Huron Consulting(US:HURN)2021-08-01 09:58Financial Data and Key Metrics Changes - Revenues for Q2 2021 were $230.1 million, up 5.6% from $217.9 million in Q2 2020, driven by growth in Healthcare and Business Advisory segments, partially offset by a decline in Education segment revenues [17] - Net income was $12.8 million or $0.59 per diluted share in Q2 2021, compared to $13.6 million or $0.61 per diluted share in the same quarter in the prior year [18] - Adjusted EBITDA was $25.6 million in Q2 2021, or 11.1% of revenues, compared to $27.5 million or 12.6% of revenues in Q2 2020 [18] Business Line Data and Key Metrics Changes - Healthcare segment revenues grew 19% year-over-year to $101.4 million, reflecting strong recovery and demand for performance improvement and revenue cycle managed services [7][19] - Business Advisory segment revenues were flat year-over-year at $70.9 million, with double-digit growth in digital technology and analytics offset by declines in distressed Advisory and Life Sciences businesses [9][21] - Education segment revenues declined 7% year-over-year to $57.9 million, but grew 14% sequentially from Q1 2021, driven by demand in research, strategy, and operations [11][23] Market Data and Key Metrics Changes - The Healthcare segment generated 44% of total company revenues in Q2 2021, while Business Advisory and Education segments contributed 31% and 25%, respectively [19][21][23] - The company anticipates continued growth in Healthcare and Education segments, supported by a recovering market and increased demand for services [15][29] Company Strategy and Development Direction - The company is focused on leveraging its investments in digital transformation and technology capabilities to enhance service offerings across all segments [10][15] - The management emphasizes the importance of retaining talent during the pandemic to sustain growth and improve margins as demand stabilizes [13] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery trajectory of Healthcare and Education segments, expecting strong demand for services as clients adapt to post-pandemic challenges [6][15] - The company raised its annual revenue guidance to a range of $875 million to $905 million, reflecting anticipated recovery in demand [14][29] Other Important Information - The company reported a DSO (Days Sales Outstanding) of 73 days for Q2 2021, an increase from 64 days in Q1 2021, with expectations to normalize around 60 days [26] - Total debt was $268 million, with a leverage ratio of approximately 2.8x adjusted EBITDA as of June 30, 2021 [27] Q&A Session Summary Question: What is in the pipeline for Healthcare performance improvement? - Management indicated a consistent portfolio of opportunities, with expectations for growth driven by financial pressures in the healthcare industry [31] Question: Can you discuss the revenue and earnings cadence for the rest of the year? - Management noted that the acceleration in Q2 was ahead of expectations, and while they do not anticipate a deceleration, they expect a more stable run rate for the remainder of the year [34][35] Question: What is the hiring environment and employee retention like? - Management reported a competitive hiring environment, particularly in technology areas, with turnover rates higher than last year but consistent with historical trends [36][37] Question: Can you provide details on the new healthcare managed services employees? - Management explained the history of the managed services offering and the recent onboarding of 300 employees, emphasizing the potential for revenue growth from this segment [41][42] Question: What is the outlook for sequential revenue growth in Healthcare and Education? - Management confirmed expectations for sequential revenue improvement in both segments, driven by recovering demand and ongoing projects [54][56]