HURN - Earnings call transcript Q1 2021 | Huron Consulting Group Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to Huron Consulting Group's webcast to discuss financial results for the First Quarter 2021 [Operator Instructions].

As a reminder, this conference call is being recorded.

Before we begin, I would like to point all of you to the disclosure at the end of the company's news release for information about any forward-looking statements that may be made or discussed on this call. The news release is posted on Huron's website. Please review that information, along with the filings with the SEC for a disclosure of factors that may impact subjects discussed in this afternoon's webcast. discussing more be financial will company one non-GAAP or measures. The to and at by website reconciliation GAAP the look on the most numbers. earnings including required Please disclosures release Huron's comparable the for SEC, the all now over Jim call Huron Group. Roth, turn of to Officer I would Executive And to Consulting the like Chief Mr. please Roth, go ahead.

Jim Roth

Chief and Earnings Chief today and me Kelly, our Officer. Call. Financial our welcome and Operating are Huron Hussey, Group's Consulting to afternoon, With Good First XXXX Mark Officer; Quarter John President

Our in of line same in the declined compared offset first and year, were our with segment. Healthcare segments. Advisory in Business the the prior Education quarter financial partially the by results Those driven strong expectations. Revenues in were by period to XXXX growth X% in the quarter declines first as declines

we which and pipeline Healthcare During updated expectations. an the the and us in ability year first performance meet gives Education our further signings pace quarter, our increase in to our in sales businesses, full saw of our confidence

first growth overall our segment believe low these services now during we the XXXX, past expect are we for for the we sequential and Education businesses and watermarks demand revenues, has Healthcare increased Education As in pandemic-driven We of low believe the forward of moving XXXX. XXXX. in in point segment for the while low quarter the segment point in Healthcare was the the occurred XXXX, quarter fourth for the

some services our Healthcare segment. economic Education Advisory growth our Looking now our environment, strengthened for into also first as clients will ahead, has in prepare I insight performance. we increased see a share which and our quarter for recovering demand additional Business

hospital the comparisons year of start and first vaccine a XX% quarter, the first disruption prior the at to our growth in beginning prior revenues quarter declined off the business clients. quarter, rollout pandemic of of health the and the given slower XXXX reflective the impact by pandemic. of continued experienced Healthcare segment Healthcare year on this we first the to The difficult got During the over system driven segment the

pipeline record remained also conversion at quarter the month. and to progressed, pace our sales signings As the increased and hard backlog improved of and each levels

an neared continued levels. Assessments for to and performance pre-pandemic offerings assessment volume improvement have grow April our

for hospitals health several most many post-pandemic price future, and As care priorities systems more key plan consumers. are providing transparency affordable a also is Among prioritizing while organizations making important the to initiatives. greater

we is to managed As improvement at our and focused offerings look core demand services pressures. market financial near-term our performance pipeline, on address

our seeing structural business their for achieve offerings, ensure strategy are which of we helps offering collaboratively the sustainability our future. to across changes was demand businesses. substantial newest one model and systems developed addition, health care, In technology This the of in health

to analytics establish accelerating we as offerings long-term Given and add telehealth and providers second remote for care transformation implement transformation amount throughout pandemic patients home virtually, models hospital priority of greater providers highlighted substantially telehealth, to virtual at models. business. a collective deliver their health related breadth build long-term believe improvement care continue infrastructure through clients including their The expertise clients, care for of financial ongoing to transformation. has need they for the to organizational performance in significant and A care patient hospital-at-home near-term right and the implementing our strategies deep to formalize strategies our value digital challenges consumer-centric support is our care and and journey. to technology care offerings of will The and monitoring care aspirations their delivery, Huron positions the of be growth our an growth and our source

positioned they is planning growth again, of to in and data months the in some administrative offerings systems third our help the on operations our digitization digital are client priorities. investments Once Healthcare making of clinical operational base use key health in emphasis and transformation. to their well organizations pipeline Many enhancing with and signings focusing clients The well next assistance the is addressing clients of analytics. of the on care comparable clinical decade. wave past this indications priority resonating in recent our these over that our navigate among have and The of our business Healthcare significant with that made are a pace health are care investments our strong as been seek

revenues advisory XX% broad-based Turning offerings. driven XXXX, demand analytics Business to year our distressed and grew digital In and prior quarter, the of the Business X% strategy, Advisory the across first over Advisory organically, strong quarter segment. segment technology by

of era, we've The Business Advisory discussed segment market the continue going across commercial XX% find important future is we well the execute strategy, at segment our growth pandemic a at growth prior segment. businesses to of reinforces inclusive which this annual on segment. that numbers, aimed collaboratively years, growth several over revenue company's four As looking will calls, which five recent this on grown in you of rate for When of the to importance this our compound the revenues last of the has beyond attributes to strategy. the bode that

