HURN - Earnings call transcript Q2 2024 | Huron Consulting Group Inc.

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Operator

Good afternoon, and welcome to Huron Consulting Group's webcast to discuss financial results for the second quarter 2024. [Operator Instructions] As a reminder, this conference call is being recorded.

Before we begin, I would like to point all of you to read 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 reconciliation and at required website including comparable the look on numbers. by the GAAP earnings SEC, disclosures Please the release Huron's most of for the to all the now Mark over President Huron Hussey, And and to Consulting Officer call Group. to Executive would like of I turn Chief Mr. please ahead. go Hussey,,

C. Hussey

and Chief John Second we margin to Call. EBITDA With Earnings Officer. afternoon, welcome XX%. Kelly, Chief second achieved Good our XXXX quarter, and our segments, in adjusted to by record Quarter Huron Healthcare Ronnie Financial the In revenues, and Officer; today and our Education Operating solid Consulting are Dail, our Group's we expanded me growth led

XX% the previous watermark to debt cash enabling Our capital also per meaningfully quarter adjusted third flow earnings quarter, our share share repurchases. We than level, in established high higher generated in expanded us reduce last record to ongoing of year. a second record shareholders through returning the the while to

strong per the XXXX, year basis quarter XXXX. half first Our record adjusted the In XX% increased diluted capped of a for performance first grew adjusted earnings and margins results increased half points EBITDA same X.X%, XX period share over revenues second ago. a

of demonstrate allows offerings set impact core at us our the results outset the XXXX. to well the execution of and our levels broadened as strong operating deliver our positive Our of at model to against changes clients business changes the industries to as strategy our new enterprise we made we These operate in efficiency. have

capital shareholders. deliver margins on be superior and driving returns continues effectively focus growth, strategic our Our expanding sustainable for to to deploying revenue

difficult business the profitability, period grew a The ago. relates despite EBITDA over in our points year comparison, it margins As scaling same the second quarter improving adjusted to basis of XXX levers key focus X the capabilities past like over build-out years team's our global earnings our our enhanced power. have utilization the on meaningfully pricing and operating Huron's delivery with the and combined of

to margin progress continue over trend outpaced for objectives. incredibly We quarters EBITDA delivering as Day expect proud our mid-teen XX Investor towards XXXX last financial I'm has we that the this our of our performance team target.

XXXX, medium-term Looking goals the to our progress towards of ahead we remainder expect to financial our continue.

As by the we over first updated of the sequential in growth midpoint and revenue reflected the XXXX X% our of expect half revenue annual half year-over-year. growth second guidance,

before the diving Let performance comment detail in into on me quarter. make one our final more

only because success our talented in market of possible Our the in delivering in than incredibly recognitions being history. for XX-year of team. XXXX, We've our and received Choice year results is numerous any Employer financial in more in an

commitment and are and by at the one our team's honors our to other. as acknowledge of to these people heart our to culture demonstrated collaborative our Our and clients power business

one us operate culture one competitive realize Our as is potential. our of firm to greatest advantages our and to enable full and

in quarter the second over I'll some year into quarter growth of top the Now additional our on quarter prior grew driven ago strategy and year The organizational strong innovation quarter quarter the XXXX. for over and demand in QX offerings. digital and excellence improvement, was by the In share X% second Healthcare segment, of in culture revenues performance. XX% revenues performance increase insights our continued

of demand competitive, our across portfolio health the offerings. operating mixed highly breadth and of for create which remains The to continues environment organizations care solid

be opportunities continue have their hospital future the in to strength, our their challenges from models ongoing advantage operations financial clients over systems hear cases, margins to address or some strategies, some evolve realized opportunities reimbursement or have seeking health In optimize a challenging. is have distress improved, advance business trends many and few to of but their improving the system a competitive Whether and While quarters, the the experiencing market. health volumes position past not.

industry broad track this our solutions clients prove results of to to to more record future positions achieve for of us and and operational, the a sustainable help care expertise, and depth provide them complex challenging long in offerings digital strategic, health array financial Our very well environment.

to segment now year QX in the grew of revenues XX% XXXX in quarter of in Turning in of Education. the quarter over revenues top XX% increase year quarter growth over The second the prior was XXXX. Education the quarter on offerings. university and their they strategy leadership operations threaten education and challenges driven demand The span facing of issues by business vast increased all product areas institution. the are facing are institutions Higher and for that our digital historical complex ago models.

