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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q 
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31,September 30, 2023
OR 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 000-50976 
HURON CONSULTING GROUP INC.
(Exact name of registrant as specified in its charter)
 
Delaware 01-0666114
(State or other jurisdiction of
incorporation or organization)
 (IRS Employer
Identification Number)
550 West Van Buren Street
Chicago, Illinois
60607
(Address of principal executive offices)
(Zip Code)
(312) 583-8700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareHURNNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated FilerNon-accelerated FilerSmaller Reporting 
Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of April 25,October 26, 2023, 19,211,70418,747,865 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.


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Huron Consulting Group Inc.
HURON CONSULTING GROUP INC.
INDEX
  Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



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PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

HURON CONSULTING GROUP INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited) 
March 31,
2023
December 31,
2022
September 30,
2023
December 31,
2022
AssetsAssetsAssets
Current assets:Current assets:Current assets:
Cash and cash equivalentsCash and cash equivalents$12,026 $11,834 Cash and cash equivalents$9,398 $11,834 
Receivables from clients, net of allowances of $12,803 and $10,600, respectively147,037 147,852 
Unbilled services, net of allowances of $5,937 and $3,850, respectively173,454 141,781 
Receivables from clients, net of allowances of $16,011 and $10,600, respectivelyReceivables from clients, net of allowances of $16,011 and $10,600, respectively166,330 147,852 
Unbilled services, net of allowances of $4,779 and $3,850, respectivelyUnbilled services, net of allowances of $4,779 and $3,850, respectively192,853 141,781 
Income tax receivableIncome tax receivable275 960 Income tax receivable4,500 960 
Prepaid expenses and other current assetsPrepaid expenses and other current assets28,718 26,057 Prepaid expenses and other current assets32,450 26,057 
Total current assetsTotal current assets361,510 328,484 Total current assets405,531 328,484 
Property and equipment, netProperty and equipment, net24,179 26,107 Property and equipment, net22,919 26,107 
Deferred income taxes, netDeferred income taxes, net1,410 1,554 Deferred income taxes, net1,735 1,554 
Long-term investmentsLong-term investments96,473 91,194 Long-term investments95,387 91,194 
Operating lease right-of-use assetsOperating lease right-of-use assets28,692 30,304 Operating lease right-of-use assets23,441 30,304 
Other non-current assetsOther non-current assets80,154 73,039 Other non-current assets87,486 73,039 
Intangible assets, netIntangible assets, net21,161 23,392 Intangible assets, net20,090 23,392 
GoodwillGoodwill624,966 624,966 Goodwill625,711 624,966 
Total assetsTotal assets$1,238,545 $1,199,040 Total assets$1,282,300 $1,199,040 
Liabilities and stockholders’ equityLiabilities and stockholders’ equityLiabilities and stockholders’ equity
Current liabilities:Current liabilities:Current liabilities:
Accounts payableAccounts payable$9,556 $14,254 Accounts payable$11,987 $14,254 
Accrued expenses and other current liabilitiesAccrued expenses and other current liabilities28,938 27,268 Accrued expenses and other current liabilities31,591 27,268 
Accrued payroll and related benefitsAccrued payroll and related benefits78,354 171,723 Accrued payroll and related benefits183,872 171,723 
Current maturities of operating lease liabilitiesCurrent maturities of operating lease liabilities10,825 10,530 Current maturities of operating lease liabilities11,116 10,530 
Deferred revenuesDeferred revenues20,542 21,909 Deferred revenues26,217 21,909 
Total current liabilitiesTotal current liabilities148,215 245,684 Total current liabilities264,783 245,684 
Non-current liabilities:Non-current liabilities:Non-current liabilities:
Deferred compensation and other liabilitiesDeferred compensation and other liabilities38,404 33,614 Deferred compensation and other liabilities32,700 33,614 
Long-term debtLong-term debt447,000 290,000 Long-term debt358,000 290,000 
Operating lease liabilities, net of current portionOperating lease liabilities, net of current portion43,393 45,556 Operating lease liabilities, net of current portion39,207 45,556 
Deferred income taxes, netDeferred income taxes, net32,564 32,146 Deferred income taxes, net34,256 32,146 
Total non-current liabilitiesTotal non-current liabilities561,361 401,316 Total non-current liabilities464,163 401,316 
Commitments and contingenciesCommitments and contingenciesCommitments and contingencies
Stockholders’ equityStockholders’ equityStockholders’ equity
Common stock; $0.01 par value; 500,000,000 shares authorized; 22,047,299 and 22,507,159 shares issued, respectively220 223 
Treasury stock, at cost, 2,842,144 and 2,711,712 shares, respectively(141,353)(137,556)
Common stock; $0.01 par value; 500,000,000 shares authorized; 21,597,274 and 22,507,159 shares issued, respectivelyCommon stock; $0.01 par value; 500,000,000 shares authorized; 21,597,274 and 22,507,159 shares issued, respectively215 223 
Treasury stock, at cost, 2,848,126 and 2,711,712 shares, respectivelyTreasury stock, at cost, 2,848,126 and 2,711,712 shares, respectively(141,729)(137,556)
Additional paid-in capitalAdditional paid-in capital284,420 318,706 Additional paid-in capital261,995 318,706 
Retained earningsRetained earnings365,967 352,548 Retained earnings412,195 352,548 
Accumulated other comprehensive incomeAccumulated other comprehensive income19,715 18,119 Accumulated other comprehensive income20,678 18,119 
Total stockholders’ equityTotal stockholders’ equity528,969 552,040 Total stockholders’ equity553,354 552,040 
Total liabilities and stockholders’ equityTotal liabilities and stockholders’ equity$1,238,545 $1,199,040 Total liabilities and stockholders’ equity$1,282,300 $1,199,040 
The accompanying notes are an integral part of the consolidated financial statements.
1

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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share amounts)
(Unaudited) 
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
202320222023202220232022
Revenues and reimbursable expenses:Revenues and reimbursable expenses:Revenues and reimbursable expenses:
RevenuesRevenues$317,895 $260,049 Revenues$358,178 $285,370 $1,022,832 $818,744 
Reimbursable expensesReimbursable expenses8,490 4,726 Reimbursable expenses9,288 6,816 25,918 19,034 
Total revenues and reimbursable expensesTotal revenues and reimbursable expenses326,385 264,775 Total revenues and reimbursable expenses367,466 292,186 1,048,750 837,778 
Operating expenses:Operating expenses:Operating expenses:
Direct costs (exclusive of depreciation and amortization included below)Direct costs (exclusive of depreciation and amortization included below)228,383 187,247 Direct costs (exclusive of depreciation and amortization included below)244,774 193,368 708,355 569,848 
Reimbursable expensesReimbursable expenses8,624 4,756 Reimbursable expenses9,497 6,917 26,242 19,249 
Selling, general and administrative expensesSelling, general and administrative expenses62,289 48,395 Selling, general and administrative expenses64,347 54,458 190,655 148,886 
Restructuring chargesRestructuring charges2,284 1,555 Restructuring charges5,402 1,332 9,385 4,956 
Depreciation and amortizationDepreciation and amortization6,374 6,864 Depreciation and amortization6,104 6,812 18,621 20,578 
Total operating expensesTotal operating expenses307,954 248,817 Total operating expenses330,124 262,887 953,258 763,517 
Operating incomeOperating income18,431 15,958 Operating income37,342 29,299 95,492 74,261 
Other income (expense), net:Other income (expense), net:Other income (expense), net:
Interest expense, net of interest incomeInterest expense, net of interest income(4,303)(2,196)Interest expense, net of interest income(5,047)(3,111)(15,146)(7,753)
Other income, net1,719 24,365 
Other income (expense), netOther income (expense), net(1,000)(785)1,781 18,699 
Total other income (expense), netTotal other income (expense), net(2,584)22,169 Total other income (expense), net(6,047)(3,896)(13,365)10,946 
Income before taxesIncome before taxes15,847 38,127 Income before taxes31,295 25,403 82,127 85,207 
Income tax expenseIncome tax expense2,428 11,275 Income tax expense9,779 7,662 22,480 26,739 
Net incomeNet income$13,419 $26,852 Net income$21,516 $17,741 $59,647 $58,468 
Earnings per share:Earnings per share:Earnings per share:
Net income per basic shareNet income per basic share$0.70 $1.29 Net income per basic share$1.15 $0.88 $3.15 $2.85 
Net income per diluted shareNet income per diluted share$0.68 $1.27 Net income per diluted share$1.10 $0.86 $3.05 $2.80 
Weighted average shares used in calculating earnings per share:Weighted average shares used in calculating earnings per share:Weighted average shares used in calculating earnings per share:
BasicBasic19,119 20,850 Basic18,770 20,109 18,941 20,511 
DilutedDiluted19,699 21,167 Diluted19,475 20,615 19,578 20,899 
Comprehensive income (loss):Comprehensive income (loss):Comprehensive income (loss):
Net incomeNet income$13,419 $26,852 Net income$21,516 $17,741 $59,647 $58,468 
Foreign currency translation adjustments, net of taxForeign currency translation adjustments, net of tax52 (43)Foreign currency translation adjustments, net of tax(662)(1,034)(283)(1,733)
Unrealized gain (loss) on investment, net of taxUnrealized gain (loss) on investment, net of tax3,873 (2,661)Unrealized gain (loss) on investment, net of tax(1,350)(830)3,076 (2,718)
Unrealized gain (loss) on cash flow hedging instruments, net of taxUnrealized gain (loss) on cash flow hedging instruments, net of tax(2,329)4,325 Unrealized gain (loss) on cash flow hedging instruments, net of tax(368)3,762 (234)9,058 
Other comprehensive income1,596 1,621 
Other comprehensive income (loss)Other comprehensive income (loss)(2,380)1,898 2,559 4,607 
Comprehensive incomeComprehensive income$15,015 $28,473 Comprehensive income$19,136 $19,639 $62,206 $63,075 
The accompanying notes are an integral part of the consolidated financial statements.
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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share amounts)
(Unaudited)
Three Months Ended September 30,
Common StockTreasury StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income
Stockholders’
Equity
Common StockTreasury StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income
Stockholders’
Equity
SharesAmountSharesAmountSharesAmountSharesAmount
Balance at December 31, 202222,231,593 $223 (2,953,147)$(137,556)$318,706 $352,548 $18,119 $552,040 
Comprehensive income13,419 1,596 15,015 
Balance at June 30, 2023Balance at June 30, 202321,732,924 $218 (2,969,196)$(141,407)$279,070 $390,679 $23,058 $551,618 
Comprehensive income (loss)Comprehensive income (loss)21,516 (2,380)19,136 
Issuance of common stock in connection with:Issuance of common stock in connection with:Issuance of common stock in connection with:
Restricted stock awards, net of cancellationsRestricted stock awards, net of cancellations297,581 118,449 5,732 (5,735)— Restricted stock awards, net of cancellations16,511 — 385 — — — 
Exercise of stock options14,145 — 627 627 
Purchase of businessPurchase of business16,337 — 1,646 1,646 
Share-based compensationShare-based compensation15,089 15,089 Share-based compensation10,063 10,063 
Shares redeemed for employee tax withholdingsShares redeemed for employee tax withholdings(135,420)(9,529)(9,529)Shares redeemed for employee tax withholdings(3,820)(322)(322)
Share repurchasesShare repurchases(632,894)(6)(44,267)(44,273)Share repurchases(290,288)(3)(28,784)(28,787)
Balance at March 31, 202321,910,425 $220 (2,970,118)$(141,353)$284,420 $365,967 $19,715 $528,969 
Balance at September 30, 2023Balance at September 30, 202321,475,484 $215 (2,972,631)$(141,729)$261,995 $412,195 $20,678 $553,354 
Balance at December 31, 202123,868,918 $239 (2,908,849)$(135,969)$413,794 $276,996 $16,840 $571,900 
Balance at June 30, 2022Balance at June 30, 202223,183,446 $232 (2,935,799)$(136,425)$374,280 $317,723 $19,549 $575,359 
Comprehensive incomeComprehensive income26,852 1,621 28,473 Comprehensive income17,741 1,898 19,639 
Issuance of common stock in connection with:Issuance of common stock in connection with:Issuance of common stock in connection with:
Restricted stock awards, net of cancellationsRestricted stock awards, net of cancellations277,629 130,240 7,486 (7,489)— Restricted stock awards, net of cancellations36,251 — (835)(46)46 — 
Exercise of stock optionsExercise of stock options16,805 — 647 647 Exercise of stock options6,000 — 236 236 
Share-based compensationShare-based compensation12,051 12,051 Share-based compensation7,160 7,160 
Shares redeemed for employee tax withholdingsShares redeemed for employee tax withholdings(139,491)(6,884)(6,884)Shares redeemed for employee tax withholdings(8,020)(529)(529)
Share repurchasesShare repurchases(523,399)(5)(23,900)(23,905)Share repurchases(685,641)(7)(45,597)(45,604)
Balance at March 31, 202223,639,953 $237 (2,918,100)$(135,367)$395,103 $303,848 $18,461 $582,282 
Balance at September 30, 2022Balance at September 30, 202222,540,056 $225 (2,944,654)$(137,000)$336,125 $335,464 $21,447 $556,261 
Nine Months Ended September 30,
Common StockTreasury StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income
Stockholders’
Equity
SharesAmountSharesAmount
Balance at December 31, 202222,231,593 $223 (2,953,147)$(137,556)$318,706 $352,548 $18,119 $552,040 
Comprehensive income59,647 2,559 62,206 
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations322,775 122,220 5,877 (5,880)— 
Exercise of stock options21,609 — 987 987 
Purchase of business16,337 — 1,646 1,646 
Share-based compensation34,958 34,958 
Shares redeemed for employee tax withholdings(141,704)(10,050)(10,050)
Share repurchases(1,116,830)(11)(88,422)(88,433)
Balance at September 30, 202321,475,484 $215 (2,972,631)$(141,729)$261,995 $412,195 $20,678 $553,354 
Balance at December 31, 202123,868,918 $239 (2,908,849)$(135,969)$413,794 $276,996 $16,840 $571,900 
Comprehensive income58,468 4,607 63,075 
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations341,189 114,290 6,509 (6,512)— 
Exercise of stock options36,536 — 1,421 1,421 
Share-based compensation25,260 25,260 
Shares redeemed for employee tax withholdings(150,095)(7,540)(7,540)
Share repurchases(1,706,587)(17)(97,838)(97,855)
Balance at September 30, 202222,540,056 $225 (2,944,654)$(137,000)$336,125 $335,464 $21,447 $556,261 
The accompanying notes are an integral part of the consolidated financial statements.
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HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
Nine Months Ended
September 30,
2023202220232022
Cash flows from operating activities:Cash flows from operating activities:Cash flows from operating activities:
Net incomeNet income$13,419 $26,852 Net income$59,647 $58,468 
Adjustments to reconcile net income to cash flows from operating activities:Adjustments to reconcile net income to cash flows from operating activities:Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortizationDepreciation and amortization6,407 6,864 Depreciation and amortization18,653 20,578 
Non-cash lease expenseNon-cash lease expense1,644 1,640 Non-cash lease expense4,840 4,768 
Lease-related impairment charge1,870 — 
Lease-related impairment chargesLease-related impairment charges5,584 — 
Share-based compensationShare-based compensation11,562 7,935 Share-based compensation35,398 23,083 
Amortization of debt discount and issuance costsAmortization of debt discount and issuance costs191 198 Amortization of debt discount and issuance costs577 595 
Allowances for doubtful accountsAllowances for doubtful accounts28 Allowances for doubtful accounts53 47 
Deferred income taxesDeferred income taxes— 7,129 Deferred income taxes890 7,133 
(Gain) loss on sale of property and equipment, excluding transaction costs(1,067)
Gain on sale of property and equipment, excluding transaction costsGain on sale of property and equipment, excluding transaction costs(61)(1,117)
Change in fair value of contingent consideration liabilitiesChange in fair value of contingent consideration liabilities435 12 Change in fair value of contingent consideration liabilities(251)(34)
Change in fair value of preferred stock investmentChange in fair value of preferred stock investment— (26,964)Change in fair value of preferred stock investment— (26,964)
Other, netOther, net— 
Changes in operating assets and liabilities, net of acquisitions and divestiture:Changes in operating assets and liabilities, net of acquisitions and divestiture:Changes in operating assets and liabilities, net of acquisitions and divestiture:
(Increase) decrease in receivables from clients, net(Increase) decrease in receivables from clients, net827 5,791 (Increase) decrease in receivables from clients, net(18,508)(44,759)
(Increase) decrease in unbilled services, net(Increase) decrease in unbilled services, net(31,669)(35,239)(Increase) decrease in unbilled services, net(51,092)(31,937)
(Increase) decrease in current income tax receivable / payable, net(Increase) decrease in current income tax receivable / payable, net1,487 3,266 (Increase) decrease in current income tax receivable / payable, net(4,365)14,704 
(Increase) decrease in other assets(Increase) decrease in other assets(5,205)1,361 (Increase) decrease in other assets(6,243)3,468 
Increase (decrease) in accounts payable and other liabilitiesIncrease (decrease) in accounts payable and other liabilities(1,881)(7,044)Increase (decrease) in accounts payable and other liabilities(5,361)(14,538)
Increase (decrease) in accrued payroll and related benefitsIncrease (decrease) in accrued payroll and related benefits(89,843)(70,689)Increase (decrease) in accrued payroll and related benefits10,805 (18,883)
Increase (decrease) in deferred revenuesIncrease (decrease) in deferred revenues(1,349)828 Increase (decrease) in deferred revenues4,328 (397)
Net cash used in operating activities(92,101)(79,099)
Net cash provided by (used in) operating activitiesNet cash provided by (used in) operating activities54,894 (5,779)
Cash flows from investing activities:Cash flows from investing activities:Cash flows from investing activities:
Purchases of property and equipmentPurchases of property and equipment(1,956)(3,924)Purchases of property and equipment(5,147)(9,768)
Investment in life insurance policiesInvestment in life insurance policies(1,833)— Investment in life insurance policies(2,601)(283)
Distributions from life insurance policiesDistributions from life insurance policies2,956 2,958 
Purchases of businessesPurchases of businesses38 (2,289)Purchases of businesses(1,613)(1,948)
Capitalization of internally developed software costsCapitalization of internally developed software costs(6,575)(2,060)Capitalization of internally developed software costs(19,610)(6,855)
Proceeds from note receivableProceeds from note receivable154 — Proceeds from note receivable154 157 
Proceeds from sale of property and equipmentProceeds from sale of property and equipment— 4,750 Proceeds from sale of property and equipment62 4,753 
Divestiture of businessDivestiture of business— 207 Divestiture of business— 207 
Net cash used in investing activitiesNet cash used in investing activities(10,172)(3,316)Net cash used in investing activities(25,799)(10,779)
Cash flows from financing activities:Cash flows from financing activities:Cash flows from financing activities:
Proceeds from exercises of stock optionsProceeds from exercises of stock options627 648 Proceeds from exercises of stock options987 1,421 
Shares redeemed for employee tax withholdingsShares redeemed for employee tax withholdings(9,529)(6,884)Shares redeemed for employee tax withholdings(10,050)(7,540)
Share repurchasesShare repurchases(45,133)(24,097)Share repurchases(88,897)(95,474)
Proceeds from bank borrowingsProceeds from bank borrowings201,000 150,000 Proceeds from bank borrowings292,000 287,000 
Repayments of bank borrowingsRepayments of bank borrowings(44,000)(47,780)Repayments of bank borrowings(224,000)(178,780)
Payments for debt issuance costsPayments for debt issuance costs(16)— Payments for debt issuance costs(58)— 
Deferred payments on business acquisitionDeferred payments on business acquisition(500)(500)Deferred payments on business acquisition(1,500)(1,875)
Net cash provided by financing activities102,449 71,387 
Net cash provided by (used in) financing activitiesNet cash provided by (used in) financing activities(31,518)4,752 
Effect of exchange rate changes on cashEffect of exchange rate changes on cash16 (5)Effect of exchange rate changes on cash(13)(144)
Net increase (decrease) in cash and cash equivalents192 (11,033)
Net decrease in cash and cash equivalentsNet decrease in cash and cash equivalents(2,436)(11,950)
Cash and cash equivalents at beginning of the periodCash and cash equivalents at beginning of the period11,834 20,781 Cash and cash equivalents at beginning of the period11,834 20,781 
Cash and cash equivalents at end of the periodCash and cash equivalents at end of the period$12,026 $9,748 Cash and cash equivalents at end of the period$9,398 $8,831 
Supplemental disclosure of cash flow information:Supplemental disclosure of cash flow information:Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:Non-cash investing and financing activities:Non-cash investing and financing activities:
Property and equipment expenditures and capitalized software included in current liabilitiesProperty and equipment expenditures and capitalized software included in current liabilities$4,062 $2,682 Property and equipment expenditures and capitalized software included in current liabilities$5,308 $3,474 
Operating lease right-of-use assets obtained in exchange for operating lease liabilitiesOperating lease right-of-use assets obtained in exchange for operating lease liabilities$748 $102 Operating lease right-of-use assets obtained in exchange for operating lease liabilities$2,320 $1,908 
Contingent consideration related to purchase of business$— $869 
Common stock issued related to purchase of businessCommon stock issued related to purchase of business$1,646 $— 
Contingent consideration accrued related to purchases of businessesContingent consideration accrued related to purchases of businesses$374 $869 
Share repurchases included in current liabilitiesShare repurchases included in current liabilities$— $2,572 
Excise tax on net share repurchases included in current liabilitiesExcise tax on net share repurchases included in current liabilities$643 $— 
    The accompanying notes are an integral part of the consolidated financial statements.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)

1. Description of Business
Huron is a global professional services firm that partners with clients to develop growth strategies, optimize operations and accelerate digital transformation using an enterprise portfolio of technology, data and analytics solutions to empower clients to own their future. By collaborating with clients, embracing diverse perspectives, encouraging new ideas and challenging the status quo, we create sustainable results for the organizations we serve.
