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]