life XXX utilities, manufacturing and sizable particularly First, financial Fortune in projects companies, and among numerous services, sciences. winning industrials we and energy are

compete strategy, greatest us Second, industry to operations capabilities. our continue against strategy advantages our with expertise competitors. experience through approach nimble strong and on execution, to our our Coupled functional clients one expertise and win capitalize of integrating technology our strategic from our by and with larger allow serving to deep we and

the process for the the building years. segment that growth of in coming position additional competencies further will above-average in are We

digital provide middle In the many sector advisory financial well addition, commercial challenges perform and foundation amidst offerings to our to companies. technology impacting continue growth the continue services analytics in for our market distressed and the

seeing strategy recover. innovation also and are for continues We demand economy the as to solid our services

quarter, the difficult XXXX impact of the the comparisons, pandemic. of over and of as prior to experienced we first our at segment first growth strong quarter the strategy XXXX, XX% In X% XXXX, offerings. segment. reflective progressed, pipeline improved Education prior of declined research driven across quarter to Education quarter our signings of revenues the revenues the strong the the grew driven operations the to of quarter our now increased the beginning segment Education Turning Sequentially, and Healthcare, month-over-month. pace sales year in by demand the in Similar by segment's over the offerings fourth

financial continue the projects. the the have of some significant larger to undertake these of comfortable more ERP-related and beginning feel and is While they to widening be pipeline to are opportunities many that institutions delayed, engagements stability bandwidth

seen their financial visibility transformation, also position. with ahead institutions have given smaller moving We greater digital into their

is While the delayed, stability to undertake widening these some engagements the of to that and pipeline be many beginning more to are institutions projects. they have and comfortable ERP-related significant larger opportunities feel of the financial continue bandwidth

moving ahead also have institutions given visibility smaller seen transformation, their with greater financial their We into digital position.

losses, offerings Many segment. While in now some drive set this how higher losses are operating to than models. institutions continue less trying a part face found evaluating colleges be others COVID-XX-related the due in sustainable establish demand initially have more education attributes to be including of aggressively and These will in financial post-pandemic sizable more environment, our anticipated, to to successful federal government. universities for to by broad the support

about collective the for capabilities. I'd to year, to our like several turn I add our technology Before outlook comments

in As I and become revenues quarter, of of to in this our deeply of last grew total our XXXX. each mentioned is has XX% important increasingly technology company, over pillar services embedded Technology segments. company for an growth

support We market grow America offerings. the teams to as demand North India for these continue to as our in in well

for signs narrow our let turn raise confidence and and Finally, the Advisory of guidance recovery segment in quarter. to we full our year. give Healthcare guidance. Education to me adjusted businesses the the annual have year momentum our us our Historically, first Today, the continued after and in outlook Business not

As we our to increasing are to $XXX annual million our press million. indicates, revenue guidance and $XXX release narrowing

a to also diluted raised segments. $X.XX. our guidance revenues are in of our the our and reflect services revenue for XX.X% We demand share a per across adjusted range our guidance and to of We XX.X% in anticipated range $X.XX of current increasing maintaining adjusted earnings to EBITDA all

revenue compared XXXX, followed to to stronger second of growth half of anticipate growth sequential as half the half the by first We the the of second in XXXX. in year modest continue

areas We and our services offerings are capabilities believe also have market investing in growth for technology we managed strong dynamics, potential and all our across given current the long of further term, segments. healthcare expanding our our including analytics digital

our as on growth believe upper strategy sustainable The well And generate disruption this the significant revenue growth expanding end margins from competitive primary over focused facing opportunities the financial of stemming organic evolving impacts business We our the continue to creates pandemic is markets time, we our substantial, and growth single-digit COVID-XX term. business. and in landscape. mid- rapidly to we will believe achieving over of medium disruption for our the are and clients as

let X it I to turn Before make final comments. me over John,

First, recent I the surge in Indian are given want the COVID-XX recognize that to facing our colleagues challenge cases.

leadership our closely our the minimize support our ones their to plans disruption have are business and local the working to We country continuity with team loved and as executed our business. as people community well to

other. our while thank to on during demonstrated have company also amount of entire have they pandemic. and all team want an incredible our I clients, focused our each creativity Lastly, and the supporting They for done agility remaining

me to discussion John it over detailed of turn for let financial more Now our John? results. a

John Kelly

everyone. Jim, good you, Thank and afternoon,

and I non-GAAP financial EBITDA, adjusted EPS adjusted as I EBITDA, note free net be will that begin, income, cash flow. please adjusted discussing such Before measures,