We provide our services and products and manage our business through three operating segments: Healthcare, Education, and Commercial. See Note 13 “Segment Information” for more information.
2. Basis of Presentation and Significant Accounting Policies
The accompanying unaudited consolidated financial statements reflect the financial position, results of operations, and cash flows as of and for the three and nine months ended March 31,September 30, 2023 and 2022. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair statement of our financial position, results of operations, and cash flows for the interim periods presented in conformity with GAAP. These financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 included inand our Annual ReportQuarterly Reports on Form 10-K.10-Q for the periods ended March 31, 2023 and June 30, 2023. Our results for any interim period are not necessarily indicative of results for a full year or any other interim period.
3. Goodwill and Intangible Assets
Goodwill
The table below sets forth the changes in the carrying amountvalue of goodwill by reportable segment for the threenine months ended March 31,September 30, 2023.

Healthcare
EducationCommercialTotal
Healthcare
EducationCommercialTotal
Balance as of December 31, 2022:Balance as of December 31, 2022:Balance as of December 31, 2022:
GoodwillGoodwill$644,238 $123,652 $312,968 $1,080,858 Goodwill$644,238 $123,652 $312,968 $1,080,858 
Accumulated impairment lossesAccumulated impairment losses(190,024)(1,417)(264,451)(455,892)Accumulated impairment losses(190,024)(1,417)(264,451)(455,892)
Goodwill, net as of December 31, 2022Goodwill, net as of December 31, 2022$454,214 $122,235 $48,517 $624,966 Goodwill, net as of December 31, 2022$454,214 $122,235 $48,517 $624,966 
Goodwill recorded in connection with business acquisition(1)
Goodwill recorded in connection with business acquisition(1)
745 — — 745 
Goodwill, net as of March 31, 2023$454,214 $122,235 $48,517 $624,966 
Goodwill, net as of September 30, 2023Goodwill, net as of September 30, 2023$454,959 $122,235 $48,517 $625,711 
(1)On September 1, 2023, we completed the acquisition of Roundtable Analytics, Inc. ("Roundtable"), a healthcare analytics company. The results of operations of Roundtable are included within our consolidated financial statements and results of operations of our Healthcare segment as of the acquisition date. The acquisition of Roundtable is not significant to our consolidated financial statements.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
Intangible Assets
Intangible assets as of March 31,September 30, 2023 and December 31, 2022 consisted of the following:
As of March 31, 2023As of December 31, 2022As of September 30, 2023As of December 31, 2022
Useful Life 
(in years)
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Useful Life 
(in years)
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Customer relationshipsCustomer relationships5 to 13$65,083 $49,257 $74,583 $57,219 Customer relationships5 to 13$65,083 $52,003 $74,583 $57,219 
Technology and softwareTechnology and software2 to 513,330 8,513 13,330 7,975 Technology and software2 to 516,230 9,613 13,330 7,975 
Trade namesTrade names66,000 6,000 6,000 5,907 Trade names66,000 6,000 6,000 5,907 
Non-competition agreementsNon-competition agreements2 to 5920 402 920 340 Non-competition agreements2 to 5920 527 920 340 
TotalTotal$85,333 $64,172 $94,833 $71,441 Total$88,233 $68,143 $94,833 $71,441 
Identifiable intangible assets with finite lives are amortized over their estimated useful lives. Customer relationships as well as certain trade names and technology and software are amortized on an accelerated basis to correspond to the cash flows expected to be derived from the assets. All other intangible assets with finite lives are amortized on a straight-line basis.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
Intangible asset amortization expense was $2.2$2.0 million and $2.9$2.8 million for the three months ended March 31,September 30, 2023 and 2022, respectively; and $6.2 million and $8.5 million for the nine months ended September 30, 2023 and 2022, respectively. The table below sets forth the estimated annual amortization expense for the intangible assets recorded as of March 31,September 30, 2023.
Year Ending December 31,Year Ending December 31,Estimated Amortization ExpenseYear Ending December 31,Estimated Amortization Expense
20232023$8,122 2023$8,219 
20242024$4,674 2024$5,554 
20252025$3,503 2025$4,344 
20262026$2,519 2026$3,112 
20272027$1,773 2027$2,127 
Actual future amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, and other factors.
4. Revenues
For the three months ended March 31,September 30, 2023 and 2022, we recognized revenues of $317.9$358.2 million and $260.0$285.4 million, respectively. Of the $317.9$358.2 million recognized in the firstthird quarter of 2023, we recognized revenues of $1.2$9.6 million from obligations satisfied, or partially satisfied, in prior periods, of which $7.1 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements and $2.5 million was due to the release of allowances on receivables from clients and unbilled services. DuringOf the $285.4 million recognized in the third quarter of 2022, we recognized revenues of $3.5 million from obligations satisfied, or partially satisfied, in prior periods, which was primarily due to the release of allowances on receivables from clients and unbilled services.
For the nine months ended September 30, 2023 and 2022, we recognized revenues of $1.02 billion and $818.7 million, respectively. Of the $1.02 billion recognized in the first quarternine months of 2023, we also recognized a $2.5revenues of $10.4 million decrease to revenuesfrom obligations satisfied, or partially satisfied, in prior periods, of which $9.1 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements. Of the $260.0 million recognized in the first quarter of 2022, we recognized revenues of $1.9 million from obligations satisfied, or partially satisfied, in prior periods, of which $1.0arrangements and $1.3 million was primarily due to the release of allowances on receivables from clients and unbilled services, and $0.9services. Of the $818.7 million recognized in the first nine months of 2022, we recognized revenues of $4.7 million from obligations satisfied, or partially satisfied, in prior periods, of which $2.5 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements.arrangements and $2.2 million was primarily due to the release of allowances on receivables from clients and unbilled services.
As of March 31,September 30, 2023, we had $143.8$228.4 million of remaining performance obligations under engagements with original expected durations greater than one year. These remaining performance obligations exclude variable consideration which has been excluded from the total transaction price due to the constraint and performance obligations under time-and-expense engagements which are recognized in the amount invoiced. Of the $143.8$228.4 million of performance obligations, we expect to recognize $61.9$25.8 million as revenue in 2023, $33.5$72.6 million in 2024, and the remaining $48.4$130.0 million thereafter. Actual revenue recognition could differ from these amounts as a result of changes in the
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
estimated timing of work to be performed, adjustments to estimated variable consideration in performance-based arrangements, or other factors.
Contract Assets and Liabilities
The payment terms and conditions in our customer contracts vary. Differences between the timing of billings and the recognition of revenue are recognized as either unbilled services or deferred revenues in the consolidated balance sheets.
Unbilled services include revenues recognized for services performed but not yet billed to clients. Services performed that we are not yet entitled to bill because certain events, such as the completion of the measurement period or client approval in performance-based engagements, must occur are recorded as contract assets and included within unbilled services, net. The contract asset, net balance as of March 31,September 30, 2023 and December 31, 2022 was $45.1$58.0 million and $50.2 million, respectively. The $5.1$7.8 million decreaseincrease primarily reflects timing differences between the completion of our performance obligations and the amounts billed or billable to clients in accordance with their contractual billing terms.
Client prepayments and retainers are classified as deferred revenues and recognized over future periods in accordance with the applicable engagement agreement and our revenue recognition accounting policy. Our deferred revenues balance as of March 31,September 30, 2023 and December 31, 2022 was $20.5$26.2 million and $21.9 million, respectively. The $1.4$4.3 million decreaseincrease primarily reflects timing differences between client payments in accordance with their contract terms and the completion of our performance obligations. For the three and nine months ended March 31,September 30, 2023, $16.4$0.9 million and $21.2 million of revenues recognized were included in the deferred revenue balance as of December 31, 2022.2022, respectively.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
5. Earnings Per Share
Basic earnings per share excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period, excluding unvested restricted common stock. Diluted earnings per share reflects the potential reduction in earnings per share that could occur if securities or other contracts to issue common stock were exercised or converted into common stock under the treasury stock method. Such securities or other contracts include unvested restricted stock awards, unvested restricted stock units, and outstanding common stock options, to the extent dilutive. In periods for which we report a net loss, diluted weighted average common shares outstanding excludes all potential common stock equivalents as their impact on diluted net loss per share would be anti-dilutive.
Earnings per share under the basic and diluted computations are as follows: 
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
20232022 2023202220232022
Net incomeNet income$13,419 $26,852 Net income$21,516 $17,741 $59,647 $58,468 
Weighted average common shares outstanding – basicWeighted average common shares outstanding – basic19,119 20,850 Weighted average common shares outstanding – basic18,770 20,109 18,941 20,511 
Weighted average common stock equivalentsWeighted average common stock equivalents580 317 Weighted average common stock equivalents705 506 637 388 
Weighted average common shares outstanding – dilutedWeighted average common shares outstanding – diluted19,699 21,167 Weighted average common shares outstanding – diluted19,475 20,615 19,578 20,899 
Net income per basic shareNet income per basic share$0.70 $1.29 Net income per basic share$1.15 $0.88 $3.15 $2.85 
Net income per diluted shareNet income per diluted share$0.68 $1.27 Net income per diluted share$1.10 $0.86 $3.05 $2.80 
The number of anti-dilutive securities excluded from the computation of the weighted average common stock equivalents presented above for the three and nine months ended March 31,September 30, 2023 and 2022 were less than 0.1 million shares and 0.4 million shares, respectively, and related to unvested restricted stock and outstanding common stock options.
In November 2020, our board of directors authorized a share repurchase program permitting us to repurchase up to $50 million of our common stock through December 31, 2021. Subsequent to the initial authorization, our board of directors authorized extensions of the share repurchase program through December 31, 2023 and increased the authorized amount to $300 million. In the fourth quarter of 2023, our board of directors authorized a further extension of the share repurchase program through December 31, 2024 and increased the authorized amount under the share repurchase program from $300 million to $400 million. The amount and timing of repurchases under the share repurchase program were and will continue to be determined by management and depend on a variety of factors, including the trading price of our common stock, capacity under our credit facility, general market and business conditions, and applicable legal requirements. All shares
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
repurchased and retired are reflected as a reduction to our basic weighted average shares outstanding based on the trade date of the share repurchase.
In the three and nine months ended March 31,September 30, 2023, we repurchased and retired 632,894290,288 and 1,116,830 shares for $44.3$28.8 million and $88.4 million, respectively. Additionally, in the first quarter of 2023, we settled the repurchase of 15,200 shares for $1.1 million which were accrued as of December 31, 2022. In the three and nine months ended March 31,September 30, 2022, we repurchased and retired 523,399685,641 and 1,706,587 shares for $23.9$45.6 million and $97.9 million, respectively, including 38,568 shares for $2.6 million which were settled in the fourth quarter of 2022. Additionally in the first quarter of 2022, we settled the repurchase of 3,820 shares for $0.2 million that were accrued as of December 31, 2021. As of March 31,September 30, 2023, $64.8$21.1 million remained available for share repurchases under our share repurchase program.
6. Financing Arrangements
The Company has a $600 million five-year senior secured revolving credit facility, subject to the terms of a Third Amended and Restated Credit Agreement dated as of November 15, 2022 (the(as amended, the "Amended Credit Agreement") that becomes due and payable in full upon maturity on November 15, 2027. The Amended Credit Agreement provides the option to increase the revolving credit facility or establish term loan facilities in an aggregate amount up to $250 million, subject to customary conditions and the approval of any lender whose commitment would be increased, resulting in a maximum available principal amount under the Amended Credit Agreement of $850 million. The initial borrowings under the Amended Credit Agreement were used to refinance borrowings outstanding under a prior credit agreement, and future borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, share repurchases, permitted acquisitions, and other general corporate purposes.
Fees and interest on borrowings vary based on our Consolidated Leverage Ratio (as defined in the Amended Credit Agreement). At our option, borrowings under the Amended Credit Agreement will bear interest at one, three or six month Term SOFR or an alternate base rate, in each case plus the applicable margin. The applicable margin will fluctuate between 1.125% per annum and 1.875% per annum, in the case of Term SOFR borrowings, or between 0.125% per annum and 0.875% per annum, in the case of base rate loans, based upon our Consolidated Leverage Ratio at such time.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
In April 2023, the Company and PNC Capital Markets, LLC, as Sustainability Structuring Agent, with the consent of the Required Lenders (as defined in the Amended Credit Agreement), amendedentered into the first amendment to the Amended Credit Agreement (the "First Amendment") to incorporate specified key performance indicators with respect to certain environmental, social and governance targets of the Company. Based upon the performance of the Company against those key performance indicators in each Reference Year (as defined in the First Amendment), certain adjustments to the otherwise applicable rates for interest, commitment fees and letter of credit fees will be made. These annual adjustments will not exceed an increase or decrease of 0.01% in the aggregate for all key performance indicators in the case of the commitment fee rate or an increase or decrease of 0.05% in the aggregate for all key performance indicators in the case of the Term SOFR borrowings, base rate borrowings or letter of credit fee rate.
Amounts borrowed under the Amended Credit Agreement may be prepaid at any time without premium or penalty. We are required to prepay the amounts outstanding under the Amended Credit Agreement in certain circumstances, including upon an Event of Default (as defined in the Amended Credit Agreement). In addition, we have the right to permanently reduce or terminate the unused portion of the commitments provided under the Amended Credit Agreement at any time.
The loans and obligations under the Amended Credit Agreement are secured pursuant to a Third Amended and Restated Security Agreement and a Third Amended and Restated Pledge Agreement (the “Pledge Agreement”) with Bank of America, N.A. as collateral agent, pursuant to which the Company and the subsidiary guarantors grant Bank of America, N.A., for the ratable benefit of the lenders under the Amended Credit Agreement, a first-priority lien, subject to permitted liens, on substantially all of the personal property assets of the Company and the subsidiary guarantors, and a pledge of 100% of the stock or other equity interests in all domestic subsidiaries and 65% of the stock or other equity interests in each “material first-tier foreign subsidiary” (as defined in the Pledge Agreement) entitled to vote and 100% of the stock or other equity interests in each material first-tier foreign subsidiary not entitled to vote.
The Amended Credit Agreement contains usual and customary representations and warranties; affirmative and negative covenants, which include limitations on liens, investments, additional indebtedness, and restricted payments; and two quarterly financial covenants as follows: (i) a maximum Consolidated Leverage Ratio (defined as the ratio of debt to consolidated EBITDA) of 3.75 to 1.00; however the maximum permitted Consolidated Leverage Ratio will increase to 4.25 to 1.00 upon the occurrence of a Qualified Acquisition (as defined in the Amended Credit Agreement), and (ii) a minimum Consolidated Interest Coverage Ratio (defined as the ratio of consolidated EBITDA to interest) of 3.00 to 1.00. Consolidated EBITDA for purposes of the financial covenants is calculated on a continuing operations basis and
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
includes adjustments to add back non-cash goodwill impairment charges, share-based compensation costs, certain non-cash restructuring charges, pro forma historical EBITDA for businesses acquired, and other specified items in accordance with the Amended Credit Agreement. For purposes of the Consolidated Leverage Ratio total debt is on a gross basis and is not netted against our cash balances. At March 31,September 30, 2023, we were in compliance with these financial covenants with a Consolidated Leverage Ratio of 2.751.82 to 1.00 and a Consolidated Interest Coverage Ratio of 12.6310.86 to 1.00.
Borrowings outstanding under the Amended Credit Agreement at March 31,September 30, 2023 totaled $447.0$358.0 million and are classified as long-term debt in our consolidated balance sheet. These borrowings carried a weighted average interest rate of 4.8%4.4%, including the effect of the interest rate swaps described in Note 8 “Derivative Instruments and Hedging Activity.” Borrowings outstanding under the Amended Credit Agreement at December 31, 2022 were $290.0 million and carried a weighted average interest rate of 3.8%, including the effect of the interest rate swaps in effect at that time. The borrowing capacity under the revolving credit facility is reduced by any outstanding borrowings under the revolving credit facility and outstanding letters of credit. At March 31,September 30, 2023, we had outstanding letters of credit totaling $0.6 million, which are used as security deposits for our office facilities. As of March 31,September 30, 2023, the unused borrowing capacity under the revolving credit facility was $152.4$241.4 million.
7. Restructuring Charges
Restructuring charges for the three months ended March 31,September 30, 2023 and 2022 were $2.3 million and $1.6 million, respectively.$5.4 million. In the firstthird quarter of 2023, we exited our office space in Hillsboro, OregonLexington, Massachusetts which resulted in a $1.9$3.5 million non-cash impairment charge on the related fixed assets and right-of-useright of use operating lease asset and fixed assets of that office space. Additionally, in the firstthird quarter of 2023, we recognized $0.4$1.2 million of additional restructuring expense foremployee-related expenses and $0.7 million of rent and related expenses, net of sublease income, for previously vacated office spaces. The $1.6
Restructuring charges for the nine months ended September 30, 2023 were $9.4 million. In the first nine months of 2023, we exited our office spaces in Hillsboro, Oregon and Lexington, Massachusetts, resulting in non-cash impairment charges of $1.9 million of restructuring charges incurredand $3.5 million, respectively, related to the right-of-use operating lease assets and fixed assets. Additionally, in the first threenine months of 2022 included $0.62023, we recognized $2.2 million of employee-related expenses; $1.3 million for rent and related expenses, net of sublease income, for previously vacated office spaces,spaces; $0.3 million related to the abandonment of a capitalized software development project; and $0.2 million related to non-cash lease impairment charges driven by updated sublease assumptions for previously vacated office spaces.
