Financial Data and Key Metrics Changes - Revenues before reimbursable expenses (RVR) grew 11% in Q4 2025, achieving record RVR in healthcare and commercial segments [3] - Full year RVR increased by 12% over 2024, marking the fifth consecutive year of growth [3] - Adjusted diluted earnings per share grew 21% in 2025 compared to 2024, reaching record levels [4] - Adjusted EBITDA margins reached 15.7% in Q4 2025, reflecting continued margin expansion [3][38] - Full year adjusted EBITDA was $237.5 million, or 14.3% of RBR, compared to 13.5% in 2024 [38] Business Line Data and Key Metrics Changes - **Healthcare Segment**: - RVR grew 10% in Q4 2025, with a full year increase of 11% to $838 million [6][7] - Organic growth for the healthcare segment was 8%, excluding acquisitions [6] - **Education Segment**: - RVR was flat in Q4 2025 compared to Q4 2024, but grew 5% for the full year [11] - Strong demand for strategy and operations, research, and digital offerings contributed to the annual growth [11][44] - **Commercial Segment**: - RVR grew 37% in Q4 2025, with a full year increase of 27% to $325 million [15][47] - Organic growth in Q4 2025 was 9% excluding acquisitions [15] Market Data and Key Metrics Changes - The healthcare segment accounted for 51% of total company RBR in Q4 2025 [39] - The education segment generated 28% of total company RBR in Q4 2025 [43] - The commercial segment represented 21% of total company RBR in Q4 2025 [46] Company Strategy and Development Direction - The company focuses on sustaining strong growth in healthcare and education, which are its largest industries [5] - Strategic acquisitions, such as the consulting services division of Axiom Systems, aim to enhance payer-focused digital offerings [10] - The company is committed to advancing its integrated digital platform, with digital capability RBR growing 10% in 2025 [18][20] Management's Comments on Operating Environment and Future Outlook - Management noted that health systems are under pressure from increased operating costs and reimbursement challenges, driving demand for integrated solutions [8][9] - The company expects strong growth momentum to continue into 2026, with a robust backlog and pipeline [4][23] - Guidance for 2026 includes RBR of $1.78 billion to $1.86 billion, reflecting 9.5% growth at the midpoint [55] Other Important Information - The company achieved a net income of $105 million for the full year 2025, down from $116.6 million in 2024 [36] - Free cash flow for 2025 was $162.3 million, with cash flow from operations at $193.4 million [51] - The company repurchased approximately 1.2 million shares in 2025, representing 6.6% of outstanding shares [53] Q&A Session Summary Question: Insights on commercial revenue growth - The commercial segment had a strong quarter, particularly in distressed financial advisory, with no significant one-time items affecting results [63][64] Question: Guidance conservatism - Management indicated that the guidance reflects a cautious approach typical for the beginning of the year, despite strong backlog coverage [65][66] Question: AI project quantification - Approximately 50% of projects now incorporate AI, up from about 25% last year, indicating a significant shift in project delivery [68][70]

Financial Data and Key Metrics Changes - Revenues before reimbursable expenses (RBR) grew 8% year-over-year, reaching a record high for the business [4][21] - Net income for Q2 2025 was $19.4 million, or $1.09 per diluted share, down from $37.5 million, or $2.23 per diluted share in Q2 2024 [23] - Adjusted EBITDA was $60.6 million, or 15.1% of RBR, compared to $55.7 million, or 15% of RBR in Q2 2024 [24] - Adjusted net income increased to $33.7 million, or $1.89 per diluted share, a 12.5% increase from Q2 2024 [25] Business Line Data and Key Metrics Changes - **Healthcare Segment**: RBR grew 4.1% to $197.8 million; excluding divested student education results, growth was 6% [25][26] - **Education Segment**: RBR reached a record $129.3 million, up 5.3% driven by strong demand for strategy and operations offerings [27][10] - **Commercial Segment**: RBR grew 28.2% to $75.4 million, driven by the acquisition of Akcea and strong demand for digital offerings [13][28] Market Data and Key Metrics Changes - The healthcare segment faces significant federal spending cuts projected to reduce Medicaid funding by over $1 trillion over the next decade, increasing the uninsured population by up to 10 million [6][7] - The education segment is experiencing heightened uncertainty due to potential declines in federal support for research grants and anticipated enrollment declines [10][11] Company Strategy and Development Direction - The company is focused on organic growth and strategic acquisitions to enhance its service offerings, particularly in healthcare and commercial segments [18][16] - Recent acquisitions, including Eclipse Insights and Trelliant, are aimed at strengthening performance improvement capabilities and expanding into risk management and compliance [9][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth due to strong client relationships and demand for consulting services, particularly in healthcare [5][18] - The company anticipates ongoing financial pressures for clients, which will drive demand for performance improvement and financial advisory services [42][43] Other Important Information - The company has increased its RBR guidance for 2025 to a range of $1.64 billion to $1.68 billion, reflecting a 12% increase