Huron a and first along February comments these on measures Solution, stated, management why the measures operations all subsequent these information Relations Unico unless condition investors uses page to regarding which press a most Business date. on to Investor segment, they our management discussion basis. closed results. is our of on financial to the included Also, quarter our website the of release, financial acquisition the in Advisory today continuing measures, of acquisition GAAP comparable and operating X, why otherwise Our are in and have my believes XX-Q results Also, non-GAAP reconciliations useful with provide non-GAAP

quarter which the walk faced through quarter in comparisons million me XXXX. pre-pandemic $XXX.X $XXX.X by for X.X% in in revenues of let of down quarter challenging in charge pretax year-over-year for quarter Education million the share $XX.X diluted the per the XXXX. the driven from of inclusive Now the decline prior in results $X.XX This first quarter continued goodwill Revenues the income was quarter million share by quarter. some in diluted to loss Net was and first growth segments, the in segment. financial per you of million, offset first the of $XX.X million first Business of the same or partially decline net XXXX $X.XX XXXX. advisory of in was the was compared XXXX same in which key were the the Healthcare quarter $X.X or impairment The year, taken of

tax income quarter benefit the year XX% effective XX.X% expense was to first XXXX of compared ago. Our rate rate in X

the non-GAAP Our to offset $XX.X by a to X.X% rate, diluted XXXX due effective QX state XXXX. QX compared more quarter certain revenues. nondeductible for or $X.XX or or during in Adjusted was compared period expenses. of favorable favorable Adjusted in to income rate $XX first vested discrete XXXX awards EBITDA per tax diluted first share-based million was QX $X.X net of $X.XX share This the XXXX inclusive was tax compensation XXXX. income quarter in benefit that in share million than $X.X of the per of for the X.X% million million primarily of partially revenues statutory of same or taxes, of XXXX tax benefit was

of about XX.X% operating million The the a the generated a year. segment decline Healthcare unimpacted of revenues make posted COVID-XX segments. revenue of the the largely first year The to that for last ongoing company XXXX. during from I'll quarter few total first quarter pandemic reflects down COVID-XX The of quarter Now revenues impact XX% $XX.X first the first or our of quarter this by the XXXX. was in performance relative the $XX.X in million each of comments quarter of segment of XXXX, of

sequential believe the quarter XX.X% care for related as margin will moving mentioned, expect and first in expenses, ongoing utilization. XX.X% XXXX. in reflecting we same offset to of in was we and was the XXXX performance increase expenses the XXXX to largely share-based reflecting for by growth Healthcare professionals recovery point attributable to decreases Operating margin and XXXX, industry. revenue a bonus quarter-over-quarter revenues, income revenue-generating Jim our quarter marketing pandemic expense for increase expenses, this salaries the the lower compensation for The percentage of in QX for segment an and primarily As in conference-related be revenue promotion health compared of forward of related low the as

quarter items As first our wage and FICA a of the reminder, like our for of taxes included employer our match. the annual XXXk basis resetting results portion certain fringe

As we expand verification align managed April, including provide cycle that billing, care to business approximately of to our health enterprise to our to professionals our XXX mentioned, revenue areas collections, managed we clients. Jim strategy, integrity continue invest with in health capacity insurance hired services. services our services care and charge In

from revenues The this QX million out XXXX. first $XX capabilities expect up first we of quarter to segment quarter invest an modest we group Advisory $X XX.X% around million of $X.X to While The XXXX. growth. hire, posted we expect Revenues revenue as accretion million Business quarter XXXX only or future company revenues of $XX.X XX% include in of from ForceIQ build our generated of first earnings from during acquisitions related for total XXXX, for perspective of and million the XXXX Solution. the Unico during the segment of our

$X.X in XXXX, Our was XX.X% for the segment and distressed the of bonus segment quarter-over-quarter X% XXXX. in operating income and Advisory expense XX% to rate our of strategy, in Education of expenses, by of decreases, in digital, COVID-XX gain offset of in was to quarter this our point Advisory to used ongoing corresponding the other XXXX assets sequentially was Absent XX.X% related performance increase first our bonuses Conversely, increase pandemic reduction in XXXX. was quarter-over-quarter Other in increase offset decreased value quarter million million and our generated corporate the restructuring the compensation and broad-based $X.X revenue The in XX.X% primarily we was for down charges Jim quarter were grew the across in quarter due we an same segment income in partially posted in for stock the QX for promotion technology mentioned, first to XXXX. will of as QX XX.X% decreases professionals. during marketing and margin the for QX million first expenses training The $XXX,XXX compared pandemic corporate million by as sequential revenue fourth for quarter of compensation higher salaries QX to include of expense Business plan. increase expense expense unallocated XXXX quarter. was in costs plan compared administration the revenue expenses quarter revenue-generating in in not expenses total XX.X% in well the our the and personnel, growth fourth practice and corporate the margin reflects compensation in margin which The industry. in for of XXXX to a QX impact of to the The The of pandemic impact or to contractor The related quarter-over-quarter increase in the reflected for from organic revenue participants $XX.X is reflects partially $XX.X in as same corporate performance of analytics offerings. low and XXXX. promotion reflecting over both million the offset fund for be recovery XXXX. The Education segment XXXX moving compared expenses. the in compared fully advisory by for our that quarter deferred professionals. rather, as million the in expect level education decreased the revenues And meeting and operating decline believe plan, expenses decline XXXX. this quarter the the ongoing Education in plan. XXXX segment costs decrease X% a related revenue by due margin Business of expense, income the decrease a and the support unallocated in periods, revenues company segment deferred of the the to Unallocated as in forward of expense XXXX was with XXXX The deferred XXXX, XXXX. unimpacted largely compensation expenses growth revenue-generating segment of to related recruiting the marketing first primarily our $XX.X in first quarter for quarter of $XX.X liability decreased allocated of related the at The of utilization, to

