Huron Consulting Group Inc. earnings

Management highlights

- Execution of growth strategy continues to deliver performance consistent with 2025 goals. - Revenues before reimbursable expenses (RVR) increased 12% in first quarter of 2026. - Trajectory of margin expansion due to disciplined execution. - Affirming annual RBR and margin guidance. - Healthcare segment has strong demand for performance improvement, revenue cycle managed services, etc. - Education segment has strong market position in higher education. - Commercial segment has strong demand for financial advisory and strategy offerings. - Investing in expanding offerings to address client needs, bullish on AI's impact.

Guidance

- Affirming 2026 guidance for RVR, adjusted EBITDA margin, and adjusted diluted earnings per share. - RVR in range of $1.78 billion to $1.86 billion, adjusted EBITDA in range of 14.5% to 15% of RVR, adjusted non-GAAP EPS in range of $8.35 to $9.15. - Full-year free cash flow expected to be in range of positive $180 million to $220 million.

Segment performance

Healthcare segment: First quarter RVR grew 14% over prior year quarter, generated 51% total company RBR, record RBR of $225.2 million, up 13.5% from first quarter of 2025, operating income margin flat at 28.4%. Education segment: RBR in first quarter of 2026 was $127.5 million, up 3.8% from first quarter of 2025, generated 29% of total company RVR, operating income margin 21.6%. Commercial segment: First quarter RBR grew 22% over prior year quarter, generated 20% of total company RBR, RBR of $91 million, up 22.3% from first quarter of 2025, operating income margin 16.4%.

Analyst Q&A

• Q: Talked about pipeline development throughout the quarter, where bookings sit.

  A: In trailing six-month period, bookings were up greater than 20% across all three segments, backlog remains historically high coverage ratios, all three segments' pipelines up as of April vs Dec 31st and near record levels.

• Q: Provide segment level color on growth by capability.

  A: Healthcare: consulting up 13%, managed services up 42%, digital down 7%. Education: consulting slightly down, digital up 10%, demand services mid-single-digit up. Commercial: consulting up approx 50% (organic), digital down mid-tickle digit.

• Q: Any change to demand within commercial as the quarter progressed.

  A: Didn't see any mix change by industry within commercial, demand remains strong for energy and utilities, digital had timing issues but expected to get back to mid to upper single-digit growth range next quarter.

• Q: Talk about pace of headcount growth year over year and sequentially.

  A: Year over year larger percent increase in healthcare business, education industry pretty steady, commercial impacted by acquisitions, majority of global headcount ads in managed services part of business.

• Q: Update on leverage perspective and capital deployment mix.

  A: Remain committed to low twos leverage ratio at end of year, pace of share repurchases will be slower through remainder of year, strategic tuck in M&A expected to be slower pace than last year, M&A contribution to growth rate likely closer to lower end of 2% to 4% range.

• Q: Comment on AI being a growth driver.

  A: Been successful at organically investing in AI, have chief AI officer, confident in in-house capabilities, partnerships also help, significant portion of revenue comes from digital business with native talent for digital and AI related skills.