Restructuring charges for the three and nine months ended September 30, 2022 were $1.3 million and $5.0 million, respectively. The $1.3 million of restructuring charges recognized in the third quarter of 2022 included $0.7 million of rent and related expenses, net of sublease income, for previously vacated office spaces; $0.5 million for the early termination of a contract; and $0.1 million of employee-related expenses. The $5.0 million of restructuring charges incurred in the first nine months of 2022 included $1.7 million of employee-related expenses; $1.7 million of rent and related expenses, net of sublease income, for previously vacated office spaces; $0.6 million for third-party transaction expenses related to the modification of our operating model; $0.5 million for the early termination of a contract; $0.3 million of accelerated amortization of capitalized software implementation costs for a cloud-computing arrangement that is no longer in use,use; and $0.1 million for third-party transaction expenses related to the modificationdivestiture of our operating model.Life Sciences business in the fourth quarter of 2021.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
The table below sets forth the changes in the carrying amountvalue of our restructuring charge liability by restructuring type for the threenine months ended March 31,September 30, 2023.
Employee CostsOtherTotal
Balance as of December 31, 2022$3,751 $568 $4,319 
Payments(2,966)(33)(2,999)
Balance as of March 31, 2023$785 $535 $1,320 
Employee CostsOtherTotal
Balance as of December 31, 2022$3,751 $568 $4,319 
Additions2,185 — 2,185 
Payments(4,289)(74)(4,363)
Adjustments
— 41 41 
Balance as of September 30, 2023$1,647 $535 $2,182 
All of the $0.8$1.6 million restructuring charge liability related to employee costs at March 31,September 30, 2023 is expected to be paid in the next 12 months and is included as a component of accrued payroll and related benefits in our consolidated balance sheet. All of the $0.5 million other restructuring charge liability at March 31,September 30, 2023, which relates to the early termination of a contract in 2022, is expected to be paid in the next 12 months and is included as a component of accrued expenses and other current liabilities in our consolidated balance sheet.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
8. Derivative Instruments and Hedging Activity
In the normal course of business, we use forward interest rate swaps to manage the interest rate risk associated with our variable-rate borrowings under our senior secured credit facility and we use non-deliverable foreign exchange forward contracts to manage the foreign currency exchange rate risk related to our Indian Rupee-denominated expenses of our operations in India. From time to time, we may enter into additional forward interest rate swaps or non-deliverable foreign exchange forward contracts to further hedge against our interest rate risk and foreign currency exchange rate risk. We do not use derivative instruments for trading or other speculative purposes.
We have designated all of our derivative instruments as cash flow hedges. Therefore, changes in the fair value of the interest rate swaps and foreign exchange forward contracts are recorded to other comprehensive income (“OCI”) to the extent effective and reclassified to earnings upon settlement.
Interest Rate Swaps
We are party to forward interest rate swap agreements with aggregate notional amounts of $250.0 million and $200.0 million as of March 31,September 30, 2023 and December 31, 2022, respectively. Under the terms of the interest rate swap agreements, we receive from the counterparty interest on the notional amount based on one month Term SOFR and we pay to the counterparty a stated, fixed rate. The forward interest rate swap agreements have staggered maturities through February 29, 2028.
As of March 31,September 30, 2023, it was anticipated that $5.1$6.4 million of the gains, net of tax, related to interest rate swaps currently recorded in accumulated other comprehensive income will be reclassified into interest expense, net of interest income in our consolidated statement of operations within the next 12 months.
Foreign Exchange Forward Contracts
We are party to non-deliverable foreign exchange forward contracts that are scheduled to mature monthly through December 29, 2023.August 31, 2024. As of March 31,September 30, 2023 and December 31, 2022, the aggregate notional amounts of these contracts were INR 789.61,371.2 million, or $9.6$16.5 million, and INR 657.9 million, or $8.0 million, respectively, based on the exchange rates in effect as of each period end.
As of March 31,September 30, 2023, it was anticipated that less thanall of the $0.1 million of the gains,losses, net of tax, related to foreign exchange forward contracts currently recorded in accumulated other comprehensive income will be reclassified into direct costs in our consolidated statement of operations within the next 12 months.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
The table below sets forth additional information relating to our derivative instruments as of March 31,September 30, 2023 and December 31, 2022.
Derivative InstrumentDerivative InstrumentBalance Sheet LocationMarch 31,
2023
December 31,
2022
Derivative InstrumentBalance Sheet LocationSeptember 30,
2023
December 31,
2022
Interest rate swapsInterest rate swapsPrepaid expenses and other current assets$6,628 $7,108 Interest rate swapsPrepaid expenses and other current assets$8,218 $7,108 
Interest rate swapsInterest rate swapsOther non-current assets3,220 5,131 Interest rate swapsOther non-current assets3,748 5,131 
Foreign exchange forward contractsForeign exchange forward contractsPrepaid expenses and other current assets65 — Foreign exchange forward contractsPrepaid expenses and other current assets16 — 
Total AssetsTotal Assets$9,913 $12,239 Total Assets$11,982 $12,239 
Interest rate swapsDeferred compensation and other liabilities$948 $— 
Foreign exchange forward contractsForeign exchange forward contractsAccrued expenses and other current liabilities19 120 Foreign exchange forward contractsAccrued expenses and other current liabilities180 120 
Total LiabilitiesTotal Liabilities$967 $120 Total Liabilities$180 $120 
All of our derivative instruments are transacted under the International Swaps and Derivatives Association (ISDA) master agreements. These agreements permit the net settlement of amounts owed in the event of default and certain other termination events. Although netting is permitted, it is our policy to record all derivative assets and liabilities on a gross basis in our consolidated balance sheet. Refer to Note 10 “Other Comprehensive Income (Loss)” for additional information on our derivative instruments.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
9. Fair Value of Financial Instruments
Certain of our assets and liabilities are measured at fair value. Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a fair value hierarchy for inputs used in measuring fair value and requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy consists of three levels based on the objectivity of the inputs as follows:
Level 1 InputsQuoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 InputsQuoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 InputsUnobservable inputs for the asset or liability, and include situations in which there is little, if any, market activity for the asset or liability.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
The table below sets forth our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of March 31,September 30, 2023 and December 31, 2022.
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
March 31, 2023
September 30, 2023September 30, 2023
Assets:Assets:Assets:
Interest rate swapsInterest rate swaps$— $9,482 $— $9,482 Interest rate swaps$— $11,966 $— $11,966 
Convertible debt investmentConvertible debt investment— — 62,842 62,842 Convertible debt investment— — 61,756 61,756 
Foreign exchange forward contractsForeign exchange forward contracts— 65 — 65 Foreign exchange forward contracts— 16 — 16 
Deferred compensation assetsDeferred compensation assets— 33,489 — 33,489 Deferred compensation assets— 31,311 — 31,311 
Total assetsTotal assets$— $43,036 $62,842 $105,878 Total assets$— $43,293 $61,756 $105,049 
Liabilities:Liabilities:Liabilities:
Interest rate swaps$— $582 $— $582 
Foreign exchange forward contractsForeign exchange forward contracts— 19 — 19 Foreign exchange forward contracts$— $180 $— $180 
Contingent consideration for business acquisitionsContingent consideration for business acquisitions— — 3,625 3,625 Contingent consideration for business acquisitions— — 2,313 2,313 
Total liabilitiesTotal liabilities$— $601 $3,625 $4,226 Total liabilities$— $180 $2,313 $2,493 
December 31, 2022December 31, 2022December 31, 2022
Assets:Assets:Assets:
Interest rate swapsInterest rate swaps$— $12,239 $— $12,239 Interest rate swaps$— $12,239 $— $12,239 
Convertible debt investmentConvertible debt investment— — 57,563 57,563 Convertible debt investment— — 57,563 57,563 
Deferred compensation assetsDeferred compensation assets— 29,875 — 29,875 Deferred compensation assets— 29,875 — 29,875 
Total assetsTotal assets$— $42,114 $57,563 $99,677 Total assets$— $42,114 $57,563 $99,677 
Liabilities:Liabilities:Liabilities:
Foreign exchange forward contractsForeign exchange forward contracts$— $120 $— $120 Foreign exchange forward contracts$— $120 $— $120 
Contingent consideration for business acquisitionsContingent consideration for business acquisitions— — 3,190 3,190 Contingent consideration for business acquisitions— — 3,190 3,190 
Total liabilitiesTotal liabilities$— $120 $3,190 $3,310 Total liabilities$— $120 $3,190 $3,310 
Interest rate swaps: The fair values of our interest rate swaps were derived using estimates to settle the interest rate swap agreements, which are based on the net present value of expected future cash flows on each leg of the swaps utilizing market-based inputs and a discount rate reflecting the risks involved. Refer to Note 8 “Derivative Instruments and Hedging Activity” for additional information on our interest rate swaps.
Foreign exchange forward contracts: The fair values of our foreign exchange forward contracts were derived using estimates to settle the foreign exchange forward contracts agreements, which are based on the net present value of expected future cash flows on each contract
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
utilizing market-based inputs, including both forward and spot prices, and a discount rate reflecting the risks involved. Refer to Note 8 “Derivative Instruments and Hedging Activity” for additional information on our foreign exchange forward contracts.
Deferred compensation assets: We have a non-qualified deferred compensation plan (the “Plan”) for the members of our board of directors and a select group of our employees. The deferred compensation liability is funded by the Plan assets, which consist of life insurance policies maintained within a trust. The cash surrender value of the life insurance policies approximates fair value and is based on third-party broker statements which provide the fair value of the life insurance policies' underlying investments, which are Level 2 inputs. The cash surrender value of the life insurance policies is invested primarily in mutual funds. The Plan assets are included in other non-current assets in our consolidated balance sheets. Realized and unrealized gains (losses) from the deferred compensation assets are recorded to other income (expense), net in our consolidated statements of operations.
Convertible debt investment: Since 2014, we have invested $40.9 million in the form of 1.69% convertible debt in Shorelight Holdings, LLC (“Shorelight”), the parent company of Shorelight, a U.S.-based company that partners with leading nonprofit universities to increase access to and retention of international students, boost institutional growth, and enhance an institution’s global footprint. The convertible notes will mature on January 17, 2027, unless converted earlier.
To determine the appropriate accounting treatment for our investment, we performed a variable interest entity (“VIE”) analysis and concluded that Shorelight does not meet the definition of a VIE. We also reviewed the characteristics of our investment to confirm that the convertible
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
notes are not in-substance common stock that would warrant equity method accounting. After we reviewed all of the terms of the investment, we concluded the appropriate accounting treatment to be that of an available-for-sale debt security. We continue to monitor the key factors of our VIE analysis and the terms of the convertible notes to ensure our accounting treatment is appropriate. We have not identified any changes to Shorelight or our investment that would change our classification of the investment as an available-for-sale debt security.
The investment is carried at fair value with unrealized holding gains and losses excluded from earnings and reported in other comprehensive income. The carrying value is recorded in long-term investments in our consolidated balance sheets. We estimate the fair value of our investment using a scenario-based approach in the form of a hybrid analysis that consists of a Monte Carlo simulation model and an expected return analysis. The conclusion of value for our investment is based on the probability-weighted assessment of both scenarios. The hybrid analysis utilizes certain assumptions including the assumed holding period through the maturity date of January 17, 2027; the applicable waterfall distribution at the end of the expected holding period based on the rights and privileges of the various instruments; cash flow projections discounted at the risk-adjusted rate of 23.5%24.5% and 24.0% as of March 31,September 30, 2023 and December 31, 2022, respectively; and the concluded equity volatility of 35.0% and 40.0% as of March 31,September 30, 2023 and December 31, 2022, respectively, all of which are Level 3 inputs. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of the investment, which would result in different impacts to our consolidated balance sheet and comprehensive income. Actual results may differ from our estimates. The fair value of the convertible debt investment is recorded in long-term investments in our consolidated balance sheets.
The table below sets forth the changes in the balance of the convertible debt investment for the threenine months ended March 31,September 30, 2023.
Convertible Debt Investment
Balance as of December 31, 2022$57,563 
Change in fair value5,2794,193 
Balance as of March 31,September 30, 2023$62,84261,756 
Contingent consideration for business acquisitions: We estimate the fair value of acquisition-related contingent consideration using either a probability-weighted assessment of the specific financial performance targets being measured or a Monte Carlo simulation model, as appropriate. These fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 inputs. The significant unobservable inputs used in the fair value measurements of our contingent consideration are our measures of the estimated payouts based on internally generated financial projections on a probability-weighted basis and a discount rate which was 5.9%6.2% as of March 31,September 30, 2023 and 5.5% as of December 31, 2022. The fair value of the contingent consideration is reassessed quarterly based on assumptions used in our latest projections and input provided by practice leaders and management. Any change in the fair value estimate is recorded in our consolidated statement of operations for that period. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of our contingent consideration liability, which would result in different impacts to our consolidated balance sheets and consolidated statements of operations. Actual results may differ from our estimates.
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HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
The table below sets forth the changes in the balance of the contingent consideration for business acquisitions for the threenine months ended March 31,September 30, 2023.
Contingent Consideration for Business Acquisitions
Balance as of December 31, 2022$3,190 
Acquisition374 
Payment(1,000)
Change in fair value435 (251)
Balance as of March 31,September 30, 2023$3,6252,313 
Financial assets and liabilities not recorded at fair value on a recurring basis are as follows:
Medically Home Preferred Stock Investment
In the fourth quarter of 2019, we invested $5.0 million in Medically Home Group, Inc. (“Medically Home”), a hospital-at-home company. The investment was made in the form of preferred stock. To determine the appropriate accounting treatment for our preferred stock investment, we performed a VIE analysis and concluded that Medically Home does not meet the definition of a VIE. We also reviewed the characteristics of our investment to confirm that the preferred stock is not in-substance common stock that would warrant equity method accounting. After we reviewed all of the terms of the investment, we concluded the appropriate accounting treatment for our investment in Medically Home to be that of an equity security with no readily determinable fair value. We elected to apply the measurement alternative at the time of the purchase and will continue to do so until the investment does not qualify to be so measured. Under the measurement alternative, the investment is carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in Medically Home. On a quarterly basis, we review the information available to determine whether an
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
orderly and observable transaction for the same or similar equity instrument occurred, and remeasure to the fair value of the preferred stock using such identified transactions, with changes in the fair value recorded to other income (expense), net in our consolidated statement of operations. The carrying value of the preferred stock investment is recorded in long-term investments in our consolidated balance sheets.
During the first quarter of 2022, we recognized a pre-tax unrealized gain of $27.0 million based on an observable price change of preferred stock issued by Medically Home with similar rights and preferences to our preferred stock investment, a Level 2 input. There were no observable price changes for the remainder of 2022 or in the first quarternine months of 2023. Since our initial investment, we have recognized cumulative pre-tax unrealized gains of $28.6 million, which were recorded to other income (expense), net in our consolidated statement of operations, and we have not identified any impairments of our investment. As of March 31,September 30, 2023 and December 31, 2022, the carrying amountvalue of our preferred stock investment was $33.6 million.
Senior Secured Credit Facility
The carrying value of our borrowings outstanding under our senior secured credit facility is stated at cost. Our carrying value approximates fair value, using Level 2 inputs, as the senior secured credit facility bears interest at variable rates based on current market rates as set forth in the Amended Credit Agreement. Refer to Note 6 “Financing Arrangements” for additional information on our senior secured credit facility.
Cash and Cash Equivalents and Other Financial Instruments
Cash and cash equivalents are stated at cost, which approximates fair market value. The carrying values of all other financial instruments not described above reasonably approximate fair market value due to the nature of the financial instruments and the short-term maturity of these items.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
10. Other Comprehensive Income (Loss)
The table below sets forth the components of other comprehensive income (loss), net of tax, for the three and nine months ended March 31,September 30, 2023 and 2022.
Three Months Ended
March 31, 2023
Three Months Ended
March 31, 2022
Before
Taxes
Tax
(Expense)
Benefit
Net of
Taxes
Before
Taxes
Tax
(Expense)
Benefit
Net of
Taxes
Foreign currency translation adjustments$52 $— $52 $(43)$— $(43)
Unrealized gain (loss) on investment$5,279 $(1,406)$3,873 $(3,617)$956 $(2,661)
Interest rate swaps:
Change in fair value$(1,807)$481 $(1,326)$5,668 $(1,499)$4,169 
Reclassification adjustments into earnings(1,532)407 (1,125)212 (56)156 
Net unrealized gain (loss) on interest rate swaps$(3,339)$888 $(2,451)$5,880 $(1,555)$4,325 
Foreign exchange forward contracts:
Change in fair value$154 $(41)$113 $— $— $— 
Reclassification adjustments into earnings12 (3)— — — 
Net unrealized gain on foreign exchange forward contracts$166 $(44)$122 $— $— $— 
Other comprehensive income (loss)$2,158 $(562)$1,596 $2,220 $(599)$1,621 
Three Months Ended
September 30, 2023
Three Months Ended
September 30, 2022
Before
Taxes
Tax
(Expense)
Benefit
Net of
Taxes
Before
Taxes
Tax
(Expense)
Benefit
Net of
Taxes
Foreign currency translation adjustments$(662)$— $(662)$(1,034)$— $(1,034)
Unrealized gain (loss) on investment$(1,840)$490 $(1,350)$(1,128)$298 $(830)
Interest rate swaps:
Change in fair value$1,849 $(492)$1,357 $5,302 $(1,402)$3,900 
Reclassification adjustments into earnings(2,107)560 (1,547)(89)24 (65)
Net unrealized gain (loss) on interest rate swaps$(258)$68 $(190)$5,213 $(1,378)$3,835 
Foreign exchange forward contracts:
Change in fair value$(223)$59 $(164)$(98)$26 $(72)
Reclassification adjustments into earnings(19)(14)(1)— (1)
Net unrealized gain (loss) on foreign exchange forward contracts$(242)$64 $(178)$(99)$26 $(73)
Other comprehensive income (loss)$(3,002)$622 $(2,380)$2,952 $(1,054)$1,898 
Nine Months Ended
September 30, 2023
Nine Months Ended
September 30, 2022
Before
Taxes
Tax
(Expense)
Benefit
Net of
Taxes
Before
Taxes
Tax
(Expense)
Benefit
Net of
Taxes
Foreign currency translation adjustments$(283)$— $(283)$(1,733)$— $(1,733)
Unrealized gain (loss) on investment$4,193 $(1,117)$3,076 $(3,694)$976 $(2,718)
Interest rate swaps:
Change in fair value$5,307 $(1,411)$3,896 $11,994 $(3,172)$8,822 
Reclassification adjustments into earnings(5,580)1,483 (4,097)420 (111)309 
Net unrealized gain (loss) on interest rate swaps$(273)$72 $(201)$12,414 $(3,283)$9,131 
Foreign exchange forward contracts:
Change in fair value$(23)$$(17)$(98)$26 $(72)
Reclassification adjustments into earnings(21)(16)(1)— (1)
Net unrealized gain (loss) on foreign exchange forward contracts$(44)$11 $(33)$(99)$26 $(73)
Other comprehensive income (loss)$3,593 $(1,034)$2,559 $6,888 $(2,281)$4,607 
The before tax amounts reclassified from accumulated other comprehensive income related to our interest rate swaps and foreign exchange forward contracts are recorded to interest expense, net of interest income and direct costs, respectively. Refer to Note 8 “Derivative Instruments and Hedging Activity” for additional information on our derivative instruments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
Accumulated other comprehensive income, net of tax, includes the following components: 
Cash Flow HedgesCash Flow Hedges
Foreign Currency TranslationAvailable-for-Sale InvestmentInterest Rate SwapsForeign Exchange Forward ContractsTotalForeign Currency TranslationAvailable-for-Sale InvestmentInterest Rate SwapsForeign Exchange Forward ContractsTotal
Balance as of December 31, 2022Balance as of December 31, 2022$(3,033)$12,228 $9,012 $(88)$18,119 Balance as of December 31, 2022$(3,033)$12,228 $9,012 $(88)$18,119 
Current period changeCurrent period change52 3,873 (2,451)122 1,596 Current period change(283)3,076 (201)(33)2,559 
Balance as of March 31, 2023$(2,981)$16,101 $6,561 $34 $19,715 
Balance as of September 30, 2023Balance as of September 30, 2023$(3,316)$15,304 $8,811 $(121)$20,678 
11. Income Taxes
For the three months ended March 31,September 30, 2023, our effective tax rate was 15.3%31.2% as we recognized income tax expense of $2.4$9.8 million on income of $15.8$31.3 million. The effective tax rate of 15.3% was more favorable than the statutory rate, inclusive of state income taxes, of 26.6%, primarily due to a discrete tax benefit for share-based compensation awards that vested during the quarter and a tax benefit related to non-taxable gains on our investments used to fund our deferred compensation liability. These favorable items were partially offset by certain nondeductible expense items.
