THIRD QUARTER 2024 HIGHLIGHTS
- Revenues before reimbursable expenses(1) increased $11.9
million, or 3.3%, to $370.0 million in Q3 2024 from $358.2 million
in Q3 2023.
- Net income increased $5.6 million, or 26.2%, to $27.1 million
in Q3 2024, compared to $21.5 million in Q3 2023.
- Adjusted EBITDA(9), a non-GAAP measure, increased $6.9 million,
or 14.3%, to $54.9 million in Q3 2024 from $48.0 million in Q3
2023.
- Diluted earnings per share increased $0.37, or 33.6%, to $1.47
in Q3 2024, compared to $1.10 in Q3 2023.
- Adjusted diluted earnings per share(9), a non-GAAP measure,
increased $0.29, or 20.9%, to $1.68 in Q3 2024 from $1.39 in Q3
2023.
- Net cash provided by operating activities was $85.2 million in
Q3 2024, compared to $68.8 million in Q3 2023.
YEAR-TO-DATE 2024 HIGHLIGHTS
- Revenues before reimbursable expenses(1) increased $74.8
million, or 7.3%, to $1.10 billion for the first nine months of
2024 from $1.02 billion for the same prior year period.
- Net income increased $23.0 million, or 38.5%, to $82.6 million
for the first nine months of 2024, compared to $59.6 million for
the same prior year period. Results for the first nine months of
2024 include an $11.1 million litigation settlement gain, net of
tax, related to a completed legal matter in which Huron was the
plaintiff.
- Adjusted EBITDA(9), a non-GAAP measure, increased $18.4
million, or 14.6%, to $144.4 million for the first nine months of
2024 from $126.0 million for the same prior year period.
- Diluted earnings per share increased $1.38, or 45.2%, to $4.43
for the first nine months of 2024, compared to $3.05 for the same
prior year period. Results for the first nine months of 2024
include the litigation settlement gain related to a completed legal
matter in which Huron was the plaintiff, which had a favorable
$0.59 impact on diluted earnings per share for the period.
- Adjusted diluted earnings per share(9), a non-GAAP measure,
increased $0.93, or 25.5%, to $4.57 for the first nine months of
2024 from $3.64 for the same prior year period.
- Huron returned $104.0 million to shareholders by repurchasing
1.1 million shares of the company's common stock in the first nine
months of 2024, representing 5.8% of the company's common stock
outstanding as of December 31, 2023.
- Huron narrowed the range of expected revenues before
reimbursable expenses to $1.47 billion to $1.49 billion while
maintaining its previous midpoint of guidance; and increased its
adjusted diluted earnings per share(9) expectations to a range of
$6.00 to $6.20.
_________________________________
(1) In the third quarter of 2024, the Company revised the line
item descriptions of revenues to rename revenues as revenues before
reimbursable expenses and to rename total revenues and reimbursable
expenses as total revenues. The change in line item description had
no impact on the line item totals for any period.
Global professional services firm Huron (NASDAQ: HURN) today
announced financial results for the quarter ended September 30,
2024.
“Revenue growth in the third quarter of 2024 was 3%, which was
achieved in light of the strong growth achieved across all three
operating segments in the same period a year ago. Our Healthcare
and Education segments have grown over each comparative quarter
since the first quarter of 2021, and in the third quarter of 2024,
our Commercial segment achieved strong sequential growth over the
second quarter of 2024,” said Mark Hussey, chief executive officer
and president of Huron. “We continue to execute against our margin
enhancement initiatives, which produced strong third quarter and
year-to-date margin percentage and earnings per share
expansion.”
“Strong sales conversion across all three operating segments in
the third quarter positions us well to deliver on our annual
revenue and earnings guidance while laying the foundation for
continued solid growth in 2025,” added Hussey.
THIRD QUARTER 2024 RESULTS
Revenues before reimbursable expenses increased $11.9 million,
or 3.3%, to $370.0 million for the third quarter of 2024, compared
to $358.2 million for the third quarter of 2023. The increase in
revenues before reimbursable expenses was driven by an increase in
demand for Education's Consulting and Managed Services and Digital
capabilities, as well as continued strength in demand for
Healthcare's Digital capability, reflecting the company's focus on
accelerating growth in the healthcare and education industries.
