10] - Comprehensive income decreased by 27.1% primarily due to a significant unrealized loss on investment and unrealized loss on cash flow hedging instruments in 2025[10] Consolidated Statements of Stockholders' Equity Consolidated Statements of Stockholders' Equity | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Stockholders' Equity | $494,284 | $561,327 | | Retained Earnings | $556,189 | $531,653 | | Treasury Stock, at cost | $(189,279) | $(160,093) | | Accumulated Other Comprehensive Income (Loss) | $(329) | $11,886 | - Total stockholders' equity decreased by $67.0 million, primarily driven by share repurchases and a significant decrease in accumulated other comprehensive income (loss)[12] - The company repurchased 508,611 shares for $72.9 million during the three months ended March 31, 2025[12] Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash used in operating activities | $(106,827) | $(130,724) | | Net cash used in investing activities | $(15,287) | $(30,599) | | Net cash provided by financing activities | $123,562 | $167,859 | | Net increase in cash and cash equivalents | $1,467 | $6,493 | | Cash and cash equivalents at end of period | $23,378 | $18,642 | - Net cash used in operating activities decreased by $23.9 million, primarily due to increased cash collections, partially offset by higher payments for salaries and annual performance bonuses[15] - Net cash used in investing activities decreased by $15.3 million, mainly due to lower spending on business acquisitions and internally developed software[15] Notes to Consolidated Financial Statements Detailed notes to Huron's consolidated financial statements, covering business, accounting policies, assets, revenues, and financing 1. Description of Business - Huron is a global professional services firm focused on strategy, operations optimization, digital transformation, and empowering businesses[17] - The company operates under three segments: Healthcare, Education, and Commercial, and reports revenue across two capabilities: Consulting and Managed Services, and Digital[18] 2. Basis of Presentation and Significant Accounting Policies - The unaudited consolidated financial statements are prepared in accordance with SEC rules for Form 10-Q and GAAP, reflecting all normal, recurring adjustments[20] - In Q2 2024, the company revised its consolidated statement of operations to separately present other losses (gains), net, which had no effect on consolidated results[21] 3. New Accounting Pronouncements - ASU 2023-09 (Improvements to Income Tax Disclosures) will be effective for annual periods beginning December 31, 2025, requiring specific categories in rate reconciliation and disaggregation of income taxes paid by jurisdiction, with no expected impact on financial position or operations, only additional disclosures[22] - ASU 2024-03 (Disaggregation of Income Statement Expenses) will be effective for annual periods beginning December 31, 2027, enhancing transparency of expense nature and function, with no expected impact on financial position or operations, only additional disclosures[23] 4. Goodwill and Intangible Assets Goodwill, net by Segment (in thousands) | Segment | December 31, 2024 | March 31, 2025 | | :-------- | :---------------- | :------------- | | Healthcare | $453,528 | $453,528 | | Education | $144,564 | $150,730 | | Commercial | $80,651 | $80,651 | | Total | $678,743 | $684,909 | - Goodwill increased by $6.1 million in the Education segment due to the acquisitions of Advancement Resources and Halpin in March 2025[26][27][28] Intangible Assets (in thousands) | Intangible Asset | Gross Carrying Amount (March 31, 2025) | Accumulated Amortization (March 31, 2025) | Gross Carrying Amount (December 31, 2024) | Accumulated Amortization (December 31, 2024) | | :--------------------- | :------------------------------------- | :---------------------------------------- | :---------------------------------------- | :--------------------------------------- | | Customer relationships | $33,694 | $10,953 | $30,683 | $9,790 | | Technology and software | $16,230 | $13,267 | $16,230 | $12,771 | | Trade names | $6,000 | $6,000 | $6,000 | $6,000 | | Customer contracts | $1,664 | $697 | $1,483 | $418 | | Non-competition agreements | $1,380 | $701 | $1,260 | $601 | | Total | $58,968