Huron Announces Record Second Quarter 2024 Financial Results and Raises 2024 Earnings Guidance

SECOND QUARTER 2024 FINANCIAL HIGHLIGHTS

• Total revenues increased $24.9 million, or 7.2%, to a record $371.7 million in Q2 2024 from $346.8 million in Q2 2023.
• Net income increased $12.8 million, or 51.7%, to $37.5 million in Q2 2024, compared to $24.7 million in Q2 2023. Results for Q2 2024 include an $11.1 million litigation settlement gain, net of tax, related to a completed legal matter for which Huron was the plaintiff.
• Adjusted EBITDA⁽⁸⁾, a non-GAAP measure, increased $7.2 million, or 14.9%, to $55.7 million in Q2 2024 from $48.5 million in Q2 2023.
• Diluted earnings per share increased $0.76, or 59.8%, to $2.03 in Q2 2024, compared to $1.27 in Q2 2023. Results for Q2 2024 include the litigation settlement gain related to a completed legal matter for which Huron was the plaintiff, which had a favorable $0.60 impact on diluted earnings per share for the quarter.
• Adjusted diluted earnings per share⁽⁸⁾, a non-GAAP measure, increased $0.30, or 21.7%, to $1.68 in Q2 2024 from $1.38 in Q2 2023.
• Net cash provided by operating activities was a record $107.2 million in Q2 2024, compared to $78.2 million in Q2 2023.
• Huron returned $34.4 million to shareholders by repurchasing 0.4 million shares of the company's common stock in Q2 2024.

YEAR-TO-DATE 2024 HIGHLIGHTS AND 2024 GUIDANCE

• Total revenues increased $63.0 million, or 9.5%, to $727.6 million for the first six months of 2024 from $664.7 million for the same prior year period.
• Net income increased $17.4 million, or 45.5%, to $55.5 million for the first six months of 2024, compared to $38.1 million for the same prior year period. Results for the first six months of 2024 include an $11.1 million litigation settlement gain, net of tax, related to a completed legal matter for which Huron was the plaintiff.
• Adjusted EBITDA⁽⁸⁾, a non-GAAP measure, increased $11.5 million, or 14.8%, to $89.5 million for the first six months of 2024 from $78.0 million for the same prior year period.
• Diluted earnings per share increased $1.01, or 51.8%, to $2.96 for the first six months of 2024, compared to $1.95 for the same prior year period. Results for the first six months of 2024 include the litigation settlement gain related to a completed legal matter for 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⁽⁸⁾, a non-GAAP measure, increased $0.64, or 28.4%, to $2.89 for the first six months of 2024 from $2.25 for the same prior year period.
• Huron returned $96.7 million to shareholders by repurchasing 1.0 million shares of the company's common stock in the first six months of 2024, representing 5.4% of the company's common stock outstanding as of December 31, 2023.
• Huron updates its previous earnings guidance range for full year 2024, including increasing adjusted diluted earnings per share⁽⁸⁾ expectations to a range of $5.85 to $6.15.

OTHER HIGHLIGHTS

• Huron was named one of America's Best Management Consulting Firms for 2024 by Forbes, one of America's Best Mid-size Companies by Time magazine, and a Best Firm to Work For in 2024 by Consulting magazine.
• Huron was recognized as a 2024 employer of choice by U.S. News and World Report (Best Companies to Work For) and Forbes (America's Best Employers For Women).

Global professional services firm Huron (NASDAQ:HURN) today announced financial results for the quarter ended June 30, 2024.

"In the second quarter, we achieved record revenues, led by solid growth in our Healthcare and Education segments, and we continued to expand our margins. We are raising our full year 2024 earnings guidance, reflecting our first half performance and which continues our steady progress towards our financial goals," said Mark Hussey, chief executive officer and president of Huron. "We also generated record cash flow in the second quarter, enabling us to reduce our debt by $62 million while repurchasing $34 million of our outstanding shares."

"I am incredibly proud of our team for delivering performance that over the past ten quarters has outpaced our 2022 investor day financial objectives," added Hussey. "Our strengths in the Healthcare and Education industries, along with our expansive Digital capabilities, position us well to continue addressing our clients' needs and achieve our strategic and financial objectives."

SECOND QUARTER 2024 RESULTS

Revenues increased $24.9 million, or 7.2%, to a record $371.7 million for the second quarter of 2024, compared to $346.8 million for the second quarter of 2023. The increase in revenues was driven by continued strength in demand for Healthcare's Consulting and Managed Services and Digital capabilities, as well as an increase in demand for Education's Consulting and Managed Services capability, 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 capability.