These increases in demand were partially offset by a decrease in
demand for Commercial's Consulting and Managed Services
capability.
Net income increased $5.6 million, or 26.2%, to $27.1 million,
or 7.2% of total revenues, for the third quarter of 2024, compared
to $21.5 million, or 5.9% of total revenues, for the same quarter
last year. Diluted earnings per share increased $0.37, or 33.6%, to
$1.47 for the third quarter of 2024, compared to $1.10 for the
third quarter of 2023.
Third quarter 2024 earnings before interest, taxes, depreciation
and amortization (“EBITDA”)(9) increased $8.3 million, or 19.4%, to
$50.9 million, compared to $42.6 million in the same prior year
period.
In addition to using EBITDA to evaluate the company’s financial
performance, management uses other non-GAAP financial measures,
which exclude the effect of the following items (in thousands).
Three Months Ended
September 30,
2024
2023
Amortization of intangible assets
$
1,600
$
1,997
Restructuring charges
$
3,137
$
5,402
Other gains, net
$
(173
)
$
(14
)
Transaction-related expenses
$
716
$
302
Tax effect of adjustments
$
(1,372
)
$
(2,037
)
Foreign currency transaction losses
(gains), net
$
267
$
(332
)
Adjusted EBITDA(9) increased $6.9 million, or 14.3%, to $54.9
million, or 14.8% of revenues before reimbursable expenses(9), in
the third quarter of 2024, compared to $48.0 million, or 13.4% of
revenues before reimbursable expenses(9), in the same quarter last
year. Adjusted net income(9) increased $3.9 million, or 14.3%, to
$31.1 million, or $1.68 per diluted share, for the third quarter of
2024, compared to $27.2 million, or $1.39 per diluted share, for
the same quarter in 2023.
The number of revenue-generating professionals(2) increased
10.4% to 5,896 as of September 30, 2024 from 5,341 as of September
30, 2023. The utilization rate(8) of the company's Consulting
capability was 73.6% during the third quarter of 2024, compared to
77.3% during the same period last year. The utilization rate(8) for
the company's Digital capability increased to 77.2% during the
third quarter of 2024, compared to 75.4% during the same period
last year.
YEAR-TO-DATE 2024 RESULTS
Revenues before reimbursable expenses increased $74.8 million,
or 7.3%, to $1.10 billion for the first nine months of 2024,
compared to $1.02 billion for the first nine months of 2023. The
increase in revenues before reimbursable expenses was driven by
continued strength in demand for both our Consulting and Managed
Services capability and Digital capability within Healthcare and
Education, reflecting the company's focus on accelerating growth in
the healthcare and education industries. These increases were
partially offset by a decrease in demand for Commercial's Digital
and Consulting and Managed Services capabilities.
Net income increased $23.0 million, or 38.5%, to $82.6 million,
or 7.4% of total revenues, for the first nine months of 2024,
compared to $59.6 million, or 5.7% of total revenues, for the same
prior year period. Results for the first nine months of 2024
include an $11.1 million litigation settlement gain, net of tax,
related to a completed legal matter in which Huron was the
plaintiff. Diluted earnings per share increased $1.38, or 45.2%, to
$4.43 for the first nine months of 2024, compared to $3.05 for the
same prior year period. The litigation settlement gain recognized
in the second quarter of 2024 had a favorable $0.59 impact on
diluted earnings per share for the nine months ended September 30,
2024.
EBITDA(9) for the first nine months of 2024 increased $29.6
million, or 25.5%, to $146.1 million, compared to $116.5 million in
the same prior year period. Results for the first nine months of
2024 include a pre-tax $15.0 million litigation settlement gain
related to the completed legal matter in which Huron was the
plaintiff.