Building [indiscernible]. continues affordability experience the funding mission planning efficiently our whose several our on adviser trends. more and in team of every of saw partner strategically We clients. public challenge further strengthens demographic the perceived sustainable face increased Rising advancing need of we've future. and long-term leadership collectively declining position college institutional expertise, and portfolio example, the in student role the requires to a unfavorable and choice industry even they as and experience nearly President's our on industry expanded difficult of deep achieving new leaders focus more trusted costs made to and for university the as of technologies. while hired We've a value operating both our the For models operate new differentiating to degree investments,

market, growth continued needs unique offerings the well the depth business. our our collectively strength of the a in relationships, of our this clients education higher And our of partner continue us to experience, that evolve, and selling in diversity very as given for we're the the and of positions

large-scale uncertainties macroeconomic quarter approach political and declined capital financial the continued by pressures. for continue more the the expanding reflecting offset executing initiatives Commercial offerings, in demand environments over Revenues markets year our quarter, increase engagements softer given partially a challenging second remains to business, persist. for In strong to we our as the turning in digital our which Commercial the to impact advisory competitive taking demand prior an and Digital offerings, X% segment. Now of and strategy-related see clients cautious in our

in industry, pace digital IT of seeing of decision-making services our offerings. our delays slow some Like competitors we're on spending a the in and many

confidence strategy. growth have platform this the segment in temporary of a our expertise, underlying be to deepening as We and will across softening We broad Commercial pillar remain demand enterprise strategy for robust. of The solid industry portfolio pressures is the remains macroeconomic double-digit set rooms will needs that coupled and abate. to believe digital, believe historic clients our of financial their as with solutions to of offerings, levels our pipeline our and continue digital is segment. of We our broad demand our begin innovation growth key for a solid advisory return

technology and by record partners delivering demand businesses of enable our proven solutions and We of expect will clients of well their that strengthen over results their competitive track and transformation breadth very our and Commercial continue our offerings delivered focus. can advantages. continued to deepen growth our expertise M&A continue capabilities industry's us positions that our we will in time, for for complement and see expand segment opportunities to The

value to executing quarter, model. balanced our one the of outlook business the before drives feature our generated for second strategy. flow I'm significant capital shareholders One In remaining deployment cash flows year. turning comment for free final our is strong distinguishing the going we while of that to record make our cash

the and and growth in a to to returns to fund sheet balance manner to flexibility that believe the us which manage provides to capacity continue part accretive we enhance is strategy. an our We M&A, important with continue shareholders of

let And to turn me outlook. now our finally,

adjusted annual EBITDA our XX guidance and narrowing we're revenue a to of indicates, release points XX% guidance press margin to XX.X%. Our by billion, $X.X $X.XX our billion raising basis annual to to range we're

per raising diluted growth we're the of $X.XX, over midpoint represents year Finally, a range to just to $X.XX our full XXXX. earnings adjusted share XX%

are shorter-term stated our the Commercial revenue our year We offerings previously in softening for the demand our to of guidance range digital half narrowing of the segment. due full lower to

earnings goals progress full the set we our coupled we've scale our And reflects team's steady half XXXX discipline to Investor at Our and made. our Day. make expense towards year efficiency the around forth continue with management, medium-term financial guidance first performance

the to we've our of Investor As clients, teams. of market, their with our our at we proud XXXX enter outlined able the for what I'm X-year in half we business strategy been accomplish their that second Day,

quarter Our XXXX goals. demonstrate in focus of record our the second on and financial results strategic achieving our

evolve for results. growth the discussion of and turn our that continue well clients' continued offerings with more now client years relationships a in John will a for me financial positioned of We strong it the to believe John? let built, our most of challenges. And address our ahead balanced and portfolio detailed the industry to over we're depth we've complex expertise

John Kelly

afternoon, good Thank everyone. you, and Mark,

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

Relations to Investor Our on press condition uses the investors and financial have measures regarding reconciliations operating comparable discussion why measures, along the page useful most with our management measures, website these GAAP the believes of management of release, why provide non-GAAP they information Huron's to these XX-Q non-GAAP and results.

for results quarter, I would financial to housekeeping two our acknowledge items. the discussing Before like

million, First, in pointed. million the our operations. second other net component a This which a settlement was on settled $XX consolidated matter we [indiscernible] of gain statement of for as litigation recorded gains XXXX, $XX quarter of

XXXX exceeds the value legal this to specific the of which litigation gain excluded non-GAAP during is have our settlement from measures We $XX.X incurred million, that the third-party matter. costs of

to I Second, count on revenue-generating head comment a make want professional growth.