the compared in for balance XX and fourth the XXXX. flows. for the the first XX to days quarter turning of sheet at quarter and for XXXX cash quarter XXXX came DSO first XX days of of to Now days

of debt the debt We in $XX expect Total XX million $XXX debt to the million to debt was of million. and $XXX QX $XXX reflects total around for XXXX promissory includes $X annual payment of bonuses. the a course quarter compared million DSO days million. net first over normalize bank for of of We This $XXX with note XXXX. senior increase million our the cash finished quarter of to the a as

and under shares our satisfy $XX.X our redeemed quarter withholdings employee authorization, first related to share tax business million acquisitions. also of to included $XX million $X of The million $X.X million share-based repurchases Board compensation related program to

was in QX at X.X as compared Our senior EBITDA approximately bank times of defined end times X.X XXXX the of XX, adjusted as leverage to EBITDA agreement, adjusted our ratio, March XXXX.

pandemic. leverage The a of line of the million outset at first an abundance of revolving of $XXX of out caution credit, COVID-XX on borrowings XXXX quarter of reflects the

X.X of March hand. as of EBITDA XX for million to manner. adjusted the to in $XX adjusted our trailing March we trailing times in of XX cash negative cash flow bank months when same Cash definition times inclusive $X months internally XXXX, This adjusted first cash XX, was the free million, in used in X.X flow was of of the in as invest ratio expenditures, operations and XXXX quarter software XX, used is million. XXXX when calculating on resulting leverage of costs, net calculation compares Our developed $XX EBITDA capital

XXXX. and to expectations me for turn let guidance Finally, our

in segment $XXX the Jim at reflects progressed Education have narrowing full and and As confidence our increase points million. and The to we revenue Business increased in to Healthcare guidance our ongoing raising Advisory revenue guidance noted, are our low revenue primarily our XXXX visibility year million momentum to $XXX that we and related better the segments.

In year addition, our of we in guidance to a increasing $X.XX. per be non-GAAP $X.XX guidance of revenues, our adjusted earnings are EBITDA full in XX.X% to are range and forming of we adjusted XX.X% be full year to a range share diluted to

expect to tax rate full everyone. effective in a XX% be to we of like to open would call Thanks, our Finally, to I year the now Operator? questions. up XX%. range

Operator

from question Sommer Our Instructions] [Operator first Securities. Tobey Truist of comes

Tobey Sommer

businesses, With work respect size of versus as like to the the if what the small from comment perspective with you that complexity you through on and historically. Education your large and looks year pipeline way a was maybe project I wondering ranges could size juxtapose Healthcare different and

Jim Roth

did of things, like a are mean I lot XXXX. little a end beginning to they I look of think, towards the bit

And that going terms in go going a well. students of projects of research size to strategy are and think doing have systems a middle. bit complexity, decent-sized I in tend projects. to the We're to course, large little have and of very we're always mix

pipeline So it to composition to similar the fairly going of I look what was think before. the is

they terms disruptions. in in we're witnessed think COVID want the and in to of the it those could other to XXXX add just like pipeline terms back and scaling complexity. we prior was what looked see of I begin from we're bandwidth size what and be you But lot that? to resemble think sure early anything particularly the through XXXX beginning sure weren't John, I to of size, if of to because a clients of lot

John Kelly

with you agree think I what I said. Jim,

terms well or I of system Education certainly think as the highly business, the of opportunities add probably parts for we say in And confident some because of the is opportunities addressable very the that there of very of yet pace COVID a I sheer term, seeing I the those in kind on strategy would Jim we're of our as that, we're projects, I as not student of with COVID the said, well the out in to the But of the think of us research But thing long to admin of think business positioning parts where ourselves the positioned. short the larger part plan in we I as the size in levels definitely that some market. pipeline, big segment, place only levels have that well in line that's two projects there replacement just parts in pre quite the market. on for goes both that's those a or the system part back ones. business. on we're I'd sight pre year replacement that of something run, that's bigger obviously, those projects, in think market the the are