For the three months ended March 31, 2022, our effective tax rate was 29.6% as we recognized income tax expense of $11.3 million on income of $38.1 million. The effective tax rate of 29.6%31.2% was less favorable than the statutory rate, inclusive of state income taxes, of 26.6% primarily due to tax expense related to nondeductible losses on our investments used to fund our deferred compensation liability and certain nondeductible expense items.
For the three months ended September 30, 2022, our effective tax rate was 30.2% as we recognized income tax expense of $7.7 million on income of $25.4 million. The effective tax rate of 30.2% was less favorable than the statutory rate, inclusive of state income taxes, of 26.4%, primarily due to tax expense related to nondeductible losses on our investments used to fund our deferred compensation liability and certain nondeductible expense items.
For the nine months ended September 30, 2023, our effective tax rate was 27.4% as we recognized income tax expense of $22.5 million on income of $82.1 million. The effective tax rate of 27.4% was less favorable than the statutory rate, inclusive of state income taxes, of 26.6% primarily due to certain nondeductible expense items. These unfavorable items were partially offset by a discrete tax benefit for share-based compensation awards that vested during the year.
For the nine months ended September 30, 2022, our effective tax rate was 31.4% as we recognized income tax expense of $26.7 million on income of $85.2 million. The effective tax rate of 31.4% was less favorable than the statutory rate, inclusive of state income taxes, of 26.4% primarily due to tax expense related to nondeductible losses on our investments used to fund our deferred compensation liability and certain nondeductible expense items.
As of March 31,September 30, 2023, we had $0.6 million of unrecognized tax benefits which would affect the effective tax rate if recognized. It is reasonably possible that approximately $0.6 million of the liability for unrecognized tax benefits could decrease in the next twelve months due to the expiration of statutes of limitations.
12. Commitments, Contingencies and Guarantees
Litigation
From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business. As of the date of this Quarterly Report on Form 10-Q, we are not a party to any litigation or legal proceeding or subject to any claim that, in the current opinion of management, could reasonably be expected to have a material adverse effect on our financial position or results of operations. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results.
Guarantees
Guarantees in the form of letters of credit totaling $0.6 million and $0.7 million were outstanding as of March 31,at September 30, 2023 and December 31, 2022, respectively, to support certain office lease obligations.
In connection with certain business acquisitions, we may be required to pay post-closing consideration to the sellers if specific financial performance targets are met over a number of years as specified in the related purchase agreements. As of March 31,September 30, 2023 and December 31, 2022, the total estimated fair value of our outstanding contingent consideration liability was $3.6$2.3 million and $3.2 million, respectively.
To the extent permitted by law, our bylaws and articles of incorporation require that we indemnify our officers and directors against judgments, fines and amounts paid in settlement, including attorneys’ fees, incurred in connection with civil or criminal action or proceedings,
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
as it relates to their services to us if such person acted in good faith. Although there is no limit on the amount of indemnification, we may have recourse against our insurance carrier for certain payments made.
13. Segment Information
Segments are defined as components of a company that engage in business activities from which they may earn revenues and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. Our chief operating decision maker, who is our
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
chief executive officer, manages the business under three operating segments, which are our reportable segments: Healthcare, Education, and Commercial.
Healthcare
Our Healthcare segment serves acute care providers, including national and regional health systems; academic health systems; community health systems; and public, children’s and critical access hospitals, and non-acute care providers, including physician practices and medical groups; payors; and long-term care or post-acute providers. Our Healthcare professionals have a depth of expertise in business operations, including financial and operational improvement, care transformation, and revenue cycle managed services; digital solutions, spanning technology and analytic-related services and a portfolio of software products; organizational transformation; financial advisory and strategy and innovation. Healthcare organizations are focused on establishing a sustainable long-term strategy and business model centered around growth, optimal cost structures, reimbursement models, financial strategies, and consumer-focused digital transformation; changing the way care is delivered, particularly in light of personnel shortages, and improving access to care; and evolving their digital capabilities to more effectively manage their business. Our solutions help clients adapt to this rapidly changing healthcare environment to become a more agile, efficient and consumer-centric organization. We use our deep industry, functional and technical expertise to help clients solve a diverse set of business issues, including, but not limited to, identifying new opportunities for growth, optimizing financial and operational performance, improving care delivery and clinical outcomes, increasing physician, patient and employee satisfaction, and maximizing return on technology investments.
Education
Our Education segment serves public and private colleges and universities, research institutes and other education-related organizations. Our Education professionals have a depth of expertise in strategy and innovation; business operations, including the research enterprise and student and alumni lifecycle; digital solutions, spanning technology and analytic-related services and Huron Research Suite, the leading software suite designed to facilitate and improve research administration service delivery and compliance; and organizational transformation. Our Education segment clients are increasingly faced with strategic, financial and/or enrollment challenges, increased competition, and a need to modernize their businesses using technology to advance their missions. We combine our deep industry, functional and technical expertise to help clients solve their most pressing challenges, including, but not limited to, transforming business operations with technology and analytics; strengthening research strategies and support services; evolving their organizational strategy; optimizing financial and operational performance; applying innovative enrollment strategies; and enhancing the student lifecycle.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
Commercial
Our Commercial segment is focused on serving industries and organizations facing significant disruption and regulatory change by helping them adapt to rapidly changing environments and accelerate business transformation. Our Commercial professionals work primarily with six primary buyers: the chief executive officer, the chief financial officer, the chief strategy officer, the chief human resources officer, the chief operating officer, and organizational advisors, including lenders and law firms. We have a deep focus on serving organizations in the financial services, energy and utilities, industrials and manufacturing industries and the public sector while opportunistically serving commercial industries more broadly, including professional and business services, life sciences, consumer products, and nonprofit. Our Commercial professionals use their deep industry, functional and technical expertise to deliver our digital services and software products, strategy and innovation, and financial advisory (special situation advisory and corporate finance advisory) services. In today’s disruptive environment, organizations must reimagine their historical strategies and financial and operating models to sustain and advance their competitive advantage. Our experts help organizations across industries with a variety of business challenges, including, but not limited to, embedding technology and analytics throughout their internal and customer-facing operations; developing analytics and insights to identify the needs of tomorrow’s customers, evolving their strategies, and bringing new products to market; managing through stressed and distressed situations to create a viable path forward for stakeholders; and providing financial, risk and regulatory advisory offerings.
Segment operating income consists of the revenues generated by a segment, less operating expenses that are incurred directly by the segment. Unallocated costs include corporate costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. These administrative function costs include corporate office support costs, office facility costs, costs related to accounting and finance, human resources, legal, marketing, information technology, and company-wide business development functions, as well as costs related to overall corporate management. Our chief operating decision maker does not evaluate segments using asset information.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
The table below sets forth information about our operating segments for the three and nine months ended March 31,September 30, 2023 and 2022, along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements.
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
202320222023202220232022
Healthcare:Healthcare:Healthcare:
RevenuesRevenues$149,049 $121,876 Revenues$179,177 $131,319 $501,994 $381,669 
Operating incomeOperating income$32,255 $28,032 Operating income$46,888 $33,045 $128,294 $91,441 
Segment operating income as a percentage of segment revenuesSegment operating income as a percentage of segment revenues21.6 %23.0 %Segment operating income as a percentage of segment revenues26.2 %25.2 %25.6 %24.0 %
Education:Education:Education:
RevenuesRevenues$104,147 $80,662 Revenues$111,043 $94,347 $325,884 $263,234 
Operating incomeOperating income$23,165 $14,306 Operating income$26,550 $22,851 $77,112 $58,848 
Segment operating income as a percentage of segment revenuesSegment operating income as a percentage of segment revenues22.2 %17.7 %Segment operating income as a percentage of segment revenues23.9 %24.2 %23.7 %22.4 %
Commercial:Commercial:Commercial:
RevenuesRevenues$64,699 $57,511 Revenues$67,958 $59,704 $194,954 $173,841 
Operating incomeOperating income$14,067 $12,214 Operating income$15,432 $14,153 $39,971 $38,282 
Segment operating income as a percentage of segment revenuesSegment operating income as a percentage of segment revenues21.7 %21.2 %Segment operating income as a percentage of segment revenues22.7 %23.7 %20.5 %22.0 %
Total Huron:Total Huron:Total Huron:
RevenuesRevenues$317,895 $260,049 Revenues$358,178 $285,370 $1,022,832 $818,744 
Reimbursable expensesReimbursable expenses8,490 4,726 Reimbursable expenses9,288 6,816 25,918 19,034 
Total revenues and reimbursable expensesTotal revenues and reimbursable expenses$326,385 $264,775 Total revenues and reimbursable expenses$367,466 $292,186 $1,048,750 $837,778 
Segment operating incomeSegment operating income$69,487 $54,552 Segment operating income$88,870 $70,049 $245,377 $188,571 
Items not allocated at the segment level:Items not allocated at the segment level:Items not allocated at the segment level:
Other operating expensesOther operating expenses46,340 33,548 Other operating expenses43,086 34,875 129,563 96,376 
Restructuring chargesRestructuring charges4,095 804 6,881 2,763 
Depreciation and amortizationDepreciation and amortization4,716 5,046 Depreciation and amortization4,347 5,071 13,441 15,171 
Operating incomeOperating income18,431 15,958 Operating income37,342 29,299 95,492 74,261 
Total other income (expense), netTotal other income (expense), net(2,584)22,169 Total other income (expense), net(6,047)(3,896)(13,365)10,946 
Income before taxesIncome before taxes$15,847 $38,127 Income before taxes$31,295 $25,403 $82,127 $85,207 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
The following table illustrates the disaggregation of revenues by our two principal capabilities: i) Consulting and Managed Services and ii) Digital, and includes a reconciliation of the disaggregated revenues to revenues from our three operating segments for the three and nine months ended March 31,September 30, 2023 and 2022.
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
Revenues by CapabilityRevenues by Capability20232022Revenues by Capability2023202220232022
Healthcare:Healthcare:Healthcare:
Consulting and Managed ServicesConsulting and Managed Services$101,736 $83,759 Consulting and Managed Services$130,548 $88,626 $357,228 $256,340 
DigitalDigital47,313 38,117 Digital48,629 42,693 144,766 125,329 
Total revenuesTotal revenues$149,049 $121,876 Total revenues$179,177 $131,319 $501,994 $381,669 
Education:Education:Education:
Consulting and Managed ServicesConsulting and Managed Services$53,227 $44,181 Consulting and Managed Services$55,837 $49,363 $162,490 $142,823 
DigitalDigital50,920 36,481 Digital55,206 44,984 163,394 120,411 
Total revenuesTotal revenues$104,147 $80,662 Total revenues$111,043 $94,347 $325,884 $263,234 
Commercial:Commercial:Commercial:
Consulting and Managed ServicesConsulting and Managed Services$22,231 $22,644 Consulting and Managed Services$28,303 $17,912 $69,419 $55,193 
DigitalDigital42,468 34,867 Digital39,655 41,792 125,535 118,648 
Total revenuesTotal revenues$64,699 $57,511 Total revenues$67,958 $59,704 $194,954 $173,841 
Total Huron:Total Huron:Total Huron:
Consulting and Managed ServicesConsulting and Managed Services$177,194 $150,584 Consulting and Managed Services$214,688 $155,901 $589,137 $454,356 
DigitalDigital140,701 109,465 Digital143,490 129,469 433,695 364,388 
Total revenuesTotal revenues$317,895 $260,049 Total revenues$358,178 $285,370 $1,022,832 $818,744 
For the three and nine months ended March 31,September 30, 2023 and 2022, substantially all of our revenues were recognized over time. At March 31,September 30, 2023 and December 31, 2022, no single client accounted for greater than 10% of our combined balance of receivables from clients, net and unbilled services, net. During the three and nine months ended March 31,September 30, 2023 and 2022, no single client generated greater than 10% of our consolidated revenues.
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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms “Huron,” “Company,” “we,” “us” and “our” refer to Huron Consulting Group Inc. and its subsidiaries.
Statements in this Quarterly Report on Form 10-Q 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 (the “Exchange Act”) 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 our current expectations about our 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 our Annual Report on Form 10-K for the year ended December 31, 2022 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. We disclaim any obligation to update or revise any forward-looking statements as a result of new information or future events, or for any other reason.
OVERVIEW
Our Business    
Huron is a global professional services firm that partners with clients to develop growth strategies, optimize operations and accelerate digital transformation using an enterprise portfolio of technology, data and analytics solutions to empower clients to own their future. By collaborating with clients, embracing diverse perspectives, encouraging new ideas and challenging the status quo, we create sustainable results for the organizations we serve.
We provide our services and products and manage our business under three operating segments: Healthcare, Education, and Commercial. We also provide revenue reporting across two principal capabilities: i) Consulting and Managed Services and ii) Digital.
Capabilities
Within each of our reportable segments, we provide services under two principal capabilities: i) Consulting and Managed Services and ii) Digital.
Consulting and Managed Services
Our Consulting and Managed Services capabilities represent our management consulting services, managed services (excluding technology-related managed services) and outsourcing services delivered across industries. Our Consulting and Managed Services experts help our clients address a variety of strategic, operational, financial, people and organizational-related challenges. These services are often combined with technology, analytic and data-driven solutions powered by our Digital capability to support long-term relationships with our clients and drive lasting impact. Examples include the areas of revenue cycle management and research administration at our healthcare and education clients, where our consulting and managed services projects are often coupled with our digital services and product offerings.
Digital
Our Digital capabilities represent our technology and analytics services, including technology-related managed services, and software products delivered across industries. Our Digital experts help clients address a variety of business challenges, including, but not limited to, designing and implementing technologies to accelerate transformation, facilitate data-driven decision making and improve customer and employee experiences.
We have expanded our ecosystem to work with more than 25 technology partners. We are a Leading Modern Oracle Network Partner; a Summit-level consulting partner with Salesforce.com and a Premium Partner with Salesforce.org; a Workday Services, Preferred Channel, Extend, and Application Management Services Partner; an Amazon Web Services consulting partner; an Informatica Platinum Partner; an SAP Concur implementation partner; and a Boomi Elite Partner.
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We have also grown our proprietary software product portfolio to address our clients' challenges with solutions that expand our base of recurring revenue and further differentiate our consulting, digital and managed services offerings. Our product portfolio bundles our deep industry expertise and unique intellectual property together to serve our clients outside of our traditional consulting offerings. Our product portfolio includes, among others: Huron Research Suite, the leading software suite designed to facilitate and improve research administration service delivery and compliance; Huron Intelligence™ Rounding, the #1 ranked Digital Rounding solution in the 2023 Best in KLAS® report; and Huron Intelligence™ Analytic Suite in Healthcare, a predictive analytics suite to improve care delivery while lowering costs.
Operating Industries
We provide our services and products and manage our business under three operating industries, which are our operating segments: Healthcare, Education, and Commercial.
Healthcare
Our Healthcare segment serves acute care providers, including national and regional health systems; academic health systems; community health systems; and public, children’s and critical access hospitals, and non-acute care providers, including physician practices and medical groups; payors; and long-term care or post-acute providers. Our Healthcare professionals have a depth of expertise in business operations, including financial and operational improvement, care transformation, and revenue cycle managed services; digital solutions, spanning technology and analytic-related services and a portfolio of software products; organizational transformation; financial advisory and strategy and innovation. Healthcare organizations are focused on establishing a sustainable long-term strategy and business model centered around growth, optimal cost structures, reimbursement models, financial strategies, and consumer-focused digital transformation; changing the way care is delivered, particularly in light of personnel shortages, and improving access to care; and evolving their digital capabilities to more effectively manage their business. Our solutions help clients adapt to this rapidly changing healthcare environment to become a more agile, efficient and consumer-centric organization. We use our deep industry, functional and technical expertise to help clients solve a diverse set of business issues, including, but not limited to, identifying new opportunities for growth, optimizing financial and operational performance, improving care delivery and clinical outcomes, increasing physician, patient and employee satisfaction, and maximizing return on technology investments.
To best serve our clients, we continue to diversify our portfolio of offerings. For example, we have broadened our capabilities beyond our leading profit and loss-focused offerings (e.g., revenue cycle, cost transformation) into offerings dedicated to optimizing our clients' financial positions through financial advisory and transaction-related services; transforming care delivery models through virtual health, health equity and social determinants of health models; and evolving organizations by supporting change management and developing the next generation of leaders by applying our best practices (e.g., revenue cycle leadership).
Education
Our Education segment serves public and private colleges and universities, research institutes and other education-related organizations. Our Education professionals have a depth of expertise in strategy and innovation; business operations, including the research enterprise and student and alumni lifecycle; digital solutions, spanning technology and analytic-related services and Huron Research Suite, the leading software suite designed to facilitate and improve research administration service delivery and compliance; and organizational transformation. Our Education segment clients are increasingly faced with strategic, financial and/or enrollment challenges, increased competition, and a need to modernize their businesses using technology to advance their missions. We combine our deep industry, functional and technical expertise to help clients solve their most pressing challenges, including, but not limited to, transforming business operations with technology and analytics; strengthening research strategies and support services; evolving their organizational strategy; optimizing financial and operational performance; applying innovative enrollment strategies; and enhancing the student lifecycle. We continue to broaden our offerings into new areas; for example, research managed services, advancement, campus health and well-being, and athletics.
Commercial
Our Commercial segment is focused on serving industries and organizations facing significant disruption and regulatory change by helping them adapt to rapidly changing environments and accelerate business transformation. Our Commercial professionals work primarily with six primary buyers: the chief executive officer, the chief financial officer, the chief strategy officer, the chief human resources officer, the chief operating officer, and organizational advisors, including lenders and law firms. We have a deep focus on serving organizations in the financial services, energy and utilities, industrials and manufacturing industries and the public sector while opportunistically serving commercial industries more broadly, including professional and business services, life sciences, consumer products, and nonprofit. Our Commercial professionals use their deep industry, functional and technical expertise to deliver our digital services and software products, strategy and innovation, and financial advisory (special situation advisory and corporate finance advisory) services. In today’s disruptive environment, organizations must reimagine their historical strategies and financial and operating models to sustain and advance their competitive advantage. Our experts help organizations across industries with a variety of business challenges, including, but not limited to,
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embedding technology and analytics throughout their internal and customer-facing operations; developing analytics and insights to identify the needs of tomorrow’s customers, evolving their strategies, and bringing new products to market; managing through stressed and distressed situations to create a viable path forward for stakeholders; and providing financial, risk and regulatory advisory offerings.
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Business Strategy, Opportunities and Challenges
Our strategy is to be the premier transformation partner to our clients by helping them address a variety of strategic, operational, financial, people, and organizational challenges through an array of industry-differentiated consulting, digital and managed services offerings that meet their unique needs. To achieve our strategic and financial objectives that will drive increased shareholder value, we remain focused on:
Extending our leading market positions and accelerating growth in healthcare and education,
Growing our presence in commercial industries,
Advancing our integrated, global digital platform,
Building a more sustainable base of revenue and executing on our margin levers to drive more consistent growth and improved profitability,
Strategically deploying capital to accelerate our strategy and return capital to shareholders, and
Investing in and growing our talented team, including attracting and retaining our managing directors - the senior most practitioners that lead our revenue generation efforts.