In addition to using EBITDA to evaluate the company’s financial
performance, management uses other non-GAAP financial measures,
which exclude the effect of the following items (in thousands):
Nine Months Ended
September 30,
2024
2023
Amortization of intangible assets
$
4,917
$
6,202
Restructuring charges
$
7,530
$
9,385
2024 litigation settlement gain (10)
$
(11,701
)
$
—
Other losses (gains), net
$
478
$
(202
)
Transaction-related expenses
$
2,316
$
302
Tax effect of adjustments
$
(920
)
$
(4,157
)
Foreign currency transaction losses
(gains), net
$
(348
)
$
36
Adjusted EBITDA(9), which excludes the 2024 litigation
settlement gain, increased $18.4 million, or 14.6%, to $144.4
million, or 13.2% of revenues before reimbursable expenses(9), for
the first nine months of 2024, compared to $126.0 million, or 12.3%
of revenues before reimbursable expenses(9), in the same prior year
period. Adjusted net income(9) increased $14.1 million, or 19.8%,
to $85.3 million, or $4.57 per diluted share, for the first nine
months of 2024, compared to $71.2 million, or $3.64 per diluted
share, for the same prior year period.
The number of revenue-generating professionals(2) increased
10.4% to 5,896 as of September 30, 2024 from 5,341 as of September
30, 2023. The utilization rate(8) of the company's Consulting
capability was 72.5% for the first nine months of 2024, compared to
76.5% during the same period last year. The utilization rate(8) for
the company's Digital capability increased to 75.4% for the first
nine months of 2024, compared to 73.7% during the same period last
year.
Additionally, Huron returned $104.0 million to shareholders in
the first nine months of 2024 by repurchasing 1,067,545 shares of
the company's common stock, representing 5.8% of the company's
common stock outstanding as of December 31, 2023.
OPERATING INDUSTRIES
The company’s year-to-date 2024 revenues before reimbursable
expenses by operating segment as a percentage of total company
revenues before reimbursable expenses are as follows: Healthcare
(50%); Education (32%); and Commercial (18%). Financial results by
operating industry are included in the attached schedules and in
Huron's forthcoming Quarterly Report on Form 10-Q filing for the
quarter ended September 30, 2024.
OUTLOOK FOR 2024
Based on currently available information, the company is
narrowing guidance for full year 2024 revenues before reimbursable
expenses to a range of $1.47 billion to $1.49 billion while
maintaining its previous midpoint of guidance. The company also
anticipates adjusted EBITDA as a percentage of revenues before
reimbursable expenses(9) in a range of 13.0% to 13.5%, and is
increasing adjusted diluted earnings per share(9) guidance to a
range of $6.00 to $6.20.
THIRD QUARTER 2024 WEBCAST
The company will host a webcast to discuss its financial results
today, October 29, 2024, at 5:00 p.m. Eastern Time, 4:00 p.m.
Central Time. The conference call is being webcast by Notified and
can be accessed from Huron's website at
http://ir.huronconsultinggroup.com. A replay will be available
approximately two hours after the conclusion of the webcast and for
90 days thereafter.
USE OF NON-GAAP FINANCIAL MEASURES(9)
In evaluating the company’s financial performance and outlook,
management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a
percentage of revenues before reimbursable expenses, adjusted net
income, and adjusted diluted earnings per share, which are non-GAAP
measures. Management uses these non-GAAP financial measures to gain
an understanding of the company's comparative operating performance
(when comparing such results with previous periods or forecasts).
These non-GAAP financial measures are used by management in their
financial and operating decision making because management believes
they reflect the company's ongoing business in a manner that allows
for meaningful period-to-period comparisons. Management also uses
these non-GAAP financial measures when publicly providing their
business outlook, for internal management purposes, and as a basis
for evaluating potential acquisitions and dispositions. Management
believes that these non-GAAP financial measures provide useful
information to investors and others in understanding and evaluating
Huron’s current operating performance and future prospects in the
same manner as management does, if they so choose, and in comparing
in a consistent manner Huron’s current financial results with
Huron’s past financial results. Investors should recognize that
these non-GAAP measures might not be comparable to similarly titled
measures of other companies. These measures should be considered in
addition to, and not as a substitute for or superior to, any
measure of performance, cash flows or liquidity prepared in
accordance with accounting principles generally accepted in the
United States.
Management has provided its outlook regarding adjusted EBITDA
and adjusted diluted earnings per share, both of which are non-GAAP
financial measures and exclude certain charges. Management has not
reconciled these non-GAAP financial measures to the corresponding
GAAP financial measures because guidance for the various
reconciling items is not provided. Management is unable to provide
guidance for these reconciling items because they cannot determine
their probable significance, as certain items are outside of the
company's control and cannot be reasonably predicted since these
items could vary significantly from period to period. Accordingly,
reconciliations to the corresponding GAAP financial measures are
not available without unreasonable effort.