June as team. India-based growth head expansion of XX% year-over-year the of included Services Healthcare Our XX count Managed our of

head Excluding Services the impact Managed team, India-based growth X%. the of was count

the key financial Now I'll results second the from share of quarter. some

or quarter revenues XXXX the increase million of diluted our of during GG+A million, compared of in which Net closed of Healthcare Revenues first achieving record our second of driven $X.XX from acquisition, from up in or same Education the per quarter quarter for $X.X was and the $X.XX XXXX was in income segments million included of by for income $XXX.X high, the and share The X.X% XXXX. diluted for share XXXX. million second a of to for quarter quarter quarter $XX.X contribution the growth XXXX. $XX.X net quarter per a full $XXX.X solid were the second million

The mentioned that expenses. outpaced income increase revenues driven earlier I by gain litigation and net settlement in was the

inclusive due is XX% the Adjusted items. or income XXXX. QX EBITDA of rate, quarter the effective a in of favorable XXXX certain XXXX less state compared which $XX.X taxes, in or than statutory million expense QX income to revenues record nondeductible rate of was revenues of was primarily $XX.X in million Our to tax XX.X%, second XX%

adjusted impact the quarter increase the restructuring was in in the The operating segment segment EBITDA for due of income, charges. increase primarily excluding to

forth set We are in Investor achieve we in XXXX, mid-teen our ability net in increase margins, and was a with XXXX, XXXX. second Day. XXXX XXXX confident proud of remain $XX.X in in per our $X.XX margins record we in improving income Adjusted diluted year our million quarter progress adjusted over earnings the or share $XX $X.XX consistent resulting per share to a in full of XX% million, in diluted QX QX compared the to diluted per share goal

broad-based quarter, the Now in the $XXX.X total offerings. capabilities million, second and XX% or and performance segments. organizational and $XX.X in up grew I'll XXXX. and digital demand reflecting million for culture Healthcare X%, strong from the The quarter generated for Services quarter second revenues XX% revenues posted innovation the of Consulting segment Managed of discuss and strategy company and improvement, second reflects in our continued XXXX. increase X.X% of of our This quarter our of of continued offerings. Digital segment respectively, during the the demand each operating Healthcare's excellence revenues

ongoing our million adjustments such we performance-based XXXX adjustments for our the benefits can of a though favorable health business, fee The $XX care second for of vary earn of compared to quarter of clients million and ability fees favorable recognition quarter-to-quarter. an revenue as Second to quarter such is $XX the of in of adjustments performance-based XXXX. drive included attribute significantly

partially expenses, XXXX. segment revenues. increase and of compared The as million acquisition primarily QX company QX The $X.X percentage a posted our $XXX.X Education in by margin of in million, the up in to of for XX.X% The Healthcare XXXX in XX.X% total our $XX.X during of second Education of the professionals XXXX margin in revenue-generating to XX.X% Operating was XX% offset revenues from decrease second increase for revenues or an compensation costs a due contractor segment included million of generated quarter from GG+A. quarter XXXX. was

XXXX. XX% the revenue revenues for primarily XXXX. to contractor compensation cost in the quarter grew Education in The for increase the The as Consulting professionals in was in decrease operating operations XX.X% a over revenue was revenue-generating by and product and Services capability XXXX partially driven quarter in driven quarter for offerings. for digital increased and of our margin Managed offset our in expenses, The operating XX.X% for percentage margin increase second a an demand the of strategy Education's same QX compared and by increasing was personnel by our growth increase costs outpaced that quarter in compensation revenue. support for

company decrease in segment the quarter for our in driven of Commercial partially total of quarter digital slower $XX.X revenues by in $XX.X advisory our to XXXX. We generated XX% of demand for million during offerings, The of posted the an sales financial compared offset second was revenues a The XXXX. increase cycle revenues offerings. million by second