We regularly evaluate the performance of our businesses to ensure our investments meet these objectives.
COMPONENTS OF OPERATING RESULTS
Revenues
Our revenues are primarily generated by our employees who provide consulting and other professional services to our clients and are billable to our clients based on the number of hours worked, services provided, or achieved outcomes. We refer to these employees as our revenue-generating professionals. Revenues are primarily driven by the number of revenue-generating professionals we employ as well as the total value, scope, and terms of the consulting contracts under which they provide services. We also engage independent contractors to supplement our revenue-generating professionals on client engagements as needed.
We generate our revenues from providing professional services and software products under the following four types of billing arrangements: fixed-fee (including software license revenue); time-and-expense; performance-based; and software support, maintenance and subscriptions.
Fixed-fee (including software license revenue): In fixed-fee billing arrangements, we agree to a pre-established fee in exchange for a predetermined set of professional services. We set the fees based on our estimates of the costs and timing for completing the engagements. Fixed-fee arrangements also include software licenses for our revenue cycle management software and research administration and compliance software.certain digital products.
Time-and-expense: Under time-and-expense billing arrangements, we require the client to pay based on the number of hours worked by our revenue-generating professionals at agreed upon rates. Time-and-expense arrangements also include speaking engagements, conferences and publications purchased by our clients.
Performance-based: In performance-based fee billing arrangements, fees are tied to the attainment of contractually defined objectives. We enter into performance-based engagements in essentially two forms. First, we generally earn fees that are directly related to the savings formally acknowledged by the client as a result of adopting our recommendations for improving operational and cost effectiveness in the areas we review. Second, we earn a success fee when and if certain predefined outcomes occur. Often, performance-based fees supplement our time-and-expense or fixed-fee engagements. The level of performance-based fees earned may vary based on our clients’ risk sharing preferences and the mix of services we provide.
Software support, maintenance and subscriptions: Clients that have purchased one of our software licenses can pay an annual fee for software support and maintenance. We also generate subscription revenue from ourcertain cloud-based analytic tools and solutions.digital products. Software support, maintenance and subscription revenues are recognized ratably over the support or subscription period. These fees are generally billed in advance and included in deferred revenues until recognized.
Time-and-expense engagements do not provide us with a high degree of predictability as to performance in future periods. Unexpected changes in the demand for our services can result in significant variations in utilization and revenues and present a challenge to optimal hiring and staffing. Moreover, our clients typically retain us on an engagement-by-engagement basis, rather than under long-term recurring contracts. The volume of work performed for any particular client can vary widely from period to period.
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Our quarterly results are impacted principally by the total value, scope, and terms of our client contracts, the number of our revenue-generating professionals who are available to work, our revenue-generating professionals' utilization rate, and the bill rates we charge our clients. Our utilization rate can be negatively affected by increased hiring because there is generally a transition period for new professionals that results in a temporary
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drop in our utilization rate. Our utilization rate can also be affected by seasonal variations in the demand for our services from our clients. For example, during the third and fourth quarters of the year, vacations taken by our clients can result in the deferral of activity on existing and new engagements, which would negatively affect our utilization rate. The number of business work days is also affected by the number of vacation days taken by our consultants and holidays in each quarter. We typically have fewer business work days available in the fourth quarter of the year, which can impact revenues during that period.
Reimbursable Expenses
Reimbursable expenses that are billed to clients, primarily relating to travel and out-of-pocket expenses incurred in connection with client engagements, are included in total revenues and reimbursable expenses. We manage our business on the basis of revenues before reimbursable expenses, which we believe is the most accurate reflection of our services because it eliminates the effect of reimbursable expenses that we bill to our clients at cost.
Operating Expenses
Our most significant expenses are costs classified as direct costs. Direct costs primarily consist of compensation costs for our revenue-generating professionals, which includes salaries, performance bonuses, share-based compensation, signing and retention bonuses, payroll taxes and benefits. Direct costs also include fees paid to independent contractors that we retain to supplement our revenue-generating professionals, typically on an as-needed basis for specific client engagements, and technology costs, product and event costs, and commissions. Direct costs exclude amortization of intangible assets and software development costs and reimbursable expenses, both of which are separately presented in our consolidated statements of operations.
Selling, general and administrative expenses consist primarily of compensation costs for our support personnel. Also included in selling, general and administrative expenses isare third-party professional fees, software licenses and data hosting expenses, rent and other office related expenses, sales and marketing related expenses, recruiting and training expenses, and practice administration and meetings expenses.
Other operating expenses include restructuring charges, depreciation expense, amortization expense related to internally developed software costs and amortization of intangible assets acquired in business combinations.
Segment operating income consists of the revenues generated by a segment, less operating expenses that are incurred directly by the segment. Other operating expenses not allocated at the segment level include corporate costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. These administrative function costs include corporate office support costs, office facility costs, costs related to accounting and finance, human resources, legal, marketing, information technology, and company-wide business development functions, and costs related to overall corporate management.
Non-GAAP Measures
We also assess our results of operations using the following non-GAAP financial measures: earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income, and adjusted diluted earnings per share (“EPS”). These non-GAAP financial measures differ from GAAP because they exclude a number of items required by GAAP, each discussed below. These non-GAAP financial 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 GAAP. Our non-GAAP financial measures may be defined differently from time to time and may be defined differently than similar terms used by other companies, and accordingly, care should be exercised in understanding how we define our non-GAAP financial measures.
Our management uses the non-GAAP financial measures to gain an understanding of our comparative operating performance, for example 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 our ongoing business in a manner that allows for meaningful period-to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing our business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions. We believe 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 and in comparing in a consistent manner Huron’s current financial results with Huron’s past financial results.
These non-GAAP financial measures include adjustments for the following items:
Amortization of intangible assets: We exclude the effect of amortization of intangible assets from the calculation of adjusted net income, as it is inconsistent in its amount and frequency and is significantly affected by the timing and size of our acquisitions.
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Restructuring charges: We have incurred charges due to restructuring various parts of our business. These restructuring charges have primarily consisted of costs associated with office space consolidations, including lease impairment charges and accelerated depreciation on lease-related property and equipment, and employee severance charges. We exclude the effect of the restructuring charges from our non-GAAP measures to permit comparability with periods that are not impacted by these items. We do not include normal, recurring, cash operating expenses in our restructuring charges.
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Other losses (gains): We exclude the effects of other losses (gains), which primarily relate to changes in the estimated fair value of our liabilities for contingent consideration related to business acquisitions and litigation settlement losses and gains, to permit comparability with periods that are not impacted by these items.
Transaction-related expenses: To permit comparability with prior periods, we exclude the impact of third-party advisory, legal, and accounting fees incurred related to the evaluation and/or consummation of business acquisitions.
Unrealized gain on preferred stock investment: We exclude the effect of unrealized gains related to changes in the fair value of our preferred stock investment in Medically Home Group, Inc. (“Medically Home”), which are recognized when an observable price change occurs. These unrealized gains are included as a component of other income (expense), net. We believe that these unrealized gains are not indicative of the ongoing performance of our business and their exclusion permits comparability with prior periods.
Foreign currency transaction losses (gains), net: We exclude the effect of foreign currency transaction losses and gains from the calculation of adjusted EBITDA because the amount of each loss or gain is significantly affected by changes in foreign exchange rates.
Tax effect of adjustments: The non-GAAP income tax adjustment reflects the incremental tax impact applicable to the non-GAAP adjustments.
Income tax expense, Interest expense, net of interest income, Depreciation and amortization: We exclude the effects of income tax expense, interest expense, net of interest income, and depreciation and amortization in the calculation of EBITDA, as these are customary exclusions as defined by the calculation of EBITDA to arrive at meaningful earnings from core operations excluding the effect of such items. We include, within the depreciation and amortization adjustment, the amortization of capitalized implementation costs of our enterprise resource planning ("ERP") and other related software, which is included within selling, general and administrative expenses in our consolidated statements of operations.
Revenue-Generating Professionals
Our revenue-generating professionals consist 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 Cultureculture and Organizationalorganizational 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 Servicesmanaged services employees who provide revenue cycle billing, collections insurance verification and change integrity services to clients.
Utilization Rate
The utilization rate of our revenue-generating professionals 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 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 do not present utilization rates for our Managed Services professionals as most of the revenues generated by these employees are not billed on an hourly basis.
RESULTS OF OPERATIONS
Executive Highlights
Highlights from the firstthird quarter of 2023 include:
Total revenues increased 22.2%25.5% to $317.9$358.2 million for the firstthird quarter of 2023 from $260.0$285.4 million for the firstthird quarter of 20222022.
Revenues within our Digital capabilityFor the first nine months of 2023, Healthcare segment revenues increased 28.5% in31.5% compared to the first nine months of 2022.
For the first nine months of 2023, adjusted EBITDA as a percentage of revenues increased 110 basis points to 12.3% from 11.2% for the first nine months of 2022.
Diluted EPS increased 27.9% to $1.10 for the third quarter of 2023, compared to $0.86 for the firstthird quarter of 2022
Diluted EPS was $0.68 for the first quarter of 2023; compared to $1.27 for the first quarter of 2022 which included a $19.8 million unrealized gain, net of tax, on our preferred stock investment2022.
Adjusted diluted EPS increased 77.6%37.6% to $0.87$1.39 for the firstthird quarter of 2023, compared to $0.49$1.01 for the firstthird quarter of 20222022.
Returned $44.3 million to shareholders by repurchasing 632,894 shares of our common stock in the first quarter of 2023
Total revenues increased $57.8 million, or 22.2%, to $317.9 million for the first quarter of 2023 from $260.0 million for the first quarter of 2022. The increase in revenues reflects continued strength in demand for our Digital capability services across all segments; as well as strengthened demand for our Consulting and Managed Services offerings within our Healthcare and Education segments, which reflects our focus on accelerating growth in the healthcare and education industries.
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Net cash provided by operating activities increased 54.7% to $68.8 million for the third quarter of 2023, compared to $44.5 million for the third quarter of 2022.
Returned $88.4 million to shareholders in the first nine months of 2023 by repurchasing 1,116,830 shares of our common stock.
Total revenues increased $72.8 million, or 25.5%, to $358.2 million for the third quarter of 2023 from $285.4 million for the third quarter of 2022. The increase in revenues reflects continued strength in demand for our Consulting and Managed Services capability across all segments, as well as continued strength in demand for our Digital capability services within our Education and Healthcare segments. These increases in revenue reflect our focus on accelerating growth in our healthcare and education industries and growing our presence in commercial industries. Additional information on our revenues by segment follows.
In our Consulting and Managed Services capability, revenues for the firstthird quarter of 2023 increased 17.7%37.7%, compared to the firstthird quarter of 2022, and reflected strengthened demand in our Healthcare and Education segments. The utilization rate within our Consulting capability increased to 76.3% in the first quarter of 2023, compared to 71.4% in the first quarter of 2022.
Revenues within our Digital capability increased 28.5% in the first quarter of 2023 compared to the first quarter of 2022, and reflected strength in demand in all of our segments. The utilization rate within our DigitalConsulting capability decreasedincreased to 71.0%77.3% in the firstthird quarter of 2023, compared to 72.4%72.5% in the firstthird quarter of 2022.
Revenues within our Digital capability increased 10.8% in the third quarter of 2023, compared to the third quarter of 2022, and reflected strengthened demand in our Education and Healthcare segments. The utilization rate within our Digital capability increased to 75.4% in the third quarter of 2023, compared to 70.1% in the third quarter of 2022.
The total number of revenue-generating professionals increased to 5,0135,341 as of March 31,September 30, 2023, compared to 4,0234,571 as of March 31,September 30, 2022, as a result of hiring to support the overall increase in demand for our services within all of our segments. We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our services as employee compensation costs are the most significant portion of our operating expenses.
Net income decreased $13.4increased $3.8 million to $13.4$21.5 million for the three months ended March 31,September 30, 2023 from $26.9$17.7 million for the same period last year, driven by the $19.8 million unrealized gain, net of tax, recognized in the first quarter of 2022 related to the increase in fair value of our preferred stock investment.year. As a result of the decreaseincrease in net income and a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan, diluted earnings per share for the firstthird quarter of 2023 was $0.68increased 27.9% to $1.10, compared to $1.27$0.86 for the firstthird quarter of 2022. Adjusted diluted earnings per share increased 77.6%37.6% to $0.87$1.39 for the firstthird quarter of 2023, compared to $0.49$1.01 for the firstthird quarter of 2022.
Net cash provided by operating activities increased 54.6% to $68.8 million for the third quarter of 2023, compared to $44.5 million for the third quarter of 2022. The increase in net cash provided by operating activities was primarily related to an increase in cash collections in the third quarter of 2023, compared to the third quarter of 2022; partially offset by increases in salaries and related expenses for our revenue-generating professionals and payments for selling, general and administrative expenses in the third quarter of 2023, compared to the third quarter of 2022.
DuringIn the first quarternine months of 2023, we deployed $44.3$88.4 million of capital to repurchase 632,8941,116,830 shares of our common stock, representing 3.2%5.6% of our common stock outstanding as of December 31, 2022.
Summary of Results
The following table sets forth, for the periods indicated, selected segment and consolidated operating results and other operating data, including non-GAAP measures.
Segment and Consolidated Operating Results
(in thousands, except per share amounts):
Segment and Consolidated Operating Results
(in thousands, except per share amounts):
Three Months Ended
March 31,
Segment and Consolidated Operating Results
(in thousands, except per share amounts):
Three Months Ended
September 30,
Nine Months Ended
September 30,
20232022Segment and Consolidated Operating Results
(in thousands, except per share amounts):
2023202220232022
Healthcare:Healthcare:
RevenuesRevenues$149,049 $121,876 Revenues$179,177 $131,319 $501,994 $381,669 
Operating incomeOperating income$32,255 $28,032 Operating income$46,888 $33,045 $128,294 $91,441 
Segment operating income as a percentage of segment revenuesSegment operating income as a percentage of segment revenues21.6 %23.0 %Segment operating income as a percentage of segment revenues26.2 %25.2 %25.6 %24.0 %
Education:Education:Education:
RevenuesRevenues$104,147 $80,662 Revenues$111,043 $94,347 $325,884 $263,234 
Operating incomeOperating income$23,165 $14,306 Operating income$26,550 $22,851 $77,112 $58,848 
Segment operating income as a percentage of segment revenuesSegment operating income as a percentage of segment revenues22.2 %17.7 %Segment operating income as a percentage of segment revenues23.9 %24.2 %23.7 %22.4 %
Commercial:Commercial:Commercial:
RevenuesRevenues$64,699 $57,511 Revenues$67,958 $59,704 $194,954 $173,841 
Operating incomeOperating income$14,067 $12,214 Operating income$15,432 $14,153 $39,971 $38,282 
Segment operating income as a percentage of segment revenuesSegment operating income as a percentage of segment revenues21.7 %21.2 %Segment operating income as a percentage of segment revenues22.7 %23.7 %20.5 %22.0 %
Total Huron:Total Huron:Total Huron:
RevenuesRevenues$317,895 $260,049 Revenues$358,178 $285,370 $1,022,832 $818,744 
Reimbursable expensesReimbursable expenses8,490 4,726 Reimbursable expenses9,288 6,816 25,918 19,034 
Total revenues and reimbursable expensesTotal revenues and reimbursable expenses$326,385 $264,775 Total revenues and reimbursable expenses$367,466 $292,186 $1,048,750 $837,778 
Segment operating income$69,487 $54,552 
Items not allocated at the segment level:
Other operating expenses46,340 33,548 
Depreciation and amortization4,716 5,046 
Operating income18,431 15,958 
Total other income (expense), net(2,584)22,169 
Income before taxes15,847 38,127 
Income tax expense2,428 11,275 
Net income$13,419 $26,852 
Earnings per share:
Basic$0.70 $1.29 
Diluted$0.68 $1.27 
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Segment and Consolidated Operating Results
(in thousands, except per share amounts):
Segment and Consolidated Operating Results
(in thousands, except per share amounts):
Three Months Ended
March 31,
Segment and Consolidated Operating Results
(in thousands, except per share amounts):
Three Months Ended
September 30,
Nine Months Ended
September 30,
20232022Segment and Consolidated Operating Results
(in thousands, except per share amounts):
2023202220232022
Segment operating incomeSegment operating income$88,870 $70,049 $245,377 $188,571 
Items not allocated at the segment level:Items not allocated at the segment level:
Other operating expensesOther operating expenses43,086 34,875 129,563 96,376 
Restructuring chargesRestructuring charges4,095 804 6,881 2,763 
Depreciation and amortizationDepreciation and amortization4,347 5,071 13,441 15,171 
Operating incomeOperating income37,342 29,299 95,492 74,261 
Total other income (expense), netTotal other income (expense), net(6,047)(3,896)(13,365)10,946 
Income before taxesIncome before taxes31,295 25,403 82,127 85,207 
Income tax expenseIncome tax expense9,779 7,662 22,480 26,739 
Net incomeNet income$21,516 $17,741 $59,647 $58,468 
Earnings per share:Earnings per share:
BasicBasic$1.15 $0.88 $3.15 $2.85 
DilutedDiluted$1.10 $0.86 $3.05 $2.80 
Other Operating Data:Other Operating Data:Other Operating Data:
Number of revenue-generating professionals by segment (at period end):Number of revenue-generating professionals by segment (at period end):Number of revenue-generating professionals by segment (at period end):
HealthcareHealthcare1,985 1,647 Healthcare2,083 1,686 2,083 1,686 
EducationEducation1,633 1,231 Education1,799 1,543 1,799 1,543 
Commercial (1)
Commercial (1)
1,395 1,145 
Commercial (1)
1,459 1,342 1,459 1,342 
TotalTotal5,013 4,023 Total5,341 4,571 5,341 4,571 
Revenue by capability:Revenue by capability:Revenue by capability:
Consulting and Managed Services (2)
Consulting and Managed Services (2)
$177,194 $150,584 
Consulting and Managed Services (2)
$214,688 $155,901 $589,137 $454,356 
DigitalDigital140,701 109,465 Digital143,490 129,469 433,695 364,388 
TotalTotal$317,895 $260,049 Total$358,178 $285,370 $1,022,832 $818,744 
Number of revenue-generating professionals by capability (at period end):Number of revenue-generating professionals by capability (at period end):Number of revenue-generating professionals by capability (at period end):
Consulting and Managed Services (3)
Consulting and Managed Services (3)
2,360 2,003 
Consulting and Managed Services (3)
2,483 2,098 2,483 2,098 
DigitalDigital2,653 2,020 Digital2,858 2,473 2,858 2,473 
TotalTotal5,013 4,023 Total5,341 4,571 5,341 4,571 
Utilization rate by capability (4):
Utilization rate by capability (4):
Utilization rate by capability (4):
ConsultingConsulting76.3 %71.4 %Consulting77.3 %72.5 %76.5 %73.0 %
DigitalDigital71.0 %72.4 %Digital75.4 %70.1 %73.7 %71.6 %
(1)The majority of our revenue-generating professionals within our Commercial segment can provide services across all of our industries, including healthcare and education.
(2)Managed Services capability revenues within our Healthcare segment was $19.8$16.7 million and $13.8$17.6 million for the three months ended March 31,September 30, 2023 and 2022, respectively; and $53.8 million and $47.5 million for the nine months ended September 30, 2023 and 2022, respectively.
Managed Services capability revenues within our Education segment was $4.6$5.0 million and $3.4$4.1 million for the three months ended March 31,September 30, 2023 and 2022, respectively; and $14.6 million and $11.3 million for the nine months ended September 30, 2023 and 2022, respectively.
