Huron Consulting(HURN) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents the company's unaudited consolidated financial statements, management's discussion, market risk, and internal controls ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining the company's business, accounting policies, acquisitions, financial instruments, and segment information Consolidated Balance Sheets This section provides a snapshot of the company's financial position at specific dates, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheet Highlights (in thousands): | Item | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Total assets | $1,480,812 | $1,343,617 | | Total liabilities | $1,005,817 | $782,290 | | Total stockholders' equity | $474,995 | $561,327 | | Cash and cash equivalents | $61,011 | $21,911 | | Long-term debt, net of current portion | $643,165 | $342,857 | Consolidated Statements of Operations and Other Comprehensive Income (Loss) This section outlines the company's financial performance over specific periods, including revenues, operating income, net income, and diluted earnings per share Consolidated Statements of Operations Highlights (in thousands, except per share amounts): | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $411,755 | $381,017 | $815,896 | $744,402 | | Operating income | $45,654 | $59,403 | $78,386 | $79,324 | | Net income | $19,430 | $37,482 | $43,966 | $55,488 | | Diluted EPS | $1.09 | $2.03 | $2.42 | $2.96 | Consolidated Statements of Stockholders' Equity This section details changes in the company's equity over time, reflecting net income, share repurchases, and other comprehensive income - Total stockholders' equity decreased from $561,327 thousand at December 31, 2024, to $474,995 thousand at June 30, 2025[14] - Share repurchases for the six months ended June 30, 2025, totaled $133,865 thousand (938,280 shares)[14] - Comprehensive income for the six months ended June 30, 2025, was $27,137 thousand[14] Consolidated Statements of Cash Flows This section summarizes the cash inflows and outflows from operating, investing, and financing activities, indicating the company's liquidity and solvency Consolidated Statements of Cash Flows Highlights (in thousands): | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(26,780) | $(23,503) | | Net cash used in investing activities | $(70,080) | $(39,677) | | Net cash provided by financing activities | $135,804 | $68,726 | | Net increase in cash and cash equivalents | $39,100 | $5,497 | Notes to Consolidated Financial Statements This section provides detailed explanations and additional information supporting the consolidated financial statements, covering accounting policies, acquisitions, and segment data 1. Description of Business This note describes Huron's core business as a global professional services firm, its strategic focus, and its operating segments - Huron is a global professional services firm focused on creating strategies, optimizing operations, accelerating digital transformation, and empowering businesses[20] - The company operates under three segments: Healthcare, Education, and Commercial, and delivers services through Consulting and Managed Services and Digital capabilities[21] 2. Basis of Presentation and Significant Accounting Policies This note outlines the accounting principles and policies used in preparing the unaudited consolidated financial statements, ensuring compliance with SEC rules and GAAP - The unaudited consolidated financial statements are prepared in accordance with SEC rules for Form 10-Q and GAAP, reflecting all necessary adjustments for fair statement[23] - Interim results are not necessarily indicative of results for a full year or any other interim period[23] 3. New Accounting Pronouncements This note discusses recently issued accounting standards and their expected impact on the company's financial statements and disclosures - ASU 2023-09 (Improvements to Income Tax Disclosures) will be effective for annual reporting periods beginning December 31, 2025, and is expected to result in additional disclosures but no impact on financial position or results of operations[24] - ASU 2024-03 (Disaggregation of Income Statement Expenses) will be effective for annual reporting periods beginning December 31, 2027, and interim periods beginning fiscal year 2028, also expected to result in additional disclosures without financial impact[25] 4. Acquisitions This note details the company's recent business acquisitions, including the acquired entities, their segments, and preliminary valuations - Acquired Advancement Resources (March 1, 2025) and Halpin Partnership Limited (March 17, 2025), both included in the Education segment[27][28] - Acquired Eclipse Insights LLC (June 24, 2025), included in the Healthcare segment, with preliminary valuations for assets and liabilities[29][30] - Subsequent event: Acquired TVG-Treliant Holdings, LLC (July 11, 2025), an advisory firm for financial services, to be included in the Commercial segment[32] 5. Goodwill and Intangible Assets This note provides information on the company's goodwill and intangible assets, including changes due to acquisitions and amortization expenses Goodwill, net (in thousands): | Segment | June 30, 2025 | December 31, 2024 | | :---------- | :------------ | :---------------- | | Healthcare | $507,360 | $453,528 | | Education | $151,059 | $144,564 | | Commercial | $80,651 | $80,651 | | Total | $739,070 | $678,743 | - Goodwill increased by $60,044 thousand in the first six months of 2025, primarily due to the acquisition of Eclipse Insights ($53,832 thousand) within the Healthcare segment[36] Intangible Assets (Gross Carrying Amount, in thousands) as of June 30, 2025: | Type | Amount | | :---------------------- | :----- | | Customer relationships | $58,558 | | Technology and software | $18,330 | | Trade names | $6,000 | | Customer contracts | $1,681 | | Non-competition agreements | $1,380 | | Total | $85,949 | - Acquired intangible assets of $30.2 million in the first six months of 2025, with $26.9 million related to Eclipse Insights (customer relationships and technology/software)[37] - Intangible asset amortization expense was $4.3 million for the six months ended June 30, 2025, up from $3.3 million in the prior year[38] 6. Revenues This note details the company's revenue recognition policies, disaggregated revenue data, and information on remaining performance obligations and contract balances Total Revenues (in thousands): | Period | 2025 | 2024 | | :----------------------------------- | :------- | :------- | | Three months ended June 30, | $411,755 | $381,017 | | Six months ended June 30, | $815,896 | $744,402 | - Recognized $12.8 million (Q2 2025) and **$