ABOUT HURON
Huron is a global professional services firm that collaborates
with clients to put possible into practice by creating sound
strategies, optimizing operations, accelerating digital
transformation, and empowering businesses and their people to own
their future. By embracing diverse perspectives, encouraging new
ideas and challenging the status quo, we create sustainable results
for the organizations we serve. Learn more at
www.huronconsultinggroup.com.
Statements in this press release that are not historical in
nature, including those concerning the company’s current
expectations about its future results, are “forward-looking”
statements as defined in Section 21E of the Securities Exchange Act
of 1934, as amended, and the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are identified by words
such as “may,” “should,” “expects,” “provides,” “anticipates,”
“assumes,” “can,” “will,” “meets,” “could,” “likely,” “intends,”
“might,” “predicts,” “seeks,” “would,” “believes,” “estimates,”
“plans,” “continues,” “goals,” “guidance,” or “outlook” or similar
expressions. These forward-looking statements reflect the company's
current expectations about future requirements and needs, results,
levels of activity, performance, or achievements. Some of the
factors that could cause actual results to differ materially from
the forward-looking statements contained herein include, without
limitation: failure to achieve expected utilization rates, billing
rates, and the necessary number of revenue-generating
professionals; inability to expand or adjust our service offerings
in response to market demands; our dependence on renewal of
client-based services; dependence on new business and retention of
current clients and qualified personnel; failure to maintain
third-party provider relationships and strategic alliances;
inability to license technology to and from third parties; the
impairment of goodwill; various factors related to income and other
taxes; difficulties in successfully integrating the businesses we
acquire and achieving expected benefits from such acquisitions;
risks relating to privacy, information security, and related laws
and standards; and a general downturn in market conditions. These
forward-looking statements involve known and unknown risks,
uncertainties, and other factors, including, among others, those
described under “Item 1A. Risk Factors” in Huron's Annual Report on
Form 10-K for the year ended December 31, 2023 that may cause
actual results, levels of activity, performance or achievements to
be materially different from any anticipated results, levels of
activity, performance, or achievements expressed or implied by
these forward-looking statements. The company disclaims any
obligation to update or revise any forward-looking statements as a
result of new information or future events, or for any other
reason.
HURON CONSULTING GROUP
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenues:
Revenues before reimbursable expenses
$
370,049
$
358,178
$
1,097,664
$
1,022,832
Reimbursable expenses
8,040
9,288
24,827
25,918
Total revenues
378,089
367,466
1,122,491
1,048,750
Operating expenses:
Direct costs (exclusive of depreciation
and amortization included below)
247,849
244,774
749,757
708,355
Reimbursable expenses
8,135
9,497
25,146
26,242
Selling, general and administrative
expenses
70,375
64,361
214,485
190,857
Other gains, net
(173
)
(14
)
(14,522
)
(202
)
Restructuring charges
3,137
5,402
7,530
9,385
Depreciation and amortization
6,321
6,104
18,326
18,621
Total operating expenses
335,644
330,124
1,000,722
953,258
Operating income
42,445
37,342
121,769
95,492
Other income (expense), net:
Interest expense, net of interest
income
(6,800
)
(5,047
)
(19,894
)
(15,146
)
Other income (expense), net
1,936
(1,000
)
5,361
1,781
Total other expense, net
(4,864
)
(6,047
)
(14,533
)
(13,365
)
Income before taxes
37,581
31,295
107,236
82,127
Income tax expense
10,432
9,779
24,599
22,480
Net income
$
27,149
$
21,516
$
82,637
$
59,647
Earnings per share:
Net income per basic share
$
1.53
$
1.15
$
4.61
$
3.15
Net income per diluted share
$
1.47
$
1.10
$
4.43
$
3.05
Weighted average shares used in
calculating earnings per share:
Basic
17,754
18,770
17,945
18,941
Diluted
18,471
19,475
18,672
19,578
Comprehensive income (loss):
Net income
$
27,149
$
21,516
$
82,637
$
59,647
Foreign currency translation adjustments,
net of tax
900
(662
)
(103
)
(283
)
Unrealized gain (loss) on investment, net
of tax
(443
)
(1,350
)
(8,208
)
3,076