(3)The number of Managed Services revenue-generating professionals within our Healthcare segment as of March 31,September 30, 2023 and 2022 was 726757 and 543,547, respectively.
The number of Managed Services revenue-generating professionals within our Education segment as of March 31,September 30, 2023 and 2022 was 101105 and 92,97, respectively.
(4)Utilization rates are presented for our revenue-generating professionals who primarily bill on an hourly basis. We do not present utilization rates for our Managed Services professionals as most of the revenues generated by these employees are not billed on an hourly basis.

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Non-GAAP Measures
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
20232022 2023202220232022
RevenuesRevenues$317,895 $260,049 Revenues$358,178 $285,370 $1,022,832 $818,744 
Net incomeNet income$13,419 $26,852 Net income$21,516 $17,741 $59,647 $58,468 
Add back:Add back:Add back:
Income tax expenseIncome tax expense2,428 11,275 Income tax expense9,779 7,662 22,480 26,739 
Interest expense, net of interest incomeInterest expense, net of interest income4,303 2,196 Interest expense, net of interest income5,047 3,111 15,146 7,753 
Depreciation and amortizationDepreciation and amortization6,553 7,122 Depreciation and amortization6,300 7,019 19,183 21,238 
Earnings before interest, taxes, depreciation and amortization (EBITDA)26,703 47,445 
EBITDAEBITDA42,642 35,533 116,456 114,198 
Add back:Add back:Add back:
Restructuring chargesRestructuring charges2,284 1,555 Restructuring charges5,402 1,332 9,385 4,956 
Other losses435 12 
Other gains, netOther gains, net(14)(67)(202)(34)
Transaction-related expensesTransaction-related expenses— 50 Transaction-related expenses302 — 302 50 
Unrealized gain on preferred stock investmentUnrealized gain on preferred stock investment— (26,964)Unrealized gain on preferred stock investment— — — (26,964)
Foreign currency transaction losses, net80 19 
Foreign currency transaction losses (gains), netForeign currency transaction losses (gains), net(332)(328)36 (409)
Adjusted EBITDAAdjusted EBITDA$29,502 $22,117 Adjusted EBITDA$48,000 $36,470 $125,977 $91,797 
Adjusted EBITDA as a percentage of revenuesAdjusted EBITDA as a percentage of revenues9.3 %8.5 %Adjusted EBITDA as a percentage of revenues13.4 %12.8 %12.3 %11.2 %
Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted Earnings per Share
Three Months Ended
March 31,
Three Months Ended
September 30,
Nine Months Ended
September 30,
20232022 2023202220232022
Net incomeNet income$13,419 $26,852 Net income$21,516 $17,741 $59,647 $58,468 
Weighted average shares - dilutedWeighted average shares - diluted19,699 21,167 Weighted average shares - diluted19,475 20,615 19,578 20,899 
Diluted earnings per shareDiluted earnings per share$0.68 $1.27 Diluted earnings per share$1.10 $0.86 $3.05 $2.80 
Add back:Add back:Add back:
Amortization of intangible assetsAmortization of intangible assets2,231 2,860 Amortization of intangible assets1,997 2,818 6,202 8,496 
Restructuring chargesRestructuring charges2,284 1,555 Restructuring charges5,402 1,332 9,385 4,956 
Other losses435 12 
Other gains, netOther gains, net(14)(67)(202)(34)
Transaction-related expensesTransaction-related expenses— 50 Transaction-related expenses302 — 302 50 
Unrealized gain on preferred stock investmentUnrealized gain on preferred stock investment— (26,964)Unrealized gain on preferred stock investment— — — (26,964)
Tax effect of adjustmentsTax effect of adjustments(1,312)5,959 Tax effect of adjustments(2,037)(1,082)(4,157)3,576 
Total adjustments, net of taxTotal adjustments, net of tax3,638 (16,528)Total adjustments, net of tax5,650 3,001 11,530 (9,920)
Adjusted net incomeAdjusted net income$17,057 $10,324 Adjusted net income$27,166 $20,742 $71,177 $48,548 
Adjusted weighted average shares - dilutedAdjusted weighted average shares - diluted19,699 21,167 Adjusted weighted average shares - diluted19,475 20,615 19,578 20,899 
Adjusted diluted earnings per shareAdjusted diluted earnings per share$0.87 $0.49 Adjusted diluted earnings per share$1.39 $1.01 $3.64 $2.32 
        
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Three Months Ended March 31,September 30, 2023 Compared to Three Months Ended March 31,September 30, 2022
Revenues
Revenues by segment and capability for the three months ended March 31,September 30, 2023 and 2022 were as follows:
Revenues (in thousands)Revenues (in thousands)Three Months Ended
March 31,
Increase / (Decrease)Revenues (in thousands)Three Months Ended
September 30,
Increase / (Decrease)
20232022$%20232022$%
Segment:Segment:Segment:
HealthcareHealthcare$149,049 $121,876 $27,173 22.3 %Healthcare$179,177 $131,319 $47,858 36.4 %
EducationEducation104,147 80,662 23,485 29.1 %Education111,043 94,347 16,696 17.7 %
CommercialCommercial64,699 57,511 7,188 12.5 %Commercial67,958 59,704 8,254 13.8 %
Total revenuesTotal revenues$317,895 $260,049 $57,846 22.2 %Total revenues$358,178 $285,370 $72,808 25.5 %
Capability:Capability:Capability:
Consulting and Managed ServicesConsulting and Managed Services$177,194 $150,584 $26,610 17.7 %Consulting and Managed Services$214,688 $155,901 $58,787 37.7 %
DigitalDigital140,701 109,465 31,236 28.5 %Digital143,490 129,469 14,021 10.8 %
Total revenuesTotal revenues$317,895 $260,049 $57,846 22.2 %Total revenues$358,178 $285,370 $72,808 25.5 %
Revenues increased $57.8$72.8 million, or 22.2%25.5%, to $317.9$358.2 million for the firstthird quarter of 2023 from $260.0$285.4 million for the firstthird quarter of 2022. The overall increase in revenues reflects continued strength in demand for our Digital capability services across all segments; as well as strengthened demand for our Consulting and Managed Services offeringscapability across all segments, as well as continued strength in demand for our Digital capability services within our Education and Healthcare and Education segments, which reflectssegments. These increases in revenue reflect our focus on accelerating growth in our healthcare and education industries and growing our presence in commercial industries. Additional information on our revenues by segment follows.
Healthcare revenues increased $27.2$47.9 million, or 22.3%36.4%, driven by strengthened demand for our performance improvement, revenue cycle managed servicesstrategy and businessinnovation, and financial advisory solutions within our Consulting and Managed Services capability, as well as strengthened demand for our technology and analytics services within our Digital capability. These increases in demand were partially offset by a decrease in demand for our culture and organization excellence solution within our Consulting and Managed Services capability. Revenues in the firstthird quarter of 2023 included $0.3$0.1 million of incremental revenues from our acquisitionacquisitions of Customer Evolution, LLC and Roundtable Analytics, Inc, which waswere completed in December 2022.2022 and September 2023, respectively.
The number of revenue-generating professionals within our Healthcare segment grew 20.5%23.5% to 1,9852,083 as of March 31,September 30, 2023, compared to 1,6471,686 as of March 31,September 30, 2022.
Education revenues increased $23.5$16.7 million, or 29.1%17.7%, driven by strengthened demand for our technology and analytics services and software products within our Digital capability, as well as strengthened demand for our strategy and operations and research solutions within our Consulting and Managed Services capability.
The number of revenue-generating professionals within our Education segment grew 32.7%16.6% to 1,6331,799 as of March 31,September 30, 2023, compared to 1,2311,543 as of March 31,September 30, 2022.
Commercial revenues increased $7.2$8.3 million, or 12.5%13.8%, driven by strengthened demand for our technology and analytics services within our Digital capability and our restructuring and turnaround solutionfinancial advisory solutions within our Consulting and Managed Services capability, partially offset by a decreasedecreases in demand for our strategy and innovation solution within our Consulting and Managed Services capability and technology and analytics services within our Digital capability.
The number of revenue-generating professionals within our Commercial segment grew 21.8%8.7% to 1,3951,459 as of March 31,September 30, 2023, compared to 1,1451,342 as of March 31,September 30, 2022.
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Operating Expenses
Operating expenses for the firstthird quarter of 2023 increased $59.1$67.2 million, or 23.8%25.6%, over the firstthird quarter of 2022.
Operating expenses and operating expenses as a percentage of revenues were as follows:
Operating Expenses (in thousands, except amounts as a percentage of revenues)Operating Expenses (in thousands, except amounts as a percentage of revenues)Three Months Ended March 31,Increase / (Decrease)Operating Expenses (in thousands, except amounts as a percentage of revenues)Three Months Ended September 30,Increase / (Decrease)
2023202220232022
Direct costsDirect costs$228,383 71.9%$187,247 72.0%$41,136 Direct costs$244,774 68.3%$193,368 67.8%$51,406 
Reimbursable expensesReimbursable expenses8,624 2.7%4,756 1.8%3,868 Reimbursable expenses9,497 2.7%6,917 2.4%2,580 
Selling, general and administrative expensesSelling, general and administrative expenses62,289 19.6%48,395 18.6%13,894 Selling, general and administrative expenses64,347 18.0%54,458 19.1%9,889 
Restructuring chargesRestructuring charges2,284 0.7%1,555 0.6%729 Restructuring charges5,402 1.5%1,332 0.5%4,070 
Depreciation and amortizationDepreciation and amortization6,374 2.0%6,864 2.7%(490)Depreciation and amortization6,104 1.7%6,812 2.3%(708)
Total operating expensesTotal operating expenses$307,954 96.9%$248,817 95.7%$59,137 Total operating expenses$330,124 92.2%$262,887 92.1%$67,237 
Direct Costs
Direct costs increased $41.1$51.4 million, or 22.0%26.6%, to $228.4$244.8 million for the firstthird quarter of 2023 from $187.2$193.4 million for the firstthird quarter of 2022. The $41.1$51.4 million increase primarily related to a $35.3$48.1 million increase in compensation costs for our revenue-generating professionals as we continue to invest in and grow our talented team to meet increased market demand. Specifically, the increase in compensation costs is primarily attributable to a $25.1 million increase in performance bonus expense, a $21.0 million increase in salaries and related expenses driven by increased headcount and annual salary increases that went into effect in the first quarter of 2023, and increasesa $1.3 million increase in performance bonus expense and share-based compensation expense. Additional increases in direct costs include a $2.7$1.9 million increase in technology costs and a $1.3 million increase in contractor expenses and a $1.2 million increase in technology costs.expenses. As a percentage of revenues, direct costs decreasedincreased to 71.8%68.3% during the firstthird quarter of 2023, compared to 72.0%67.8% during the firstthird quarter of 2022,2022. This increase was primarily due to an increase in performance bonus expense for our revenue-generating professionals, as a percentage of revenue; partially offset by revenue growth that outpaced the increase in compensation costssalaries and related expenses for our revenue-generating professionals; partially offset by the increase in contractor expenses, as percentages of revenues.professionals.
Reimbursable Expenses
Reimbursable expenses are billed to clients at cost and primarily relate to travel and out-of-pocket expenses incurred in connection with client engagements. These expenses are also included in total revenues and reimbursable expenses. We manage our business on the basis of revenues before reimbursable expenses, which we believe is the most accurate reflection of our services because it eliminates the effect of reimbursable expenses that are also included as a component of operating expenses.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $13.9$9.9 million, or 28.7%18.2%, to $62.3$64.3 million in the firstthird quarter of 2023 from $48.4$54.5 million in the firstthird quarter of 2022. The $13.9$9.9 million increase primarily related to an $8.6a $8.9 million increase in compensation costs for our support personnel driven by a $4.3$4.5 million increase in salaries and related expenses, a $3.0 million increase in performance bonus expense, a $1.6 million increase in share-based compensation expense, and a $1.4 million increase in legal expenses. These increases were partially offset by a $1.1 million decrease in practice administration and meetings expenses. As a percentage of revenues, selling, general and administrative expenses decreased to 18.0% during the third quarter of 2023, compared to 19.1% during the third quarter of 2022. This decrease was primarily attributable to decreases in practice administration and meetings expenses and third-party professional expenses, as well as revenue growth that outpaced the increase in salaries and related expenses for our support personnel; partially offset by an increase in performance bonus expense, as a percentage of revenues.
Restructuring Charges
Restructuring charges for the third quarter of 2023 were $5.4 million, compared to $1.3 million for the third quarter of 2022. In the third quarter of 2023, we exited our office space in Lexington, Massachusetts which resulted in a $3.5 million non-cash impairment charge on the related right-of-use operating lease asset and fixed assets of that office space. Restructuring charges for the third quarter of 2023 also included $1.2 million of employee-related expenses and $0.7 million of rent and related expenses, net of sublease income, for previously vacated office spaces.
The $1.3 million of restructuring charges recognized in the third quarter of 2022 included $0.7 million of rent and related expenses, net of sublease income, for previously vacated office spaces; $0.5 million for the early termination of a contract; and $0.1 million of employee-related expenses.
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Depreciation and Amortization
Depreciation and amortization expense decreased $0.7 million, or 10.4%, to $6.1 million in the third quarter of 2023, compared to $6.8 million in the third quarter of 2022. The $0.7 million decrease in depreciation and amortization expense was primarily attributable to intangible assets acquired in business acquisitions that were fully amortized in prior periods and a decrease in amortization of intangible assets acquired in business acquisitions due to the accelerated basis of amortization in prior periods.
Operating Income and Operating Margin
Operating income increased $8.0 million, or 27.5%, to $37.3 million in the third quarter of 2023 from $29.3 million in the third quarter of 2022. Operating margin, which is defined as operating income expressed as a percentage of revenues, increased to 10.4% for the three months ended September 30, 2023, compared to 10.3% for the three months ended September 30, 2022.
Operating income and operating margin for each of our segments is as follows. See the Segment and Consolidated Operating Results table above for a reconciliation of our total segment operating income to consolidated Huron operating income.
Segment Operating Income (in thousands, except operating margin percentages)Three Months Ended September 30,Increase / (Decrease)
20232022
Healthcare$46,888 26.2%$33,045 25.2%$13,843 
Education26,550 23.9%22,851 24.2%3,699 
Commercial15,432 22.7%14,153 23.7%1,279 
Total segment operating income$88,870 $70,049 $18,821 
Healthcare operating income increased $13.8 million, or 41.9%, primarily due to the increase in revenues as well as a decrease in practice administration and meetings expenses; partially offset by increases in compensation costs for our revenue-generating professionals, contractor expenses, and compensation costs for our support personnel. The increases in compensation costs for our revenue-generating professionals and support personnel were primarily driven by an increase in performance bonus expense, an increase in headcount, annual salary increases that went into effect in the first quarter of 2023, and an increase in share-based compensation expense. Healthcare operating margin increased to 26.2% from 25.2% primarily driven by a decrease in practice administration and meetings expenses and revenue growth that outpaced the increase in compensation costs for our revenue-generating professionals; partially offset by an increase in contractor expenses, as a percentage of revenues.
Education operating income increased $3.7 million, or 16.2%, primarily due to the increase in revenues as well as a decrease in contractor expenses, partially offset by increases in compensation costs for our revenue-generating professionals and technology expenses. The increase in compensation costs was primarily driven by an increase in headcount, annual salary increases that went into effect in the first quarter of 2023, and an increase in performance bonus expense. Education operating margin decreased to 23.9% from 24.2% primarily driven by increases in compensation costs for our revenue-generating professionals and technology expenses, as percentages of revenue; partially offset by a decrease in contractor expenses.
Commercial operating income increased $1.3 million, or 9.0%, primarily due to the increase in revenues as well as a decrease in contractor expenses, partially offset by increases in compensation costs for our revenue-generating professionals. Commercial operating margin decreased to 22.7% from 23.7% primarily driven by increases in compensation costs for our revenue-generating professionals and support personnel, as percentages of revenues; partially offset by a decrease in contractor expenses.
Other Income (Expense), Net
Interest expense, net of interest income increased $1.9 million to $5.0 million in the third quarter of 2023 from $3.1 million in the third quarter of 2022, which was primarily attributable to higher interest rates and higher levels of borrowing under our credit facility during the third quarter of 2023 compared to the third quarter of 2022. See “Liquidity and Capital Resources” below and Note 6 “Financing Arrangements” within the notes to our consolidated financial statements for additional information about our senior secured credit facility.
Other expense, net decreased $0.2 million to $1.0 million in the third quarter of 2023 from $0.8 million in the third quarter of 2022. The decrease in other expense, net includes the decrease in the loss recognized for the market value of our investments that are used to fund our deferred compensation liability.
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Income Tax Expense
For the three months ended September 30, 2023, our effective tax rate was 31.2% as we recognized income tax expense of $9.8 million on income of $31.3 million. The effective tax rate of 31.2% was less favorable than the statutory rate, inclusive of state income taxes, of 26.6% primarily due to tax expense related to nondeductible losses on our investments used to fund our deferred compensation liability and certain nondeductible expense items.
For the three months ended September 30, 2022, our effective tax rate was 30.2% as we recognized income tax expense of $7.7 million on income of $25.4 million. The effective tax rate of 30.2% was less favorable than the statutory rate, inclusive of state income taxes, of 26.4% primarily due to tax expense related to nondeductible losses on our investments used to fund our deferred compensation liability and certain nondeductible expense items.
Net Income and Earnings per Share
Net income increased $3.8 million to $21.5 million for the three months ended September 30, 2023 from $17.7 million for the same period last year. Diluted earnings per share for the third quarter of 2023 increased to $1.10 compared to $0.86 for the third quarter of 2022, driven by the increase in net income and a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan.
EBITDA and Adjusted EBITDA
EBITDA increased $7.1 million to $42.6 million for the third quarter of 2023 from $35.5 million for the third quarter of 2022. The increase in EBITDA was primarily attributable to the increase in segment operating income, offset by the increase in corporate expenses, excluding the impact of the change in the market value of our deferred compensation liability.
Adjusted EBITDA increased $11.5 million to $48.0 million in the third quarter of 2023 from $36.5 million in the third quarter of 2022. The increase in adjusted EBITDA was primarily attributable to the increase in segment operating income, excluding the impact of segment restructuring charges, partially offset by the increase in corporate expenses.
Adjusted Net Income and Adjusted Earnings per Share
Adjusted net income increased $6.4 million to $27.2 million in the third quarter of 2023, compared to $20.7 million in the third quarter of 2022. Adjusted diluted earnings per share increased to $1.39 for the third quarter of 2023, compared to $1.01 for the third quarter of 2022, driven by the increase in adjusted net income and a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan.
Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022
Revenues
Revenues by segment and capability for the nine months ended September 30, 2023 and 2022 were as follows:
Revenues (in thousands)Nine Months Ended
September 30,
Increase / (Decrease)
20232022$%
Segment:
Healthcare$501,994 $381,669 $120,325 31.5 %
Education325,884 263,234 62,650 23.8 %
Commercial194,954 173,841 21,113 12.1 %
Total revenues$1,022,832 $818,744 $204,088 24.9 %
Capability:
Consulting and Managed Services$589,137 $454,356 $134,781 29.7 %
Digital433,695 364,388 69,307 19.0 %
Total revenues$1,022,832 $818,744 $204,088 24.9 %
Revenues increased $204.1 million, or 24.9%, to $1.02 billion for the first nine months of 2023 from $818.7 million for the first nine months of 2022. The overall increase in revenues reflects continued strength in demand for both our Consulting and Managed Services capability and Digital capability across all segments, which reflects our focus on accelerating growth in our healthcare and education industries and growing our presence in commercial industries. Additional information on our revenues by segment follows.