we confident market for shorter-term Commercial we temporary segment, fully the softening the strength macro in our in headwinds the offerings, are capture ongoing of sales trajectory digital despite our pipeline. Mark ease As of the and mentioned, growth long-term demand

the restructuring segment not restructuring litigation revenues, driven as million our for excluding were revenue-generating same decreases XXXX Operating of by of to level, expenses charges to quarter an was $XX offset gain corporate percentage charges, and at professionals costs increase margin XXXX. million partially $XX the compensation compared and by segment in expenses contractor the Corporate QX operating as XX.X% margin in a in in percentage in decrease revenues. $XX.X XXXX million QX the settlement allocated compared for QX was in XXXX. Commercial for The XX.X% a of

second related investment the Unallocated the expense used the XXXX deferred assets corporate liability reflected quarter the compensation income. which fund in million, and to is of gain $XXX,XXX $X.X respectively, to and the of XXXX increase in of other in offset on that included plan, by expenses plan our

of our increased support increases periods, impact and plan to personnel. the million, corporate primarily hosting in for compensation expenses $X.X the both software expenses and in data compensation Excluding deferred due unallocated expense

$XX.X the sheet and the Cash to flow turning operations the XX record software cash second XXXX. of developed from In was the Now for DSO second compared of days was of in we $X XXXX in million. invested capital quarter, quarter inclusive resulting free quarter quarter flow XXXX internally a balance to days and days second the XX cash close costs, quarter the XX at the in expenditures, million. flows. of million of of of first XXXX $XXX.X for

cash was debt of million as debt to in QX million debt $XXX.X bank net XXXX, $XX.X Total June we our million end entirely This of senior consisting compared net XXXX. $XXX.X and of XX, of $XX.X was debt, of the quarter million. a or with decrease

XX, in as consistent Our with XXXX, adjusted bank leverage agreement leverage the XXXX. ratio X.Xx as defined EBITDA XX, June senior was of June our ratio of

$XX.X million the XXX,XXX During used we quarter, to second approximately repurchase shares.

stock repurchased our Since the December common have X of as representing of beginning XXXX, of XXXX. XX, X.X% we shares, outstanding million

our current execute XXXX share million free flow in June continue repurchases the balanced of strategy. on under cash XX, deployment share second capital for and We achieved remained record $XX quarter to repurchase of available XXXX, our As program.

repurchases the continued for several We and strong, the balance M&A. to cumulative years of our believe for accretive strong shareholders share effect capacity well EPS continued expansion. the the return us over remains share At positioned last same has us providing sheet our repurchases time, via

the for to full turn year me our guidance let Finally, XXXX.

the earnings a our guidance previous we revenues reflecting of of increasing reimbursable to diluted $X.XX per of earnings As adjusted revenue XXXX to $X.X of billion Mark our call guidance the Operator? are guidance and as half XX.X%; mentioned, $X.XX our to range expenses of guidance full I before questions. EBITDA revenue our $X.XX. lower everyone. updating increasing a to year range narrowing and a follows: range adjusted billion, range; to XX% as to percentage Thanks, now share our would guidance to revenue a like open to

Operator

Company. William [Operator Nicholas comes Blair Instructions] of & from question Our the line Andrew of first

Andrew Nicholas

ask first. you're to wanted pretty in I temporary being Mark, weakness. this Commercial confident on weakness

to you're a is Is play And of let in could plan of difficult catalyst growth gives what count gas kind time off if a any budget for? other And there you side on restrictions? of you some of to the out? to to head Just of start relatedly, then kind is getting little looking dying some itself the until you Or evidence the somewhat comps expect you over matter would see bit that those budgets this curious to through frame just speak it what these confidence? out?

C. Hussey

historical and that Yes, Andrew, to that start and got that we really levels, macro the of me, is we're are demand It's on we at projects got the that that us, the in seen I in size When feel the itself. where we on. delays the look we've would look at kinds pipeline some reason other really what the engaging bidding confident that the for environments with and is going decision-making elections at there of we've confidence. clients there's environment our

we the are to going we ultimately, to not ready back. And that, see year. So to time believe the of half we're the from second time, signs there's tailwinds -- that call come in

nothing on have the brakes We count longer us change view for we of there's gives But term. tapped -- any in the that trajectory see of kind really additions. head

John Kelly

and we of much some the had the by experienced with our the consistent the year. by million, revenue we expectations guidance in projections half Andrew, our front X add. the of midpoint update is year, during of half the that actually guidance the back backlog, softness first the the the year pipeline the half of we And and look more at that the I'll majority actually of When to of our lowering $XX and year. that's in When by of the back our that look we at supported the of relates months which

already referring So a that I think was significant weakness to. we've of the Mark digested component

Andrew Nicholas

specific to you're maybe that's Commercial growth terms consistent clarify, to with. of John, And saying in

John Kelly

Yes.