Net income increased $12.8 million, or 51.7%, to $37.5 million for the second quarter of 2024, compared to $24.7 million for the same quarter last year. Results for the second quarter of 2024 include an $11.1 million litigation settlement gain, net of tax, related to a completed legal matter for which Huron was the plaintiff. Diluted earnings per share increased $0.76, or 59.8%, to $2.03 for the second quarter of 2024, compared to $1.27 for the second quarter of 2023. The litigation settlement gain recognized in the second quarter of 2024 had a favorable $0.60 impact on diluted earnings per share in the second quarter of 2024.

Second quarter 2024 earnings before interest, taxes, depreciation and amortization ("EBITDA")⁽⁸⁾ increased $19.2 million, or 40.7%, to $66.3 million, compared to $47.1 million in the same prior year period. Results for the second quarter of 2024 include a pre-tax $15.0 million litigation settlement gain related to the completed legal matter for 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).

Adjusted EBITDA⁽⁸⁾ increased $7.2 million, or 14.9%, to $55.7 million, or 15.0% of revenues, in the second quarter of 2024, compared to $48.5 million, or 14.0% of revenues, in the same quarter last year. Adjusted net income⁽⁸⁾ increased $4.0 million, or 14.8%, to $30.9 million, or $1.68 per diluted share, for the second quarter of 2024, compared to $27.0 million, or $1.38 per diluted share, for the same quarter in 2023.

The number of revenue-generating professionals⁽¹⁾ increased 13.0% to 5,848 as of June 30, 2024 from 5,174 as of June 30, 2023. The utilization rate⁽⁷⁾ of the company's Consulting capability was 73.7% during the second quarter of 2024, compared to 76.0% during the same period last year. The utilization rate⁽⁷⁾ for the company's Digital capability increased to 75.0% during the second quarter of 2024, compared to 74.7% during the same period last year.

Additionally, Huron returned $34.4 million to shareholders in the second quarter of 2024 by repurchasing 376,493 shares of the company's common stock.

YEAR-TO-DATE 2024 RESULTS

Revenues increased $63.0 million, or 9.5%, to $727.6 million for the first six months of 2024, compared to $664.7 million for the first six months of 2023. The increase in revenues 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 capability.

Net income increased $17.4 million, or 45.5%, to $55.5 million for the first six months of 2024, compared to $38.1 million for the same prior year period. Results for the first six months of 2024 include an $11.1 million litigation settlement gain, net of tax, related to a completed legal matter for which Huron was the plaintiff. Diluted earnings per share increased $1.01, or 51.8%, to $2.96 for the first six months of 2024, compared to $1.95 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 six months ended June 30, 2024.

EBITDA⁽⁸⁾ for the first six months of 2024 increased $21.4 million, or 28.9%, to $95.2 million, compared to $73.8 million in the same prior year period. Results for the first six months of 2024 include a pre-tax $15.0 million litigation settlement gain related to the completed legal matter for 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):

Adjusted EBITDA⁽⁸⁾ increased $11.5 million, or 14.8%, to $89.5 million, or 12.3% of revenues, for the first six months of 2024, compared to $78.0 million, or 11.7% of revenues, in the same prior year period. Adjusted net income⁽⁸⁾ increased $10.2 million, or 23.2%, to $54.2 million, or $2.89 per diluted share, for the first six months of 2024, compared to $44.0 million, or $2.25 per diluted share, for the same prior year period.

The number of revenue-generating professionals⁽¹⁾ increased 13.0% to 5,848 as of June 30, 2024 from 5,174 as of June 30, 2023. The utilization rate⁽⁷⁾ of the company's Consulting capability was 72.0% for the first six months of 2024, compared to 76.1% during the same period last year. The utilization rate⁽⁷⁾ for the company's Digital capability increased to 74.6% for the first six months of 2024, compared to 72.8% during the same period last year.

Additionally, Huron returned $96.7 million to shareholders in the first six months of 2024 by repurchasing 1,001,191 shares of the company's common stock, representing 5.4% of the company's common stock outstanding as of December 31, 2023.

OPERATING INDUSTRIES

The company's year-to-date 2024 revenues by operating segment as a percentage of total company revenues are as follows: Healthcare (51%); Education (32%); and Commercial (17%). 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 June 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 $1.46 billion to $1.50 billion. The company is increasing its guidance for full year 2024 adjusted EBITDA as a percentage of revenues⁽⁸⁾ to a range of 13.0% to 13.5% and adjusted diluted earnings per share⁽⁸⁾ to a range of $5.85 to $6.15.

SECOND QUARTER 2024 WEBCAST

The company will host a webcast to discuss its financial results today, July 30, 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⁽⁸⁾

In evaluating the company's financial performance and outlook, management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a percentage of revenues, 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.

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