Huron Consulting(US:HURN)2025-10-28 20:18Growth and Acquisitions - Huron Consulting Group reported strong growth in healthcare and education sectors, aiming to broaden its portfolio to meet evolving market needs[163]. - The company has enhanced its consulting offerings through acquisitions, including Eclipse Insights for revenue cycle solutions in June 2025[166]. - Huron's education segment has been bolstered by acquisitions such as Grenzebach Glier and Associates in March 2024, enhancing its global philanthropy consulting services[167]. - The commercial segment has seen growth through acquisitions like AXIA Consulting in December 2024, expanding its supply chain management offerings[168]. - The acquisition of Treliant added approximately 180 revenue-generating professionals to the Commercial segment in Q3 2025[213]. - Incremental revenues before reimbursable expenses from acquisitions since Q3 2024 amounted to $28.3 million[201]. Financial Performance - Revenues before reimbursable expenses increased by $62.3 million, or 16.8%, to $432.4 million for Q3 2025 from $370.0 million for Q3 2024[201]. - Total revenues for the company reached $441.3 million in Q3 2025, compared to $378.1 million in Q3 2024, representing a 16.7% increase[210]. - Net income increased by $3.3 million, or 12.0%, to $30.4 million for Q3 2025 from $27.1 million in Q3 2024, with diluted earnings per share rising to $1.71 from $1.47[234]. - Adjusted EBITDA increased by $12.6 million, or 22.9%, to $67.4 million, or 15.6% of revenues before reimbursable expenses for Q3 2025 compared to 14.8% for Q3 2024[207]. - Adjusted net income increased by $6.3 million, or 20.3%, to $37.4 million in Q3 2025, with adjusted diluted earnings per share increasing to $2.10 from $1.68[238]. Segment Performance - Healthcare segment revenues before reimbursable expenses increased to $219.5 million in Q3 2025 from $183.1 million in Q3 2024, a growth of 19.9%[210]. - Education segment revenues before reimbursable expenses rose to $129.4 million in Q3 2025, compared to $121.0 million in Q3 2024, reflecting a 6.9% increase[210]. - Commercial segment revenues before reimbursable expenses grew to $83.4 million in Q3 2025, up from $65.9 million in Q3 2024, marking a 26.5% increase[210]. - Healthcare operating income increased by $18.1 million, or 36.5%, with an operating margin of 30.9%[227]. - Education operating income rose by $4.1 million, or 14.0%, with an operating margin of 25.7%[227]. - Commercial operating income decreased by $2.5 million, or 15.4%, with an operating margin of 16.4%[228]. Operational Efficiency - Huron's operational efficiency initiatives aim for margin expansion and strong annual adjusted diluted earnings per share growth[164]. - The utilization rate within the Consulting capability increased to 73.7% in Q3 2025, compared to 73.6% in Q3 2024[202]. - The total number of revenue-generating professionals increased by 15.2% to 5,244 as of September 30, 2025, compared to 4,551 as of September 30, 2024[204]. - The number of Managed Services professionals increased by 55.5% to 2,091 as of September 30, 2025, from 1,345 as of September 30, 2024[204]. Cash Flow and Capital Management - The company maintains a strong balance sheet and cash flow, committed to strategic capital deployment and shareholder returns[164]. - Returned $152.5 million to shareholders in the first nine months of 2025 by repurchasing 1,084,794 shares of common stock[208]. - Cash and cash equivalents increased to $23.9 million as of September 30, 2025, compared to $21.9 million at the end of 2024[263]. - Net cash provided by operating activities increased by $5.3 million to $67.0 million for the nine months ended September 30, 2025, from $61.7 million in 2024[267]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $133.2 million, primarily for business purchases ($107.2 million) and software development ($15.4 million)[270]. Risks and Challenges - The company faces risks related to client retention, market volatility, and integration of acquired businesses, which could impact future performance[161]. - The company has exposure to interest rate risks, with a hypothetical 100 basis point change in interest rates potentially affecting pretax income by $3.6 million annually[297]. - The company does not use derivative instruments for trading or speculative purposes, minimizing market risk exposure[306]. Investments and Impairments - The fair value of the investment in Shorelight Holdings, LLC decreased to $32.8 million as of September 30, 2025, from $62.3 million at December 31, 2024, reflecting a non-cash credit-related impairment charge of $11.1 million[303]. - The equity investment in the hospital-at-home company had a carrying value of $2.4 million as of September 30, 2025, down from $7.4 million at December 31, 2024, after recognizing a total non-cash impairment charge of $5.0 million[304]. - The total cost basis of the investment in Shorelight Holdings, LLC is $40.9 million, indicating a fair value decline of approximately 47.3% over the nine months of 2025[303].