Andrew Nicholas

Okay. level a Maybe segment that's a ask expectations. just segue follow-up on good to then

outline call, somewhat fourth quarter us first little You with on that had given was for or different Commercial. the us quarter a bit

months. I think just after a thought little you going bit than X had better Healthcare was

So would if fourth to that guidance think context where segment helpful maybe expectations you today changes. could the are relative just quarter for I call? some level be the additional outline

John Kelly

From -- to lower at Healthcare. year point in a range. the single From a this upper growth perspective, be digits the expecting with start Andrew. full Sure, I'll we're rate double-digit Healthcare to

upper So to that's February the the still range. expect back margins the XX% to be From to up mid- And from single-digit XX% call. an Education range in from for we perspective, we double-digit call expecting as described on be in low-teen and low year a for the now the back revenues to range range, February. we're full the in it Healthcare

again, margins, And with at unchanged expected for part we the there, area low then call. an the double-digit to be relatively the of outset And this we're perspective, also XX% was XX% still business growth. from to in be the where expect XX% be we Commercial expecting the to And in we year, year now range, last is that the double-digit which a And expect remained to XX% range. to margins year. But February flat consistent of range. full low in from the the the the

Andrew Nicholas

the strong movement mean squeeze full and would raise just there if then some also half lower that back just do the were Is the growth mean touch be else outlook that the consistent I I ability the it the to trends? the to Anything you count segment to segment year? for more could really of plans but one in. year. And gives it it level what head you great? you utilization would at I able margin on really, Is level, at Great. that? in

John Kelly

it's John. Andrew, Yes,

half Our team excellent really of throughout job an has done year. the first the managing expenses of

than calls, which our means has talked has attrition, we couple year, stewardship the as by context, been on of anticipated the utilization much as For to forecast, our that what lower we've past important. up been at year. beginning point continue of the on, careful about we teams in expect does of half your the the to the To go more do about year based at utilization back on ramp

the that's think we towards another so the as of half be to going we And get year. back item margin-accretive

And positive we us fully having behind for margin full in then year That's at gain outlook. litigation finally, terms another settlement this settlement of the litigation those mentioned point. factor expenses our that

Operator

Our comes Sommer from next of the of line Tobey question Truth Securities.

Tobey Sommer

sort of that revenue achievable? do for ask achieve you I of this XX%, growth incremental about mid-teens a the to Or wanted Can I guess, for question to the kind broad rate? at next target margin need be you year, growth revenue accelerate to margins.

John Kelly

invest beyond global capacity in delivery we us a full different we next course, Tobey, look just it's that at sake scaling to you're where with using for the continued perspective, revenue some which, need have that business. forward those growth ramp have in -- the this revenue of levers, SG&A, the for continue continue we good underway, oversell there, margin accelerate don't to we in to some the John. that of year order initiatives pricing the the probably that year, that We of to targets libraries we year, see fact, area the our that utilization, gives when really, margins from margin we seeing out model, individual the profile deployment -- feel an discussion our that's

in feel revenue manage a targets of variety good to to the we So towards about margin rates. our ability growth continue different

C. Hussey

we delivered. that are sold been managing engagements I'll are by and their addition Tobey, add, managing that And they objectives, manage we is at compensation, decisions micro targets our is have into as because of really built a a really made director in directors very important individual what which which the everybody's set, is important many I component, margin level very really that, the think, the to have

but growth, the And preserve between so that really that balance line. has in making we nice revenue bottom the sure profitability shifted the

line the top we look on credit is not helpful that by many but SG&A, other the we revenue levers growth contributed so when certainly leveraging of have certainly -- growth. components not at there's just we're that rate the -- So very around

Tobey Sommer

business you're the with potential year and Education and and customers impacts there's protests enrollment over the news delays first last seeing Within with and on the the fundraising, from half certainly -- on of what impacts there, been the pay like is today so for to to athletes, the now growth having does flow rate alter XX for how student segment? in factors do -- the potentially your months, those Or impact outlook business like the the news speak?