Unrealized loss on cash flow hedging
instruments, net of tax
(4,716
)
(368
)
(4,770
)
(234
)
Other comprehensive income (loss)
(4,259
)
(2,380
)
(13,081
)
2,559
Comprehensive income
$
22,890
$
19,136
$
69,556
$
62,206
HURON CONSULTING GROUP
INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share amounts)
(Unaudited)
September 30,
2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
18,497
$
12,149
Receivables from clients, net
204,894
162,566
Unbilled services, net
177,437
190,869
Income tax receivable
9,192
6,385
Prepaid expenses and other current
assets
27,789
28,491
Total current assets
437,809
400,460
Property and equipment, net
21,682
23,728
Deferred income taxes, net
2,408
2,288
Long-term investments
64,319
75,414
Operating lease right-of-use assets
21,026
24,131
Other non-current assets
111,448
92,336
Intangible assets, net
22,547
18,074
Goodwill
647,541
625,711
Total assets
$
1,328,780
$
1,262,142
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
8,151
$
10,074
Accrued expenses and other current
liabilities
26,490
33,087
Accrued payroll and related benefits
183,182
225,921
Current maturities of long-term debt
13,750
—
Current maturities of operating lease
liabilities
11,990
11,032
Deferred revenues
27,703
22,461
Total current liabilities
271,266
302,575
Non-current liabilities:
Deferred compensation and other
liabilities
44,322
35,665
Long-term debt, net of current portion
428,204
324,000
Operating lease liabilities, net of
current portion
33,442
38,850
Deferred income taxes, net
28,774
28,160
Total non-current liabilities
534,742
426,675
Commitments and contingencies
Stockholders’ equity
Common stock; $0.01 par value; 500,000,000
shares authorized; 20,793,202 and 21,316,441 shares issued,
respectively
207
212
Treasury stock, at cost, 3,062,689 and
2,852,296 shares, respectively
(159,717
)
(142,136
)
Additional paid-in capital
174,872
236,962
Retained earnings
497,664
415,027
Accumulated other comprehensive income
9,746
22,827
Total stockholders’ equity
522,772
532,892
Total liabilities and stockholders’
equity
$
1,328,780
$
1,262,142
HURON CONSULTING GROUP
INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2024
2023
Cash flows from operating
activities:
Net income
$
82,637
$
59,647
Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation and amortization
18,326
18,653
Non-cash lease expense
4,486
4,840
Lease-related impairment charges
3,513
5,584
Share-based compensation
33,963
35,398
Amortization of debt discount and issuance
costs
793
577
Allowances for doubtful accounts
3,062
53
Deferred income taxes
5,037
890
Gain on sale of property and equipment
(101
)
(61
)
Change in fair value of contingent
consideration liabilities
(589
)
(251
)
Changes in operating assets and
liabilities, net of acquisitions and divestiture:
(Increase) decrease in receivables from
clients, net
(44,739
)
(18,508
)
(Increase) decrease in unbilled services,
net
13,770
(51,092
)
(Increase) decrease in current income tax
receivable / payable, net
(3,114
)
(4,365
)
(Increase) decrease in other assets
(8,412
)
(6,243
)
Increase (decrease) in accounts payable
and other liabilities
(6,994
)
(5,361
)
Increase (decrease) in accrued payroll and
related benefits
(41,385
)
10,805
Increase (decrease) in deferred
revenues
1,451
4,328
Net cash provided by operating
activities
61,704
54,894
Cash flows from investing
activities:
Purchases of property and equipment
(6,028
)
(5,147
)
Investments in life insurance policies
(2,166
)
(2,601
)
Distributions from life insurance
policies
—
2,956
Purchases of businesses
(20,769
)
(1,613
)
Capitalization of internally developed
software costs
(19,341
)
(19,610
)
Proceeds from note receivable
154
154
Proceeds from sale of property and
equipment
102
62
Net cash used in investing activities
(48,048
)
(25,799
)
Cash flows from financing
activities:
Proceeds from exercises of stock
options
1,634
987
Shares redeemed for employee tax
withholdings
(21,458
)
(10,050
)
Share repurchases
(104,553
)
(88,897
)
Proceeds from bank borrowings
682,500
292,000
Repayments of bank borrowings
(563,375
)
(224,000
)
Payments for debt issuance costs
(1,446
)
(58
)
Deferred payments on business
acquisition
(617
)
(1,500
)
Net cash used in financing activities
(7,315
)
(31,518
)
Effect of exchange rate changes on
cash
7
(13
)
Net increase (decrease) in cash and cash
equivalents
6,348
(2,436
)
Cash and cash equivalents at beginning of
the period
12,149
11,834
Cash and cash equivalents at end of the
period
$
18,497
$
9,398
HURON CONSULTING GROUP
INC.