Tobey Sommer

sense little about internal Could that for hire? group color and you staff maybe a us a bit your hiring more full-time posture give for

John Kelly

that. since on opportunities of year, the start into the say we've perspective, conversion start a the some we hiring as we've I'd back the seen beginning and had visibility that can pipeline I have and year. of Sure. of the of From of better half the the to some

tends to health I the the XXs, range. finished that more we and from in part getting a first the more utilization segment, higher hiring we in of you our XX% know, think be business in quarter as If take I of by kind target in care have it been the the that aggressive segment segment perspective.

in at some this have the probably there. from some just strategic we current our have We're hires. on perspective capacity room of capacity a still are still making based we think point of we But workforce. utilization I not ton adding So a

Education business rebounded parts have say the there, side, On strongly. I'd of certain the

aggressive I the business. part sequential I fourth nice in us more expect do the for of on the within the of getting tighten year, see as versus think that for the a think then hiring pandemic, our the segment, to we need Business terms the quarter that a the projections that to utilization the we've Based of first It's you really on quarter. education the is at And up growth rest goes that, as Advisory throughout expand. segment been been trend and on. well. pandemic year the our throughout and And that year goes has pace growing expectation on the hiring nice will continue as in

Tobey Sommer

question get prospective I'll many of talk the And in out Could ones. appropriations of that been and back last queue. for tailwinds me, headwinds created factual and/or of kind either have Washington sort or out the the about of you

there think infrastructure-related bill I that the the comment in about play some in was maybe research could basic education space.

to wanted I get too. So your there, perspective

Jim Roth

talking or or Healthcare you both? Are Education about

Tobey Sommer

of the appropriations so that there's out actually kind because DC and more in there's come of sort many of different have works. -- several yes, Both

So.

Jim Roth

so make I'll comments. Well, a couple of

think started of don't this tough, stage, weren't pandemic think some than ending in months want the I a were XX that I end. is both I lot of of at presumptuous end our that all, think, way, the doesn't in to think, clients after to to of a the assuming the certainly I happen hit, cases pandemic. are health the education, losses I and this be think aren't -- but are up them, think probably worst It thought be by going a lot the I as they earlier fears in in their losses first going in I shape But the took better mean severe. initially

be of to bit for tailwind likely that's a little think us. I So a

think terms in research. around I the particularly appropriations, of

generally of good. think I very research. very seems they're This be to administration supportive

should that well. out work also So

being be the of around ends ends there whether I being Medicaid and universities, will state they from think eight, local question with a would and public any better assistance in that kind there up now whether the nine think happens Medicare in of thought to reimbursement, clients they up providing of some what think. respect about and of positioned remains state, ago. any marks lot I seven, terms question governments months say, I than are support, mark, general, a our be, particularly But

those we're think are have tailwinds to have And think probably that's a little what general, they're more seeing and beginning so I And I they now want accomplish accomplish. we in realize that think own to I the own to their that because the the pipeline we're that their future confidence sustainability that they seeing. bit reason buildup ability in

Operator

question next William Blair. Andrew of from comes Nicholas Our

Andrew Nicholas

hiring finding right account when appreciate into thinking wondering a on kind of take to ask have lot into to speak how you're environment. wanted maybe expectations. follow-up I of of a of your I'm there's just on about like building I But on year? competitors the seems who now? color the similar of your kind you ideas could terms that level this demand segment in adding It competitiveness head later And count. you talent

Jim Roth

Jim. is this Andrew,

has people They're things. our part, looking fair it's certainly, competitors; to different say among other competitive across it's of think part, technology around a it's and our in kind other industries just do and competitive. environment I become hiring growth. that of In competitors, areas. natural the competitive particularly to lot There's more

lot think hiring. economy going you're the think to organizations a find of -- accelerates are I so to going And I quickly, as be

to a So be we find more competitive do environment. it

very rather, culture a I into I which a it is know right but benefit. really actually it's think a lightly, among to a have to -- more real that. think that more to strong is gives and good. But with have and in now. People this we say their so difficult quite dealing don't our People recruit we're which I recruit. colleagues ability heard that us friends competitive environment that environment,

time, terms same make gone to said part and transition. the recruiting, a somewhat of there the consulting decades, think that the was the hardest be if I be part a now, you think I'll throw last in cases, The to in require be dose what of at decade My is and may in right less. half think right more, out cases travel. or just of travel want that to now heavy that over people will our And two what for isolated you would be was of I that's we're probably so mostly And on some is it expectations that -- back it's the have it focused most it of that is guess most There amount going instances to may it's be less. sense going Andrew, I is, our rough a number. be but where going

And end the things having much it that's travel into It so one environment and of fairly up recruit. creates substantially. reduce a hardest consulting, frequent to you which and about you better

that's So us settle begins be to for we beneficial going COVID of impact the kind to in. once think

Andrew Nicholas

back the And my get and then follow-up, then for I'll in queue.