C. Hussey

It's in question, centered the the But just a that look even in you've you fair it's very it, so given when And I prominence really, the need office the responsibilities President. people our remarks, seen. is tied my you that around the -- headlines really at own as and if to make really mentioned across institutions. much that with have done their the to are of they will, cabinet, all they work improvements President's within of

any seen kind although impact out we watch it, monitor really that, of it. we not so of we have And

not that happen is it concerned terribly and just those degree some between of time point, challenges initial this at when some the [indiscernible] we've something we're had because now in So of already about. But

Tobey Sommer

and How it's spectrum Several would you currently? balance you customers, And improvements can of characterize that match and of of broadened mostly can and demand spectrum then of be the performance we have or strongest shifting. that the the of quarters had demand to sort where at evolve? healthy Healthcare you've the that demand wider hospital sick how are ago, the conditions services portfolio seems complexion seeing a within

C. Hussey

are general pretty razor hear advisory, first like doing are But I'll I'd and think a if say elaborate. Yes. areas They're it's in are growth clients that expectation, thin. areas John would areas teams strategy that the of the let you in just process. that of being But there from toward their all, not they're say the the I are big some investing comments growth. as that and is the I margins things a -- we are will, proactive technology, but on a of our aggressive digital the better, are side. Those solutions, financial that their very well are definitely barbell, there's

with And yes, around reimbursement the markets, are we the challenged and still really see headwinds models just like. that systems their those competitive

leaning mix, And that systems leading been within but a healthy Healthcare. seeing really would people so there's digital you're towards into the pretty say I area as the

John Kelly

when to you look continues Tobey, the really well be it at our pipeline, Yes. From -- from market balanced. overview

that so market going offerings. pressures And driving for the for right it's teams that's that's improvement to through And of us those a our performance segment back significant that now, financial continue market robust still to demand relay our by needs Mark and that's same that of the types offerings and at right now, in a are supported also the our to data just time, we big digital see growth Yet pipeline. backlog our referred the that area.

our in related to opportunities the that business. We also pipeline of part projects a number of and see

your the point balance the and last was this this trajectory of we continue about you're beginning It way you right. asked to performance at a We improvement see things, balance question more at year. of talked about year, pipeline the -- So year. to that the this I'd say weighted

Tobey Sommer

operations, already count head quarters? fair future on opposed growth out then it digital, attached and growth, prospective head is that, that is offshore sort bag to particularly just assume count in as in your sales your the And of to to sales consummated

John Kelly

answer -- what to products largely team to have also -- question, and earlier our referred Managed India, say Services. ongoing Managed our they're that broaden the they're deployed digital based have Services those. sold, related your And To is as or been India was yes, team question and in that digital for strong team I the global already I executing in our Yes. to which is projects to would on utilization well. on our team, Digital call

Tobey Sommer

and me. margins the as the up margins last the through for that have the changes rules question getting to then does expand? the in any EBITDA mid-teens, conversion? thumb past of implications to or And of should improving the hold numerical of flow Well, context cash Or

C. Hussey

of hold rule the perspective, think should Tobey. through thumb I our from

Operator

Sutherland Bill line of The the Company. from comes question next Our Benchmark

William Sutherland

apart in maybe, not bit. I initiatives untangle, health are how a you just obviously, digital that guys demand one announced AI in take untangle, noticed taking little participating on. wanted but interested particularly increasingly to AI I are systems Mark, the ahead of projects. the

kind starting was there it I how to Anyway, of think whatever you are just doing it is much move the Cleveland. needle? of and guys

C. Hussey

as before scaling say there's some piloting them are Yes. example, the well. still in would organizations your seem in definitely amount organization. well. in ideas education, accelerating but to on seeing tremendous early areas, that many, be Bill, in point, activity, they're see innings it's across general, do and We the of research to AI we're I a as as really Education And true an the it's side many

us, see we're continues be on. in active think but it I not as markets only for of in and the education going very Commercial certainly healthcare, a We higher well. upside, activity the to lot

we marketplace, I with good we're feel So well we're the getting them. active work We're and positioned. we like as and in very think aggressive from very clients response

William Sutherland

able bench AI of terms you're in credentials? up And the build to

John Kelly

greater own scale. well. of numbers of to level engineering not -- we're higher And we're right our the -- There's we have not issue look the methodologies skills, need the but finding internally, Yes. who deep scientists, and we data using found a other an out backgrounds have types people as at also meeting AI issue going to of then we as prompt at that and people delivery

would I increasing in say, it's very and so scope pervasive, And scale.