at the midpoint compared to 2024 [17][33] - The effective tax rate for 2025 is expected to be in the range of 25% to 27% [24] Q&A Session Summary Question: Visibility in the current environment - Management noted that visibility has improved compared to earlier in the year, driven by stronger sales conversions and a clearer regulatory environment [40][42] Question: Temporary pause in digital transformation sales - Management believes the slower sales conversions in digital offerings are temporary, as clients focus on immediate financial stability [46][47] Question: Headcount growth and utilization rates - Headcount growth was primarily driven by managed services and recent acquisitions, with utilization rates at the top end of the expected range [55][62] Question: Impact of Medicaid funding cuts - Management highlighted their comprehensive performance improvement offerings that can help healthcare clients navigate the challenges posed by reduced Medicaid funding [72][74] Question: Details on the Trelliant acquisition - The acquisition is expected to enhance the company's capabilities in risk management and compliance, complementing existing services in financial services [75][76]

Financial Data and Key Metrics Changes - The fourth quarter of 2024 produced record revenues before reimbursable expenses (RBR) of $388.4 million, up 14.5% from $339.2 million in the same quarter of 2023 [39] - For the full year 2024, RBR was $1.49 billion, up 9.1% from $1.36 billion in 2023, following strong growth of 20.3% in 2023 over 2022 [40] - Net income for Q4 2024 was $34 million, or $1.84 per diluted share, compared to $2.8 million or $0.15 per diluted share in Q4 2023 [40] - Adjusted EBITDA was $56.8 million in Q4 2024, or 14.6% of RBR, compared to $41.4 million in Q4 2023, or 12.2% of RBR [43] - For the full year 2024, adjusted EBITDA as a percentage of RBR increased to 13.5%, compared to 12.3% in 2023 [44] Business Line Data and Key Metrics Changes - The Healthcare segment generated 52% of total company RBR in Q4 2024, with RBR of $202.3 million, up 17.6% from Q4 2023 [46] - The Education segment posted RBR of $118.8 million in Q4 2024, up 14.5% from Q4 2023, driven by demand for digital and strategy offerings [50] - The Commercial segment generated RBR of $67.3 million in Q4 2024, growing 6.1% over the prior year period, but declined 1.1% for the full year to $255.6 million [53] Market Data and Key Metrics Changes - The Healthcare segment achieved record RBR of $756.3 million for the full year 2024, growing 12.2% over 2023 [47] - The Education segment's full year RBR grew 10.4% year-over-year to a record $474.2 million [51] - The Commercial segment's operating income margin decreased to 20% for the full year 2024, compared to 21% in 2023, reflecting increased salaries and related expenses [55] Company Strategy and Development Direction - The company’s integrated growth strategy has driven record RBR and expanded adjusted EBITDA margins for four consecutive years, focusing on healthcare and education while expanding in commercial industries [7][30] - The company plans to continue broadening its portfolio to meet the expanding needs of healthcare clients and enhance its offerings in education and commercial sectors [11][21] - The acquisition of AXIA Consulting is expected to strengthen the company’s supply chain management offerings and broaden its technology portfolio [22][23] Management's Comments on Operating Environment and Future Outlook - Management noted that many healthcare organizations will likely need to take further actions to achieve financial sustainability due to declining provider margins and increasing costs [12][13] - The company anticipates mid-single-digit revenue growth in the healthcare segment for 2025, reflecting a more cautious outlook after several years of strong growth [64][109] - Management expressed confidence in the robustness of their pipeline and backlog, indicating that they have not seen significant clients reprioritizing spending despite a dynamic regulatory environment [72][75] Other Important Information - The company returned over $122 million of capital to shareholders via share repurchases in 2024, with a stock price increase of 21% [9] - Cash flow generated from operations for 2024 was a record $201 million, resulting in record free cash flow of $168 million [56] - The company expects adjusted diluted earnings per share for 2025 to be in the range of $6.80 to $7.60, reflecting an 11% increase over 2024 [61] Q&A Session Summary Question: Impact of Regulatory Backdrop on Pipeline - Management indicated that they have not seen significant clients reprioritizing spending and feel well-positioned to help clients navigate current uncertainties [72][74] Question: Headcount Growth Plans - The increase in headcount growth was attributed to the acquisition of AXIA and continued strong sales conversion, particularly in healthcare and digital business [78] Question: Medical Research Funding Reductions - Management explained that reduced research funding impacts education clients' revenue, necessitating changes in their institutions to respond to funding reductions [84] Question: Utilization Expectations - Management expects continued improvement in utilization rates, with Q4 2024 above 77% and a positive outlook for the first half of 2025 [87] Question: Higher Medical Costs Impact - Management noted that higher medical costs could squeeze margins for healthcare clients, impacting overall financial performance [90]