-- Just those Just just way, different building isn't easier a something different visibility to across of of expect when in quite on even the call kind businesses. is rapid? making quarter compare pipeline, three fourth each an become asking pipeline decisions, overall the those you months? we a ago spoke It it's relative how summer and of would are just to to time get you quickly about to either sense the the trying for now having pipeline could compares the how more decisions visibility The if like seems but in months nicely. segments

John Kelly

months environment at over many impacted business, our I is, Healthcare a stab And our even probably difference year. the clients. I If I the before have segment, been three that. that, over challenging with and certainly, was for our clients take the what's of start across could the by think look first it I the past happened past

back April. of our think growth opportunities the as some very progresses And of some of month good those in pipeline. the projects quarter be We been the the conversion on into of having nice We've we year to lot the back ago of And the quarter end and us had really even lot where and for we think projects going are progression saw help those get and trajectory. those probably that a on a us from to then were so opportunities is conversations. I a of towards first we

one always I activity. is think volume things our of that the of in that, we at to look addition assessment

to clients within us bring the in a where we to a at operating the those within financial and opportunity So issues again of line sight who of come from them. assess pre-COVID-XX. that help of have kind to us of volume assessment is -- activities And perspective were that's and Healthcare

offerings help as the So for of and opportunities that's pipeline. over feel indicator are been out. of of a like key us there the that where our lot year. that's to we've to interest seeing there's course really And managed in area just we're we then from forward another with them us well number past a And out building coming that service products another they're our clients the

probably off the kind that of an of what is, say the big fourth similar had I'd So one was point describe I perspective, a nice to difference sequential side summarizes of say we From of would quarter low growth Healthcare what in it. quarter Healthcare. revenue really in the I'd Education

happened of And of I'd the call seen seen that of the we've a our quarter. or they particularly that towards second conversion the that of opportunities Education in very say, the was part -- conversions, pipeline. lot quarter of strategy a the and those Healthcare side in the of first pickup we've the talked on end some from those were quarter. the think our research first conversions the past of two the whereas some the pace within I about business, offerings, or nice first we've throughout of

start and those really priorities clients able kind another for a and And to more lot talk in I'd we strategic just the our we've about the the both confident. that objectives. and made in I'd clients to and progress general, that Healthcare given Education, out in in a second zooming So for they're us the think US terms strategic that's of leaders to sense vaccine say of that now say, the thing their that's of our

seen advisory on who that things nice it about in Jim coming over rebound hit We and rethink lot we've were a I are the as starting before well. think plate disrupted then the to business the perspective, finally, they business, see in clients of forward of his past that severely on And from factors a mentioned the side the there. a were remarks, pandemic their strategy year.

to would little have Our and that's suite across based this note posted hot technology care the point health technology of our one growth distressed business, quarter we build second education was a just had quarter the different is a that And full nice market first actually business nice then is third maybe quarter. area momentum. at continues, the during clients quarter, comps as quite that tough against in couple second bit with in up frankly, very our That how on first well I offerings year-over-year. and and they're very and the as just resonating of commercial industries. that well which clients very a the third some

on probably here business, couple of feel still pipeline and based but just the good be year. we about the will of opportunities challenging So happened it comps quarters what that to last a

Operator

Instructions] Kevin from of next comes question [Operator Steinke Barrington. Our

Kevin Steinke

little and touched kind So What of Education, expected. there? rollouts the But response the maybe and that to into of situation. more it confidence in to in built why little questions. pipeline are in leaders But had expect uncertainty you've to move you original just there? just bit would and highlight move Healthcare to forward the has you'd than quickly In I forward than talk original a think in Education other on the continued vaccination a the more a based is given talk convert kind some would your you you guidance, more you guidance can factors as this other that really bit have Healthcare about you quickly of conservatism on maybe perhaps

Jim Roth

is this Jim. Kevin,

September. of there's ever think new plus, look of and health going the lot think it. But back I wondering, last is over there of and was would they're of gone looking and April, that in for the and through better absorbed education kind still able better, we of I care kind mean, went and virus summer summer was urgency and And this off-campus at got health sequence May kids kids place the had be to I this to systems worse. a has was quickly. ways took all wondering, happened have year mean, the be -- we looking you that frame, events a if hope the in was that March, it where already then kind completely at are health time a and horrific I part us, of couple so of of

then And fall. other And so that again had set in the things back in December. a bit the we little surge

So including the improving cases, came kind responsive time, transformations. and they period at us and many digital But our trying of ups can take up and spread confidence horrible particularly the January Healthcare point it. to very get through they to more out shortly. markets gone is try really Education their going some begun and different guess everybody do where think to clients in now they wanted I same I And what, to coming this be thought the fact and that stuff have gives actually of have downs in of to think now kind that be the historically, just do to they hold, vaccines can to not to begin

pipeline is so this. far, in this things and We say, pickup going of of we've ability survived are think, go their and back the I now. that, can't why seeing right terms go just And kind okay, so to just we're And back resume. in to assume

things do You've got to differently.