William Sutherland

follow-up AI? my benefit actually you or to what are to margin hope on in seeing terms was see implementing degree of was That

C. Hussey

be we're of a dependent Yes. -- general to goals. -- whole We're really we it because the take to not our to able AI and not on I collectively. certainly sense concept AI, like that benefit feel automation while expand more there's can automate achieve But in it's we that things, don't lot beyond just in the from going there's but

to as And that benefit example. look for will so ahead an an ultimately think we as increasing do XXXX, become we us

William Sutherland

GG+A. housekeeping. you missed contributed? missed said, I GG+A John, is of I This -- What what couple a

John Kelly

It Bill. the was quarter, for $X.X million

William Sutherland

million. $X.X

John Kelly

Yes, correct.

William Sutherland

I'm -- just And wondering did I presented discuss interest expense what I to of then the of the next and Okay. hear the kind you size you. how could few think as second quarter? the it to about And of quarters? about what it's kind

John Kelly

second the watermark, from Bill. really is our So interest an perspective expense quarter high

think we incentives of kind March. May you the pay annual it, out If in about to

for from second So levels nice of full see, flow And the based paydown on you really debt quarter quarter. our in get can progressed. what we higher cash discussed borrowing the quarter had we some full as the you perspective, really free a a

We third and that in the quarter. continue to expect fourth trend

being more in kind that of of so of the range be should year watermark. think I high And $XX would probably [indiscernible] all-in back really the half the million the

Operator

from the Kevin [Operator next Associates. of line Barrington Instructions] Our comes question Steinke of Research

Kevin Steinke

Thanks.

To So some as specifically the imply continues Commercial. at looking the still prepared to sequential relatively have revenue Commercial you in nice XXXX, mentioned sequential to half specifically. growth guidance like outlook, remarks, full get looks that revenue in revenue to pretty year growth it your second you of flat in have

drive the would would what And pipeline that to Is correct? So so, beginning move comment on being can if of Or it currently that? some pushed that? to be Is what out? that's you that?

John Kelly

That's right, Kevin.

in pipeline to now the backlog converting year. of half it's it, hard back the the named You

commercial from I within perspective well Consulting both that's as a perspective think segment. as true the a Digital

had really advisory Consulting have teams from side distressed our So well nice a on as the conversion some perspective. financial

of entering the of during and third we're on those projects fourth higher period rate so quarter. some And a run

is have of conversions expectation [indiscernible] And as digital that slower year, cycle of we then the the up Digital well. of the on that, and sales more side pipeline X seen the delays back that we've the there side, our the half top in some on in

Kevin Steinke

growth what's And then maybe Can you Healthcare, expected increase you outlook trended that comment for a just Healthcare? better you increase year at than for helpful. the at enables expectations That's XXXX would on looking year bit full the segment. the the outset that to of that Okay. to have

John Kelly

we've we the It's been segment, been Healthcare and where demand. goes to conversation back broad-based, a and about it ago of Kevin, minutes seeing the within had that pipeline couple

I there a from of our continue from we performance in from think So some perspective, see really margin strong clients needing a to improvement help improvement demand terms perspective.

I beginning year a that, relative expectations. our think, so has of item been positive to the And

feeling Those to expected year are they customers of ago. shop, the at stronger also as probably other well. has like Digital the a relates then that side spectrum investments in the been the we and who a clients But end the and position in of were financial than on their than they're Digital stronger

of say I'd the year of So it's what of guidance a the the terms balance, story both our in versus terms in in of expectations were? then our pipeline, but improvement beginning also

Operator

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

C. Hussey

time evening. we this October look again good everyone, We quarter speaking us Have spending thanks, results. with Well, when third forward with a for our in to announce you afternoon.

Operator

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

Huron Consulting (HURN) 30 Jul 242024 Q2 Earnings call transcript