SEGMENT OPERATING RESULTS AND
OTHER OPERATING DATA
(Unaudited)
Three Months Ended
September 30,
Percent
Increase
(Decrease)
Nine Months Ended
September 30,
Percent
Increase
(Decrease)
Segment and Consolidated Operating
Results (in thousands):
2024
2023
2024
2023
Healthcare:
Revenues before reimbursable expenses
$
183,136
$
179,177
2.2
%
$
553,976
$
501,994
10.4
%
Operating income
$
49,651
$
46,888
5.9
%
$
147,591
$
128,294
15.0
%
Segment operating margin
27.1
%
26.2
%
26.6
%
25.6
%
Education:
Revenues before reimbursable expenses
$
121,048
$
111,043
9.0
%
$
355,384
$
325,884
9.1
%
Operating income
$
29,158
$
26,550
9.8
%
$
81,906
$
77,112
6.2
%
Segment operating margin
24.1
%
23.9
%
23.0
%
23.7
%
Commercial:
Revenues before reimbursable expenses
$
65,865
$
67,958
(3.1
)%
$
188,304
$
194,954
(3.4
)%
Operating income
$
16,144
$
15,432
4.6
%
$
39,198
$
39,971
(1.9
)%
Segment operating margin
24.5
%
22.7
%
20.8
%
20.5
%
Total Huron:
Revenues before reimbursable expenses
$
370,049
$
358,178
3.3
%
$
1,097,664
$
1,022,832
7.3
%
Reimbursable expenses
8,040
9,288
(13.4
)%
24,827
25,918
(4.2
)%
Total revenues
$
378,089
$
367,466
2.9
%
$
1,122,491
$
1,048,750
7.0
%
Items not allocated at the segment
level:
Unallocated corporate expenses
46,821
43,100
8.6
%
143,386
129,765
10.5
%
Other gains, net
(173
)
(14
)
N/M
(14,522
)
(202
)
N/M
Restructuring charges
1,921
4,095
(53.1
)%
6,201
6,881
(9.9
)%
Depreciation and amortization
3,939
4,347
(9.4
)%
11,861
13,441
(11.8
)%
Operating income
42,445
37,342
13.7
%
121,769
95,492
27.5
%
Other expense, net
(4,864
)
(6,047
)
(19.6
)%
(14,533
)
(13,365
)
8.7
%
Income before taxes
$
37,581
$
31,295
20.1
%
$
107,236
$
82,127
30.6
%
Other Operating Data:
Number of revenue-generating
professionals by segment (at period end) (2)(3):
Healthcare
2,442
1,878
30.0
%
2,442
1,878
30.0
%
Education
1,250
1,203
3.9
%
1,250
1,203
3.9
%
Commercial (4)
2,204
2,260
(2.5
)%
2,204
2,260
(2.5
)%
Total
5,896
5,341
10.4
%
5,896
5,341
10.4
%
Revenues before reimbursable expenses
by capability:
Consulting and Managed Services (5)(6)
$
214,517
$
214,688
(0.1
)%
$
634,415
$
589,137
7.7
%
Digital
155,532
143,490
8.4
%
463,249
433,695
6.8
%
Total
$
370,049
$
358,178
3.3
%
$
1,097,664
$
1,022,832
7.3
%
Number of revenue-generating
professionals by capability (at period end)(2):
Consulting and Managed Services (5)(7)
3,052
2,483
22.9
%
3,052
2,483
22.9
%
Digital
2,844
2,858
(0.5
)%
2,844
2,858
(0.5
)%
Total
5,896
5,341
10.4
%
5,896
5,341
10.4
%
Utilization rate by capability
(8):
Consulting
73.6
%
77.3
%
72.5
%
76.5
%
Digital
77.2
%
75.4
%
75.4
%
73.7
%
(2)
Consists of our full-time consultants who
generate revenues based on the number of hours worked; full-time
equivalents, which consists of coaches and their support staff
within the culture and organizational excellence solution,
consultants who work variable schedules as needed by clients, and
full-time employees who provide software support and maintenance
services to clients; and our Healthcare managed services employees
who provide revenue cycle billing, collections, insurance
verification and change integrity services to clients.