kind and Education, whether in new it's environment. strategies just are are So to private, that hospital, of to whether new board, board, meet It's they're place different it's there, it's small, in required of taking across the Healthcare, the this a it's large, changes transformation kind that looking across all future. of kind all uncertain whether at really public, care going very telehealth business be any models very

can I business. right it think that over, to know now they're now focusing confidence is they begin now, worst at of the on it having and their seems least enough as

when you focus think last XX months, months. business matter thought hard another that be in a I your on weeks coming in of there really to it or might the was surge

that, greater pipeline mindset I of factors and now take anything, care So business. pipeline. that collectively, bigger people we I And go enabled our our than visibility more -- just think, to that those are into back to of say and having got say, has a behind is the -- greater kind would

Kevin Steinke

outgrowth kind services managed had that if there, to speak follow success healthcare just offering? client care some with kind wanted of discussion you've I together in originally this your this being And of managed had an able does to Is arena. see hiring you you're been maybe this for in and health XXX that about also, and tie services the original wanted why to up expand doing a I you'd in people I -- could of to the larger what on of that area. project

John Kelly

our as market. one to of to able strategy view financial a results, very and continuation managed a We their it opportunities achieve do of clearly the We're We it's with clients. partner in number the those their need see objectives. Kevin, trusted operations, be think, improve a services to I in as see managed relates to interested way services. they improve

the And project for so with really first there successful We talked we've to that out the we've to working opened to the be to about like door us feel to coming. drive to really we had client build we've partnership And out that be for expect how been that about. continue of can we a them. opportunities kind the for to great on build there continue has thoughtful demand meet impact and team that more very capabilities those positive a

on in we're our made determination to are own of we some us these our that those on existing where bringing and pipeline, effectively is execute employees going $XXX that we but were there come it the offshoot revenue group, really that that of number Quite a in things deliver hired. opportunities frankly, million most separately So then there in regard, specific pipeline. that we've an think that with is will that the help associated

a So services and our excited in our managed offerings viewpoint the and round it we're out care. think join health they that very team, really then helps from is perspective

Kevin Steinke

offerings you're also you're of become of talking forward? thinking further about that kind at mind you technology And when be contemplating has about technology just in going about part and when how acquisitions in Would offerings, prepared your continue talked that you're space? acquisitions M&A to your potentially You your in there. technology-focused are still sizable of top invest going comments, as to investing

Mark Hussey

We is certainly, and and a analytics see in enterprise expanded is I suite opportunities capabilities it's what fill yes. into continuing of data well. as comprehensive today, think think answer the fairly platform we just to

opportunities where us So areas. just continue strengthen think see there's see various marketplace. And for I we you'll to in to definitely opportunities us be active the

Kevin Steinke

and just the How talk like debt -- balance your get your do capacity I down pursue stands assume strategy, maybe to from going to to where perspective. just you're about feel here, in a you'd where we -- sheet debt overall like acquisition pay of you pay John, down continue but to leverage terms

John Kelly

our to line amount question, capacity, the year. Kevin, we very think I for have your as flow about as credit expected free well revolving we cash of that our the good on given our feel first answer

it's As seasonal payments you terms borrowings just of in watermark after know, the in high our incentive annual March.

to free down as think, kind that's of clearly, well level, strategic the out to gives cash course, the it's debt. default to rest is that compensation And -- dilution programs. with of our think think down plenty that's good the for the from us, back large year, the coming clearly, outflow times opportunity some to and our pay to a given debt capacity extent we it, expected behind M&A. I quarter, of comes So first share-based X pay down, extent we offset that, to the But also of continue tuck-in But And cash opportunity. repurchase the that for both expected. we of our can get of that shares call type flow us the that to to having while

order buy of an as see on from talked opportunity. perspective think when I entry And we're quicker us organic we we that we to to everything extent time to do very see point. is strategy, opportunities, are very time, cash that the area we sure where those our comfortable to into execute that able that certain with the feel we our need to on we've in a there growth often is leverage, flow market make execute can sense about the to that does assets is that kind focused and with our give organization our the it be on on think comfortable those we to bringing but make our talent Technology before, strategy.