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Healthcare revenues increased $120.3 million, or 31.5%, primarily driven by strong results in our performance improvement solution due to strengthened demand and exceeding performance expectations on certain performance-based arrangements. The increase in Healthcare revenue was also attributable to strengthened demand for our technology and analytics services within our Digital capability, as well as strengthened demand for our financial advisory, revenue cycle managed services, and strategy and innovation solutions within our Consulting and Managed Services capability. Revenues in the first nine months of 2023 included $0.6 million of incremental revenues from our acquisitions of Customer Evolution, LLC and Roundtable Analytics, Inc, which were completed in December 2022 and September 2023, respectively.
The number of revenue-generating professionals within our Healthcare segment grew 23.5% to 2,083 as of September 30, 2023, compared to 1,686 as of September 30, 2022.
Education revenues increased $62.7 million, or 23.8%, driven by strengthened demand for our technology and analytics services and software products within our Digital capability, as well as strengthened demand for our strategy and operations and research solutions within our Consulting and Managed Services capability.
The number of revenue-generating professionals within our Education segment grew 16.6% to 1,799 as of September 30, 2023, compared to 1,543 as of September 30, 2022.
Commercial revenues increased $21.1 million, or 12.1%, driven by strengthened demand for our financial advisory solutions within our Consulting and Managed Services capability and our technology and analytics services within our Digital capability, partially offset by a decrease in demand for our strategy and innovation solution within our Consulting and Managed Services capability.
The number of revenue-generating professionals within our Commercial segment grew 8.7% to 1,459 as of September 30, 2023, compared to 1,342 as of September 30, 2022.
Operating Expenses
Operating expenses for the first nine months of 2023 increased $189.7 million, or 24.9%, over the first nine months of 2022.
Operating expenses and operating expenses as a percentage of revenues were as follows:
Operating Expenses (in thousands, except amounts as a percentage of revenues)Nine Months Ended September 30,Increase / (Decrease)
20232022
Direct costs$708,355 69.3%$569,848 69.6%$138,507 
Reimbursable expenses26,242 2.6%19,249 2.4%6,993 
Selling, general and administrative expenses190,655 18.6%148,886 18.2%41,769 
Restructuring charges9,385 0.9%4,956 0.6%4,429 
Depreciation and amortization18,621 1.8%20,578 2.5%(1,957)
Total operating expenses$953,258 93.2%$763,517 93.3%$189,741 
Direct Costs
Direct costs increased $138.5 million, or 24.3%, to $708.4 million for the first nine months of 2023 from $569.8 million for the first nine months of 2022. The $138.5 million increase primarily related to a $124.6 million increase in compensation costs for our revenue-generating professionals as we continue to invest in and grow our talented team to meet increased market demand. Specifically, the increase in compensation costs is primarily attributable to a $71.3 million increase in salaries and related expenses driven by increased headcount and annual salary increases that went into effect in the first quarter of 2023, a $48.1 million increase in performance bonus expense, and a $4.9 million increase in share-based compensation expense. Additional increases in direct costs include a $6.0 million increase in contractor expenses, a $4.6 million increase in technology costs, and a $1.2 million increase in project costs. As a percentage of revenues, direct costs decreased to 69.3% during the first nine months of 2023, compared to 69.6% during the first nine months of 2022. The decrease was primarily due to revenue growth that outpaced the increase in salaries and related expenses for our revenue-generating professionals; partially offset by an increase in performance bonus expense, as a percentage of revenue.
Reimbursable Expenses
Reimbursable expenses are billed to clients at cost and primarily relate to travel and out-of-pocket expenses incurred in connection with client engagements. These expenses are also included in total revenues and reimbursable expenses. We manage our business on the basis of revenues before reimbursable expenses, which we believe is the most accurate reflection of our services because it eliminates the effect of reimbursable expenses that are also included as a component of operating expenses.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $41.8 million, or 28.1%, to $190.7 million in the first nine months of 2023 from $148.9 million in the first nine months of 2022. The $41.8 million increase primarily related to a $32.2 million increase in compensation costs for our support personnel driven by a $10.9 million increase in deferred compensation expense attributable to the change in market value of our deferred compensation liability, a $1.9$10.2 million increase in salaries and related expenses, a $6.3 million increase in performance bonus expense, and a $1.6$4.9 million increase in share-based compensation expense. The increase in deferred compensation expense is offset by an increase in the gain recognized for the change in the market value of investments that are used to fund our deferred compensation liability and recognized in other income, net. Additionally, selling, general and administrative expenses increased by $5.3$9.5 million for non-payroll costs driven by a $2.0$3.2 million increase in promotion and marketing expenses, a $2.1 million increase in software and data hosting expenses, a $1.3 million increase in practice administration and meetings expenses, and a $2.0$1.1 million increase in promotion and marketing expenses, and a $1.0 million gain recognized in the first quarter of 2022 related to the sale of our aircraft.legal expenses. As a percentage of revenues, selling, general and administrative expenses increased to 19.6%18.6% during the first quarternine months of 2023, compared to 18.6%18.2% during the first quarternine months of 2022. This increase was primarily attributable to the increasesan increase in deferred compensation expense, and practice administration and meetings expenses, as percentagesa percentage of revenues; partially offset by revenue growth that outpaced the increase in other salaries and related expenses for our support personnel.
Restructuring Charges
Restructuring charges for the first quarternine months of 2023 were $2.3$9.4 million, compared to $1.6$5.0 million for the first quarternine months of 2022. In the first quarternine months of 2023, we exited our office spacespaces in Hillsboro, Oregon which resultedand Lexington, Massachusetts, resulting in anon-cash impairment charges of $1.9 million non-cash impairment chargeand $3.5 million, respectively, on the related fixed assets and right-of-use operating lease asset of that office space.assets and fixed assets. Additionally, in the first quarternine months of 2023, we recognized, $0.4$2.2 million of additional restructuring expense for rent and related expenses, net of sublease income, for previously vacated office spaces.
The $1.6 million of restructuring charges incurred in the first quarter of 2022 included $0.6employee-related expenses; $1.3 million for rent and related expenses, net of sublease income, for previously vacated office spaces, $0.5spaces; $0.3 million related to the abandonment of a capitalized software development project; and $0.2 million related to non-cash lease impairment charges driven by updated sublease assumptions for previously vacated office spaces.
The $5.0 million of restructuring charges incurred in the first nine months of 2022 included $1.7 million of employee-related expenses; $1.7 million for rent and related expenses, net of sublease income, for previously vacated office spaces; $0.6 million for third-party transaction expenses related to the modification of our operating model; $0.5 million for the early termination of a contract; $0.3 million of accelerated amortization of capitalized software implementation costs for a cloud-computing arrangement that is no longer in use,use; and $0.1 million for third-party transaction expenses related to the modificationdivestiture of our operating model.
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2021.
Depreciation and Amortization
Depreciation and amortization expense decreased $0.5$2.0 million, or 7.1%9.5%, to $6.4$18.6 million infor the first quarternine months of 2023, compared to $6.9$20.6 million in thefor first quarternine months of 2022. The $0.5$2.0 million decrease in depreciation and amortization expense was primarily attributable to intangible assets acquired in business acquisitions that were fully amortized in prior periods and a decrease in the amortization of intangible assets acquired in business acquisitions due to the accelerated basis of amortization in prior periods.
Operating Income and Operating Margin
Operating income increased $2.5$21.2 million or 15.5%, to $18.4$95.5 million in the first quarternine months of 2023 from $16.0$74.3 million in the first quarternine months of 2022. Operating margin, which is defined as operating income expressed as a percentage of revenues, decreasedincreased to 5.8%9.3% for the threefirst nine months ended March 31,of 2023, compared to 6.1%9.1% for the threefirst nine months ended March 31,of 2022.
Operating income and operating margin for each of our segments is as follows. See the Segment and Consolidated Operating Results table above for a reconciliation of our total segment operating income to consolidated Huron operating income.
Segment Operating Income (in thousands, except operating margin percentages)Segment Operating Income (in thousands, except operating margin percentages)Three Months Ended March 31,Increase / (Decrease)Segment Operating Income (in thousands, except operating margin percentages)Nine Months Ended September 30,Increase / (Decrease)
2023202220232022
HealthcareHealthcare$32,255 21.6%$28,032 23.0%$4,223 Healthcare$128,294 25.6%$91,441 24.0%$36,853 
EducationEducation23,165 22.2%14,306 17.7%8,859 Education77,112 23.7%58,848 22.4%18,264 
CommercialCommercial14,067 21.7%12,214 21.2%1,853 Commercial39,971 20.5%38,282 22.0%1,689 
Total segment operating incomeTotal segment operating income$69,487 $54,552 $14,935 Total segment operating income$245,377 $188,571 $56,806 
Healthcare operating income increased $36.9 million, or 40.3%, primarily due to the increase in revenues,revenues; partially offset by increases in compensation costs for our revenue-generating professionals, contractor expenses, and contractor expenses.compensation costs for our support personnel. The increaseincreases in compensation costs wasfor our revenue-generating professionals and support personnel were primarily driven by an increase in headcount, annual salary increases that went into effect in the first quarter of 2023, and increasesan increase in performance bonus expense, and an increase in share-based compensation expense. Healthcare operating margin decreasedincreased to 25.6% from 24.0% primarily due to the increase in contractor expenses, as a percentage of revenues; partially offset by revenue growth that outpaced the increase in compensation costs for our revenue-generating professionals.professionals; partially offset by an increase in contractor expenses, as a percentage of revenues.
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Education operating income increased $18.3 million, or 31.0%, primarily due to the increase in revenues as well as a decrease in contractor expenses,expenses; partially offset by increases in compensation costs for our revenue-generating professionals, technologydata hosting expenses, and promotion and marketing expenses.expenses, practice administration and meetings expenses and compensation costs for our support personnel. The increaseincreases in compensation costs wasfor our revenue-generating professionals and support personnel were primarily driven by an increase in headcount, annual salary increases that went into effect in the first quarter of 2023, and an increase in performance bonus expense. Education operating margin increased to 23.7% from 22.4% primarily driven by the decrease in contractor expenses and revenue growth that outpaced the increase in compensation costs for our revenue-generating professionals.
Commercial operating income increased primarily due to the increase in revenues, as well as decreases in compensation costs for our support personnel and restructuring charges;expenses; partially offset by increases in compensation costs for our revenue-generating professionals and promotiondata hosting expenses, as percentages of revenue.
Commercial operating income increased $1.7 million, or 4.4%, primarily due to the increase in revenues, largely offset by increases in compensation costs for our revenue-generating professionals and marketingcontractor expenses. The increase in compensation costs for our revenue-generating professionals was primarily driven by an increase in performance bonus expense, an increase in headcount, and annual salary increases that went into effect in the first quarter of 2023, and an increase in performance bonus expense.2023. Commercial operating margin increaseddecreased to 20.5% from 22.0% primarily due to the decreasesdriven by an increase in compensation costs for our support personnel and restructuring charges; partially offset by the increase in promotion and marketing expenses,revenue-generating professionals, as a percentage of revenues.revenues; partially offset by decreases in contractor expenses and compensation costs for our support personnel.
Other Income (Expense), Net
Interest expense, net of interest income increased $2.1$7.4 million to $4.3$15.1 million in the first quarternine months of 2023 from $2.2$7.8 million in the first quarternine months of 2022, which was primarily attributable to higher interest rates and higher levels of borrowing under our credit facility and higher interest rates during the first quarternine months of 2023 compared to the first quarternine months of 2022. See “Liquidity and Capital Resources” below and Note 6 “Financing Arrangements” within the notes to our consolidated financial statements for additional information about our senior secured credit facility.
Other income, net decreased $22.6$16.9 million to $1.7$1.8 million in the first quarternine months of 2023 from $24.4$18.7 million in the first quarternine months of 2022. The decrease in other income, net was primarily attributable to a $27.0 million unrealized gain recognized in the first quarter of 2022 related to the increase in the fair value of our preferred stock investment in Medically Home. See Note 9 “Fair Value of Financial Instruments” within the notes to our consolidated financial statements for additional information on our preferred stock investment in Medically Home. This decrease in other income, net was partially offset by a $4.4$10.9 million increase in the gain recognized for the market value of our investments that are used to fund our deferred compensation liability. During the first quarternine months of 2023, we recognized a $1.8 million gain for the market value of our deferred compensation investments compared to a $2.6$9.1 million loss recognized in the first quarternine months of 2022.
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Income Tax Expense
For the threenine months ended March 31,September 30, 2023, our effective tax rate was 15.3%27.4% as we recognized income tax expense of $2.4$22.5 million on income of $15.8$82.1 million. The effective tax rate of 15.3% was more favorable than the statutory rate, inclusive of state income taxes, of 26.6%, primarily due to a discrete tax benefit for share-based compensation awards that vested during the quarter and a tax benefit related to non-taxable gains on our investments used to fund our deferred compensation liability. These favorable items were partially offset by certain nondeductible expense items.
For the three months ended March 31, 2022, our effective tax rate was 29.6% as we recognized income tax expense of $11.3 million on income of $38.1 million. The effective tax rate of 29.6%27.4% was less favorable than the statutory rate, inclusive of state income taxes, of 26.6% primarily due to certain nondeductible expense items. These unfavorable items were partially offset by a discrete tax benefit for share-based compensation awards that vested during the year.
For the nine months ended September 30, 2022, our effective tax rate was 31.4% as we recognized income tax expense of $26.7 million on income of $85.2 million. The effective tax rate of 31.4% was less favorable than the statutory rate, inclusive of state income taxes, of 26.4%, primarily due to tax expense related to nondeductible losses on our investments used to fund our deferred compensation liability and certain nondeductible expense items.
Net Income from Continuing Operations and Earnings per Share
Net income decreased $13.4increased $1.2 million to $13.4$59.6 million for the threenine months ended March 31,September 30, 2023 from $26.9$58.5 million for the same period last year, driven by the $27.0 million unrealized gain recognized in the first quarter of 2022 related to the increase in fair value of our preferred stock investment. As a result of the decrease in net income, dilutedyear. Diluted earnings per share for the first quarter ofnine months ended September 30, 2023 was $0.68increased to $3.05 compared to $1.27$2.80 for the first quarter of 2022.nine months ended September 30, 2022, driven by a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan and the increase in net income.
EBITDA and Adjusted EBITDA
EBITDA decreased $20.7increased $2.3 million to $26.7$116.5 million for the first quarter ofnine months ended September 30, 2023 from $47.4$114.2 million for the first quarter ofnine months ended September 30, 2022. The decreaseincrease in EBITDA was primarily attributable to the increase in segment operating income; largely offset by the $27.0 million unrealized gain recognized in the first quarter of 2022 related to the increase in the fair value of our preferred stock investment; as well asinvestment and the increase in corporate expenses, excluding the impact of the change in the market value of our deferred compensation liability. These decreases to EBITDA were partially offset by the increase in segment operating income.
Adjusted EBITDA increased $7.4$34.2 million to $29.5$126.0 million in the first quarternine months of 2023 from $22.1$91.8 million in the first quarternine months of 2022. The increase in adjusted EBITDA was primarily attributable to the increase in segment operating income, excluding the impact of segment restructuring charges; partially offset by the increase in corporate expenses, excluding the impacts of the change in the market value of our deferred compensation liability and corporate restructuring charges.
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Adjusted Net Income from Continuing Operations and Adjusted Earnings per Share
Adjusted net income increased $6.7$22.6 million to $17.1$71.2 million in the first quarternine months of 2023 compared to $10.3$48.5 million in the first quarternine months of 2022. As a result ofAdjusted diluted earnings per share increased to $3.64 for the nine months ended September 30, 2023, compared to $2.32 for the nine months ended September 30, 2022, driven by the increase in adjusted net income adjustedand a reduction in diluted earnings pershares outstanding resulting from share was $0.87 for the first quarter of 2023, compared to $0.49 for the first quarter of 2022.repurchases made under our share repurchase plan.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $12.0$9.4 million and $11.8 million at March 31,September 30, 2023 and December 31, 2022, respectively. As of March 31,September 30, 2023, our primary sources of liquidity are cash on hand, cash flows from our U.S. operations, and borrowing capacity available under our credit facility.
Three Months Ended
March 31,
Nine Months Ended
September 30,
Cash Flows (in thousands):Cash Flows (in thousands):20232022Cash Flows (in thousands):20232022
Net cash used in operating activities$(92,101)$(79,099)
Net cash provided by (used in) operating activitiesNet cash provided by (used in) operating activities$54,894 $(5,779)
Net cash used in investing activitiesNet cash used in investing activities(10,172)(3,316)Net cash used in investing activities(25,799)(10,779)
Net cash provided by financing activities102,449 71,387 
Net cash provided by (used in) financing activitiesNet cash provided by (used in) financing activities(31,518)4,752 
Effect of exchange rate changes on cashEffect of exchange rate changes on cash16 (5)Effect of exchange rate changes on cash(13)(144)
Net increase (decrease) in cash and cash equivalents$192 $(11,033)
Net decrease in cash and cash equivalentsNet decrease in cash and cash equivalents$(2,436)$(11,950)
Operating Activities
Our operating assets and liabilities consist primarily of receivables from billed and unbilled services, accounts payable and accrued expenses, accrued payroll and related benefits, operating lease obligations and deferred revenues. The volume of services rendered and the related billings and timing of collections on those billings, as well as payments of our accounts payable and salaries, bonuses, and related benefits to employees affect these account balances. Our purchase obligations primarily consist of payments for software and other information technology products to support our business and corporate infrastructure.
Net cash used inprovided by operating activities increased $13.0 million to $92.1totaled $54.9 million for the threenine months ended March 31,September 30, 2023, from $79.1 million for the three months ended March 31, 2022. The increase incompared to net cash used in operating activities of $5.8 million for the nine months ended September 30, 2022. The increase in net operating cash flows was primarily related to an increase in cash collections in the first nine months of 2023 compared to the same prior year period; partially offset by an increase in salaries and related expenses for our revenue-generating professionals, an increase in payments for selling, general and administrative expenses for the first nine months of 2023 compared to the same prior year period, and an increase in the amount paid for annual performance bonuses in the first quarter of 2023 compared to the first quarter of 2022, an increase in salaries and related expenses for our2022.
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revenue-generating professionals, and increases in payments for selling, general and administrative expensesAdditionally, for the first threenine months of 2023 compared to the same prior year period; largely offset by an increase in cash collections in the first three months of 2023 compared to the same prior year period.
Additionally, in the first quarter of 2023, our unbilled receivables increased partially driven by certain large Healthcare and Education engagements where our services performed and revenue recognized exceeded the amounts billed to clients in accordance with the contractual billing terms. We expect to bill and collect for these services in the second half of 2023. In the future, we may enter into additional client engagements with similar deferred billing terms.
Investing Activities
Our investing activities primarily consist of purchases of complementary businesses; purchases of property and equipment, primarily related to computers and related equipment for our employees and leasehold improvements and furniture and fixtures for office spaces; payments related to internally developed cloud-based software sold to our clients; and investments. Our investments include a convertible note investment in Shorelight Holdings, LLC, a preferred stock investment in Medically Home Group, Inc., and investments in life insurance policies that are used to fund our deferred compensation liability.
The use ofNet cash used in investing activities was $25.8 million for the first threenine months ofended September 30, 2023 which primarily consisted of $6.6$19.6 million for payments related to internally developed software to advance our Healthcare and Education software products; $2.0$5.1 million for purchases of property and equipment, primarily related to purchases of computers and related equipment;equipment and $1.8leasehold improvements for certain office spaces; $2.6 million for contributions to our life insurance policies.
The usepolicies; and $1.6 million for the purchase of a business. These uses of cash for investing activities were partially offset by $3.0 million of cash received for distributions from our life insurance policies that are used to fund our deferred compensation liability.