(3)
During the first quarter of 2024, we
reclassified certain revenue-generating professionals within our
Digital capability from our Healthcare and Education segments to
our Commercial segment as these professionals are able to provide
services across all of our industries. This reclassification did
not impact the total Digital capability headcount for any period.
The prior period headcount has been revised for consistent
presentation.
(4)
The majority of our revenue-generating professionals within our
Commercial segment can provide services across all of our
industries, including healthcare and education, and the related
costs of these professionals are allocated to each of the segments.
(5)
During the first quarter of 2024, we
reclassified one of the offerings within Education's Consulting
capability to Education's Managed Services capability. Revenues
before reimbursable expenses generated by this offering during the
quarters ended March 31, 2023, June 30, 2023, September 30, 2023,
and December 31, 2023 were $2.8 million, $2.2 million, $2.4
million, and $2.7 million, respectively, and during the years ended
December 31, 2022 and 2023 were $15.0 million and $10.1 million,
respectively. The number of revenue-generating professionals within
this offering as of December 31, 2022, March 31, 2023, June 30,
2023, September 30, 2023 and December 31, 2023 were 54, 24, 24, 24
and 23, respectively.
This reclassification did not impact the
aggregate revenues before reimbursable expenses or headcount
reported for the Education Consulting and Managed Services
capability for any period, and the prior period Education Managed
Services capability revenues before reimbursable expenses and
headcount in the following footnotes have been revised for
consistent presentation.
(6)
Managed Services capability revenues
before reimbursable expenses within our Healthcare segment was
$19.3 million and $16.7 million for the three months ended
September 30, 2024 and 2023, respectively; and $53.5 million and
$53.8 million for the nine months ended September 30, 2024 and
2023, respectively.
Managed Services capability revenues
before reimbursable expenses within our Education segment was $6.6
million and $7.4 million for the three months ended September 30,
2024 and 2023, respectively; and $20.8 million and $22.0 million
for the nine months ended September 30, 2024 and 2023,
respectively.
(7)
The number of Managed Services
revenue-generating professionals within our Healthcare segment was
1,223 and 757 as of September 30, 2024 and 2023, respectively.
The number of Managed Services
revenue-generating professionals within our Education segment was
122 and 129 as of September 30, 2024 and 2023, respectively.
(8)
Utilization rate is calculated by dividing
the number of hours our billable consultants worked on client
assignments during a period by the total available working hours
for these billable consultants during the same period. Available
working hours are determined by the standard hours worked by each
billable consultant, adjusted for part-time hours, and U.S.
standard work weeks. Available working hours exclude local country
holidays and vacation days. Utilization rates are presented for our
revenue-generating professionals who primarily bill on an hourly
basis. We have not presented utilization rates for our Managed
Services professionals as most of the revenues generated by these
employees are not billed on an hourly basis.
HURON CONSULTING GROUP
INC.
RECONCILIATION OF NET
INCOME
TO ADJUSTED EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (9)
(In thousands)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenues before reimbursable
expenses
$
370,049
$
358,178
$
1,097,664
$
1,022,832
Reimbursable expenses
8,040
9,288
24,827
25,918
Total revenues
$
378,089
$
367,466
$
1,122,491
$
1,048,750
Net income
$
27,149
$
21,516
$
82,637
$
59,647
Net income as a percentage of total
revenues
7.2
%
5.9
%
7.4
%
5.7
%
Add back:
Income tax expense
10,432
9,779
24,599
22,480
Interest expense, net of interest
income
6,800
5,047
19,894
15,146
Depreciation and amortization
6,542
6,300
18,967
19,183
Earnings before interest, taxes,
depreciation and amortization (EBITDA) (9)
50,923
42,642
146,097
116,456
Add back:
Restructuring charges
3,137
5,402
7,530
9,385
2024 litigation settlement gain (10)
—
—
(11,701
)
—
Other losses (gains), net
(173
)
(14
)
478
(202
)
Transaction-related expenses
716
302
2,316
302
Foreign currency transaction losses
(gains), net
267
(332
)
(348
)
36
Adjusted EBITDA (9)
$
54,870
$
48,000
$
144,372
$
125,977
Adjusted EBITDA as a percentage of
revenues before reimbursable expenses (9)
14.8
%
13.4
%
13.2
%
12.3
%
HURON CONSULTING GROUP
INC.