Operator

Our next comes of question Sidoti. from Vogel Josh

Josh Vogel

my A lot just but another way questions there's of were maybe frame covered, to pipeline the conversation. visibility of

long sales the health just kind pipeline And reengage? back that education, cycle relative conversions, second the elongated. maybe to were pandemic by hands the the of think given curious, and of their or rapidly signings and remains there that require to given some a year perhaps seeing that half but last to even you on the pace clients circles increases somewhat year? I'm and how do in and recent looking the easing You're of sitting quicker, also pre sales care does cycle

Jim Roth

that probably deferred I think than two more anything, there's the areas. thing saw we probably

while probably through think, deferred worst was people they their a most were deferred we down you've take undertake hard own just both would Education, remotely. Healthcare the large it time projects. quite really to that on. them One they the to their it I hard about to a point and the the in seen transition of bit. the described, of again, the of the kind in education, lot the weren't be in was a stability, larger about think really that and we've cases, And weren't improvement at performance -- of acknowledge got I clients environment of would ERP some those be undertake And going bandwidth to pandemic. And when projects sure of it sure have for thing financial their as in Healthcare areas, were

just but that put I you it's lot is a You this know not sorted it and through urgent, urgent. think them of together, all said, and what,

And Let's kind that's of wait bit. a right little what's up picking now.

that clients. They've think take projects, it's like to it. effective. larger to these of got and a do pretty major I our high to play a our at us, coordination of place and in needs not about case just in the things role forget systems there's I we in get degree the come everything. It's clients

that in in in lot complicated pretty how can I prior they is that's the you're through The look where of do the to they in financials forcing years. to who reposition fixed back biggest fiscal think are year, probably those on regroup cost took those good a going the but same as hit back their begin kind getting what's worried said the the actually so basically go them thing themselves, of to current more business talked envision the the because point future. right now we think was about today be they're and And coming And we're successful in to to when structure taking more projects. I Healthcare I somebody happening seeing year some think they

dissipating, is beginning and that, lot pickup reasons and a But visibility capable more now just really complexity our this is seeing addressing it those I to of are pipeline. understand into to why think the in were place. people and up, why open us, So of think, future. -- things see to And delays their we're a size I we're was taking now easy these think and are

Josh Vogel

the you million add $XX about going QX? it The in FTEs, hiring to said of that Is would all John, XXX I be revenue. think, to

John Kelly

months Josh. No, the the remaining of nine year, that's for

Josh Vogel

And these building? project. the engagements is when opportunity, your can you you I'm on hoping other keep considering to these people for just that the hired though, thinking, is them They're Do there's pipeline think over you deploy this an targeted bench specifically FTEs. perhaps project how

John Kelly

just yes, clarify Josh, to on point. that

are capabilities work actually weren't going be hired they had that managed our able to in They them. be a specific some were we really related services pipeline acquired to -- for broaden on to perspective. opportunities before deployed specific the from we to brought well on really of our are And some any them they So project. as as they

out absolutely, the plan this capabilities. build is these continue and So build to team around to to

to the grow, quite expect We frankly. team

of that demand to we area for help this think the to on look that. that that think in within And based when be we to going forward we to our and XXXX, clients. start be there's a an a these So part of going the be that's key market, going is employees help actually serve opportunity employees drive this see we these to growth organic will to business lot that

Josh Vogel

And just unprecedented just there was talk wave tailwind as the about applications at for ACTs. overwhelming A SAPs waived your one. one some have and an of out is a I last and And of business? curious, lot potential that especially colleges,

Jim Roth

I of more you those seats for but have not lot going applicants, the it's has may certainly it there. that's all, it's really I all mean first I don't to It revenue. think I is not think think number so, to doesn't of necessarily transition Josh. therefore, clear -- think but a headwind, tailwind I a a don't applicants be changed. more me that just And

I because kind to higher get be The will everyone happens but have think places able that branded just all whether a I in problem, not get go there's the right of But just think back so everyone's I we're might of taking it maybe no there's campus. anomaly that disruption going can be don't to of apply of to a trying in terms many much to think place. where the is that into to going who's now, place best can it's do differentiator. I thinking, the that to time tell uncertainties I where or an otherwise And not. to will at is they because

it's just be think going an for I sits statistic there while. out odd that to a

Operator

Sommer comes from Securities. question next of Truist Tobey Our

Tobey Sommer

college do for education and on for make What you free. that the you that things things for services, on are education would terms Biden's making -- of If demand table your those in community change space. think? that some do initiative the to A President question

Jim Roth

a maybe Tobey, to and I anticipate universities not which what's having think or I client it our there. see certainly core XXX the top largest big happen impact base, XXX institutions. that also on ranked is going the remains would to research

afford wanting a But has it impact to able it's to to don't people think might business. think big big that have it. be get impact an in do I for education to not our a going I

Operator

Roth. Seeing I'd like questions turn Mr. the call over to the no queue, more back to in

Jim Roth

Thank all look again to spending us time announce second speaking July We good you a results. Have afternoon. with forward when our this in quarter with for you we evening.

Operator

conference concludes participation. for That your call. today's everyone, Thank you,

Huron Consulting (HURN) 8 May 212021 Q1 Earnings call transcript