Net cash used in investing activities was $10.8 million for the first threenine months ended September 30, 2022 which primarily consisted of 2022 included $3.9$9.8 million for purchases of property and equipment, primarily related to purchases of computers and related equipment and leasehold improvements and furniture for certain office spaces and computers and related equipment; $2.3 million for the purchase of a business and $2.1spaces; $6.9 million for payments related to internally developed software.software; and $1.9 million for the purchase of a business. These uses of cash for investing activities were partially offset by $4.8 million of cash received for the sale of our aircraft in the first quarter of 2022.2022 and $3.0 million of cash received for a distribution from our life insurance policies that are used to fund our deferred compensation liability.

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We estimate that cash utilized for purchases of property and equipment and software development in 2023 will total approximately $30$35 million to $35$40 million; primarily consisting of software development costs, information technology related equipment to support our corporate infrastructure, and leasehold improvements and furniture and fixtures for certain office locations.
Financing Activities
Our financing activities primarily consist of borrowings and repayments under our senior secured credit facility, share repurchases, shares redeemed for employee tax withholdings upon vesting of share-based compensation, and payments for contingent consideration liabilities related to business acquisitions. See “Financing Arrangements” below for additional information on our senior secured credit facility.
Net cash provided byused in financing activities was $102.4$31.5 million for the threenine months ended March 31,September 30, 2023. During the threenine months ended March 31,September 30, 2023, we borrowed $201.0$292.0 million primarily to fund our operations, including our annual performance bonus payment in the first quarter of 2023, and made repayments on our borrowings of $44.0$224.0 million. Additionally, during the first threenine months of 2023, we paid $45.1$88.9 million for share repurchases, including $1.1 million related to the settlement of share repurchases that were accrued as of December 31, 2022, and reacquired $9.5$10.1 million of common stock as a result of tax withholdings upon vesting of share-based compensation. We also made deferred acquisition payments of $1.5 million to the sellers of certain businesses we acquired. These payments were primarily the result of achieving specified financial performance targets in accordance with the related purchase agreements.
Net cash provided by financing activities was $71.4$4.8 million for the threenine months ended March 31,September 30, 2022. During the threenine months ended March 31,September 30, 2022, we borrowed $150.0$287.0 million under our credit facility primarily to fund our operations, including our annual performance bonus payment in the first quarter of 2022, and made repayments on our borrowings of $47.8$178.8 million. TheseThe repayments on our borrowings included the repayment of the outstanding principal of our promissory note due 2024 of $2.7 million from the proceeds received for the sale of our aircraft. Additionally, during the first threenine months of 2022, we repurchased and retired $23.9$97.9 million of our common stock under our share repurchase program, of which $2.6 million settled in the fourth quarter of 2022, and settled $0.2 million of share repurchases that were accrued as of December 31, 2021. We alsoIn the first nine months of 2022, we reacquired $6.9$7.5 million of common stock as a result of tax withholdings upon vesting of share-based compensation. We also made deferred acquisition payments of $1.9 million to the sellers of certain businesses we acquired. These payments were primarily the result of achieving specified financial performance targets in accordance with the related purchase agreements.
Share Repurchase Program
In November 2020, our board of directors authorized a share repurchase program permitting us to repurchase up to $50 million of our common stock through December 31, 2021. Subsequent to the initial authorization, our board of directors authorized extensions of the share repurchase program through December 31, 2023 and increased the authorized amount to $300 million. In the fourth quarter of 2023, our board of directors authorized a further extension of the share repurchase program through December 31, 2024 and increased the authorized amount under the share repurchase program from $300 million to $400 million. The amount and timing of repurchases under the share repurchase program were and will continue to be determined by management and depend on a variety of factors, including the trading price of our common stock, capacity under our credit facility, general market and business conditions, and applicable legal requirements. As of March 31,September 30, 2023, $64.8$21.1 million remained available for share repurchases under our share repurchase program.
Financing Arrangements
At March 31,September 30, 2023, we had $447.0$358.0 million outstanding under our senior secured credit facility, as discussed below.
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The Company has a $600 million five-year senior secured revolving credit facility, subject to the terms of a Third Amended and Restated Credit Agreement dated as of November 15, 2022 (the(as amended, the "Amended Credit Agreement") that becomes due and payable in full upon maturity on November 15, 2027. The Amended Credit Agreement provides the option to increase the revolving credit facility or establish term loan facilities in an aggregate amount up to $250 million, subject to customary conditions and the approval of any lender whose commitment would be increased, resulting in a maximum available principal amount under the Amended Credit Agreement of $850 million. The initial borrowings under the Amended Credit Agreement were used to refinance borrowings outstanding under a prior credit agreement, and future borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, share repurchases, permitted acquisitions, and other general corporate purposes.
Fees and interest on borrowings vary based on our Consolidated Leverage Ratio (as defined in the Amended Credit Agreement). At our option, borrowings under the Amended Credit Agreement will bear interest at one, three or six month Term SOFR or an alternate base rate, in each case plus the applicable margin. The applicable margin will fluctuate between 1.125% per annum and 1.875% per annum, in the case of Term SOFR borrowings, or between 0.125% per annum and 0.875% per annum, in the case of base rate loans, based upon our Consolidated Leverage Ratio at such time. Fees and interest on borrowings are paid on a monthly basis.
In April 2023, the Company and PNC Capital Markets, LLC, as Sustainability Structuring Agent, with the consent of the Required Lenders (as defined in the Amended Credit Agreement), amendedentered into the first amendment to the Amended Credit Agreement (the "First Amendment") to incorporate specified key performance indicators with respect to certain environmental, social and governance targets of the Company. Based upon the performance of the Company against those key performance indicators in each Reference Year (as defined in the First Amendment), certain adjustments to the otherwise applicable rates for interest, commitment fees and letter of credit fees will be made. These annual adjustments will not
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exceed an increase or decrease of 0.01% in the aggregate for all key performance indicators in the case of the commitment fee rate or an increase or decrease of 0.05% in the aggregate for all key performance indicators in the case of the Term SOFR borrowings, base rate borrowings or letter of credit fee rate.
Amounts borrowed under the Amended Credit Agreement may be prepaid at any time without premium or penalty. We are required to prepay the amounts outstanding under the Amended Credit Agreement in certain circumstances, including upon an Event of Default (as defined in the Amended Credit Agreement). In addition, we have the right to permanently reduce or terminate the unused portion of the commitments provided under the Amended Credit Agreement at any time.
The Amended Credit Agreement contains usual and customary representations and warranties; affirmative and negative covenants, which include limitations on liens, investments, additional indebtedness, and restricted payments; and two quarterly financial covenants as follows: (i) a maximum Consolidated Leverage Ratio (defined as the ratio of debt to consolidated EBITDA) of 3.75 to 1.00; however the maximum permitted Consolidated Leverage Ratio will increase to 4.25 to 1.00 upon the occurrence of a Qualified Acquisition (as defined in the Amended Credit Agreement), and (ii) a minimum Consolidated Interest Coverage Ratio (defined as the ratio of consolidated EBITDA to interest) of 3.00 to 1.00. Consolidated EBITDA for purposes of the financial covenants is calculated on a continuing operations basis and includes adjustments to add back non-cash goodwill impairment charges, share-based compensation costs, certain non-cash restructuring charges, pro forma historical EBITDA for businesses acquired, and other specified items in accordance with the Amended Credit Agreement. For purposes of the Consolidated Leverage Ratio, total debt is on a gross basis and is not netted against our cash balances. At March 31,September 30, 2023 and December 31, 2022, we were in compliance with these financial covenants. Our Consolidated Leverage Ratio as of March 31,September 30, 2023 was 2.751.82 to 1.00, compared to 1.92 to 1.00 as of December 31, 2022. Our Consolidated Interest Coverage Ratio as of March 31,September 30, 2023 was 12.6310.86 to 1.00, compared to 14.04 to 1.00 as of December 31, 2022.
The Amended Credit Agreement contains restricted payment provisions, including a potential limit on the amount of dividends we may pay. Pursuant to the terms of the Amended Credit Agreement, if our Consolidated Leverage Ratio is greater than 3.50, the amount of dividends and other Restricted Payments (as defined in the Amended Credit Agreement) we may pay is limited to an amount up to $50 million.
Principal borrowings outstanding under the Amended Credit Agreement at March 31,September 30, 2023 and December 31, 2022 totaled $447.0$358.0 million and $290.0 million, respectively. These borrowings carried a weighted average interest rate of 4.8%4.4% at March 31,September 30, 2023 and 3.8% at December 31, 2022, including the impact of the interest rate swaps described in Note 8 “Derivative Instruments and Hedging Activity” within the notes to the consolidated financial statements. The borrowing capacity under the revolving credit facility is reduced by any outstanding borrowings under the revolving credit facility and outstanding letters of credit. At March 31,September 30, 2023, we had outstanding letters of credit totaling $0.6 million, which are used as security deposits for our office facilities. As of March 31,September 30, 2023, the unused borrowing capacity under the revolving credit facility was $152.4$241.4 million.
Future Financing Needs
Our primary financing need is to fund our long-term growth. Our growth strategy is to expand our service offerings, which may require investments in new hires, acquisitions of complementary businesses, possible expansion into other geographic areas, and related capital expenditures.
We believe our internally generated liquidity, together with our available cash, and the borrowing capacity available under our revolving credit facility will be adequate to support our current financing needs and long-term growth strategy. Our ability to secure additional financing in the future, if needed, will depend on several factors, including our future profitability, the quality of our accounts receivable and unbilled services, our relative levels of debt and equity, and the overall condition of the credit markets.
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OFF-BALANCE SHEET ARRANGEMENTS
We are not a party to any material off-balance sheet arrangements.
CRITICAL ACCOUNTING POLICIES
Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We regularly review our financial reporting and disclosure practices and accounting policies to ensure that our financial reporting and disclosures provide accurate information relative to the current economic and business environment. The preparation of financial statements in conformity with GAAP requires management to make assessments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Critical accounting policies are those policies that we believe present the most complex or subjective measurements and have the most potential to impact our financial position and operating results. While all decisions regarding accounting policies are important, we believe there are five accounting policies that could be considered critical: revenue recognition, allowances for doubtful accounts and unbilled services, business combinations, carrying values of goodwill and other intangible assets, and accounting for income taxes. For a detailed discussion of these critical accounting policies, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to our critical accounting policies during the threenine months ended March 31,September 30, 2023.
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NEW ACCOUNTING PRONOUNCEMENTS
No new accounting pronouncements or changes in accounting pronouncements have been issued or adopted that are material to our consolidated financial statements since those included in our Annual Report on Form 10-K for the year ended December 31, 2022.
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are exposed to market risks primarily from changes in interest rates and foreign currency exchange rates and changes in the market value of our investments. We use certain derivative instruments to hedge a portion of the interest rate and foreign currency exchange rate risks.
Interest Rate Risk
We have exposure to changes in interest rates associated with borrowings under our bank credit facility, which have variable interest rates tied to Term SOFR or an alternate base rate, at our option. At March 31,September 30, 2023, we had borrowings outstanding under the credit facility totaling $447.0$358.0 million that carried a weighted average interest rate of 4.8%4.4%, including the impact of the interest rate swaps described below. A hypothetical 100 basis point change in the interest rate would have a $2.0$1.1 million effect on our pretax income on an annualized basis, including the effect of the interest rate swaps. At December 31, 2022, we had borrowings outstanding under the credit facility totaling $290.0 million that carried a weighted average interest rate of 3.8% including the impact of the interest rate swaps described below. A hypothetical 100 basis point change in the interest rate would have had a $0.9 million effect on our pretax income on an annualized basis, including the effect of the interest rate swaps.
We enter into forward interest rate swap agreements to hedge against the interest rate risks of our variable-rate borrowings. Under the terms of the interest rate swap agreement, we receive from the counterparty interest on the notional amount based on one-monthone month Term SOFR and we pay to the counterparty a stated, fixed rate. As of March 31,September 30, 2023 and December 31, 2022, the aggregate notional amount of our forward interest rate swap agreements was $250.0 million and $200.0 million, respectively. The outstanding interest rate swap agreements as of March 31,September 30, 2023 are scheduled to mature on a staggered basis through February 29, 2028.
Foreign Currency Risk
We have exposure to changes in foreign currency exchange rates between the U.S. Dollar (USD) and the Indian Rupee (INR) related to our operations in India. We hedge a portion of our cash flow exposure related to our INR-denominated intercompany expenses by entering into non-deliverable foreign exchange forward contracts. As of March 31,September 30, 2023 and December 31, 2022, the aggregate notional amounts of these contracts were INR 789.61,371.2 million, or $9.6$16.5 million, and INR 657.9 million, or $8.0 million, respectively, based on the exchange rates in effect as of each period end. The outstanding foreign exchange forward contracts as of March 31,September 30, 2023 are scheduled to mature monthly through December 29, 2023.August 31, 2024.
We use a sensitivity analysis to determine the effects that market foreign currency exchange rate fluctuations may have on the fair value of our foreign currency exchange rate hedge portfolio. The sensitivity of the hedge portfolio is computed based on the market value of future cash flows as affected by changes in exchange rates. This sensitivity analysis represents the hypothetical changes in value of the hedge position and does not reflect the offsetting gain or loss on the underlying exposure. A hypothetical 100 basis point change in the foreign currency exchange rate between the USD and INR would have an immaterial impact on the fair value of our hedge instruments as of March 31,September 30, 2023 and December 31, 2022.
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Market Risk
We have a 1.69% convertible debt investment in Shorelight Holdings, LLC, a privately-held company, which we account for as an available-for-sale debt security. As such, the investment is carried at fair value with unrealized holding gains and losses excluded from earnings and reported in other comprehensive income. As of March 31,September 30, 2023, the fair value of the investment was $62.8$61.8 million, with a total cost basis of $40.9 million. At December 31, 2022, the fair value of the investment was $57.6 million, with a total cost basis of $40.9 million.
We have a preferred stock investment in Medically Home Group, Inc. ("Medically Home"), a privately-held company, which we account for as an equity security without a readily determinable fair value using the measurement alternative. As such, the investment is carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment. Any unrealized holding gains and losses resulting from observable price changes are recorded in our consolidated statement of operations. As of March 31,September 30, 2023 and December 31, 2022, the carrying value of the investment was $33.6 million with a total cost basis of $5.0 million. During the first quarter of 2022, we recognized an unrealized gain of $27.0 million on our preferred stock investment resulting from an observable price change of preferred stock with similar rights and preferences to our preferred stock investment issued by Medically Home. Following our purchase, we have not identified any impairment of our investment.
We do not use derivative instruments for trading or other speculative purposes. From time to time, we invest excess cash in short-term marketable securities. These investments principally consist of overnight sweep accounts. Due to the short maturity of these investments, we have concluded that we do not have material market risk exposure. Refer to Note 8 “Derivative Instruments and Hedging Activity” within the notes to our consolidated financial statements for additional information on our derivative instruments.
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ITEM 4.CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of March 31,September 30, 2023. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31,September 30, 2023, our disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports we file or submit under the Exchange Act, and such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31,September 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION 
ITEM 1.LEGAL PROCEEDINGS.
From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business. As of the date of this Quarterly Report on Form 10-Q, we are not a party to any litigation or legal proceeding or subject to any claim that, in the current opinion of management, could reasonably be expected to have a material adverse effect on our financial position or results of operations. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results.
ITEM 1A.RISK FACTORS.
See Part 1, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the Securities and Exchange Commission on February 28, 2023, for a complete description of the material risks we face.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
On September 1, 2023, as partial consideration for our acquisition of Roundtable Analytics, Inc., we issued 16,337 shares of our common stock, par value $0.01 per share, with an aggregate value of $1.6 million. The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction by an issuer not involving a public offering.
Our Stock Ownership Participation Program and 2012 Omnibus Incentive Plan permit the netting of common stock upon vesting of restricted stock awards to satisfy individual tax withholding requirements. During the quarter ended March 31,September 30, 2023, we reacquired 135,4203,820 shares of common stock with a weighted average fair market value of $70.37$84.43 as a result of such tax withholdings.
In November 2020, our board of directors authorized a share repurchase program permitting us to repurchase up to $50 million of our common stock through December 31, 2021. Subsequent to the initial authorization, our board of directors authorized extensions of the share repurchase program through December 31, 2023 and increased the authorized amount to $300 million. In the fourth quarter of 2023, our board of directors authorized a further extension of the share repurchase program through December 31, 2024 and increased the authorized amount under the share repurchase program from $300 million to $400 million. The amount and timing of repurchases under the share
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repurchase program were and will continue to be determined by management and depend on a variety of factors, including the trading price of our common stock, capacity under our credit facility, general market and business conditions, and applicable legal requirements. As of September 30, 2023, $21.1 million remained available for share repurchases under our share repurchase program.
The following table provides information with respect to purchases we made of our common stock during the quarter ended March 31,September 30, 2023.
Period
Total Number of Shares Purchased (1)
Average Price
Paid per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
Dollar Value of Shares
that may yet be
Purchased under the
Plans or Programs (2)
January 1, 2023 - January 31, 2023273,369 $69.42 263,948 $90,558,075 
February 1, 2023 - February 28, 2023368,946 $69.69 368,946 $64,836,694 
March 1, 2023 - March 31, 2023125,999 $70.22 — $64,836,694 
Total768,314 $69.68 632,894 
Period
Total Number of Shares Purchased (1)
Average Price
Paid per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
Dollar Value of Shares
that may yet be
Purchased under the
Plans or Programs (2)
July 1, 2023 - July 31 20239,811 $80.79 6,100 $49,121,613 
August 1, 2023 - August 31, 2023211,895 $98.26 211,786 $28,305,510 
September 1, 2023 - September 30, 202372,402 $99.87 72,402 $21,072,842 
Total294,108 $98.07 290,288 
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(1)The number of shares repurchased included 9,4213,711 shares in JanuaryJuly 2023 and 125,999109 shares in MarchAugust 2023 to satisfy employee tax withholding requirements. These shares do not reduce the repurchase authority under the share repurchase program.
(2)As of the end of the period.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4.MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5.OTHER INFORMATION.
None.Securities Trading Plans of Directors and Executive Officers
The following table describes contracts, instructions or written plans for the sale or purchase of our securities adopted by our executive officers and/or directors during the third quarter of 2023, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), referred to as Rule 10b5-1 trading plans.
Name and TitleActionDate of Rule 10b5-1 Trading Plan ActionScheduled Expiration Date of Rule 10b5-1 Trading PlanAggregate Number of Shares to be Sold
John McCartney - Non-Executive Chairman of the BoardAdoption8/2/20237/31/20245,400
C. Mark Hussey - President, Chief Executive Officer and DirectorAdoption8/29/20238/28/202451,628
During the third quarter of 2023, none of our executive officers or directors terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
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ITEM 6.EXHIBITS.
(a) The following exhibits are filed as part of this Quarterly Report on Form 10-Q. 
    Incorporated by Reference
Exhibit
Number
Exhibit DescriptionFiled
herewith
Furnished
herewith
FormPeriod
Ending
ExhibitFiling
Date
10.13.1
X8-K10.15/2/2023
31.1X
31.2X
32.1X
32.2X
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X
101.SCHInline XBRL Taxonomy Extension Schema DocumentX
101.CALInline XBRL Taxonomy Extension Calculation LinkbaseLink base DocumentX
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentX
101.PREInline XBRL Taxonomy Extension Presentation Linkbase DocumentX
101.DEFInline XBRL Taxonomy Extension Definition Linkbase DocumentX
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)X
†    Pursuant to Regulation S-K 601(b)(10)(iv), certain exhibits to this Exhibit have been omitted. The Company agrees to furnish supplementally to the Securities and Exchange Commission, upon its request, a copy of any or all omitted exhibits.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Huron Consulting Group Inc.
(Registrant)
Date:MayNovember 2, 2023/s/    JOHN D. KELLY
John D. Kelly
Executive Vice President,
Chief Financial Officer and Treasurer

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