RECONCILIATION OF NET INCOME
TO ADJUSTED NET INCOME (9)
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Net income
$
27,149
$
21,516
$
82,637
$
59,647
Weighted average shares -
diluted
18,471
19,475
18,672
19,578
Diluted earnings per share
$
1.47
$
1.10
$
4.43
$
3.05
Add back:
Amortization of intangible assets
1,600
1,997
4,917
6,202
Restructuring charges
3,137
5,402
7,530
9,385
2024 litigation settlement gain (10)
—
—
(11,701
)
—
Other losses (gains), net
(173
)
(14
)
478
(202
)
Transaction-related expenses
716
302
2,316
302
Tax effect of adjustments
(1,372
)
(2,037
)
(920
)
(4,157
)
Total adjustments, net of tax
3,908
5,650
2,620
11,530
Adjusted net income (9)
$
31,057
$
27,166
$
85,257
$
71,177
Adjusted weighted average shares -
diluted
18,471
19,475
18,672
19,578
Adjusted diluted earnings per share
(9)
$
1.68
$
1.39
$
4.57
$
3.64
(9)
In evaluating the company’s financial
performance and outlook, management uses earnings before interest,
taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA,
adjusted EBITDA as a percentage of revenues before reimbursable
expenses, adjusted net income, and adjusted diluted earnings per
share, which are non-GAAP measures. Management uses these non-GAAP
financial measures to gain an understanding of the company's
comparative operating performance (when comparing such results with
previous periods or forecasts). These non-GAAP financial measures
are used by management in their financial and operating decision
making because management believes they reflect the company's
ongoing business in a manner that allows for meaningful
period-to-period comparisons. Management also uses these non-GAAP
financial measures when publicly providing the company's business
outlook, for internal management purposes, and as a basis for
evaluating potential acquisitions and dispositions. Management
believes that these non-GAAP financial measures provide useful
information to investors and others in understanding and evaluating
Huron’s current operating performance and future prospects in the
same manner as management does, if they so choose, and in comparing
in a consistent manner Huron’s current financial results with
Huron’s past financial results. Investors should recognize that
these non-GAAP measures might not be comparable to similarly titled
measures of other companies. These measures should be considered in
addition to, and not as a substitute for or superior to, any
measure of performance, cash flows or liquidity prepared in
accordance with accounting principles generally accepted in the
United States.
(10)
The non-GAAP financial measures for the
nine months ended September 30, 2024 include an adjustment for the
2024 litigation settlement gain. In the second quarter of 2024, the
company settled a litigation matter in which Huron was the
plaintiff for $15.0 million, on a pre-tax basis. This $15.0 million
settlement gain was recorded as a component of other gains, net on
the consolidated statement of operations. The company has excluded
from the non-GAAP measures $11.7 million, which is the value of the
settlement gain that exceeds the third-party legal costs incurred
during 2024 specific to this litigation matter, as this net gain is
not indicative of the ongoing performance of Huron's business. Of
the $3.3 million third-party legal costs incurred for this matter
in 2024, $2.7 million was incurred in the first quarter and $0.6
million was incurred in the second quarter. Third-party legal
expenses are recorded as a component of selling, general and
administrative expenses on the statement of operations. Third-party
legal costs incurred for this litigation matter during the three
and nine months ended September 30, 2023 were $1.2 million and $2.2
million, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241029303264/en/
MEDIA CONTACT Allie Bovis abovis@hcg.com INVESTOR
CONTACT John D. Kelly investor@hcg.com
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