10-Q 1 hurn-20240331.htm 10-Q hurn-20240331
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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, 2024
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 Filer
Non-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 23, 2024, 18,005,790 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.


Huron Consulting Group Inc.
HURON CONSULTING GROUP INC.
INDEX



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,
2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents$18,642 $12,149 
Receivables from clients, net of allowances of $18,233 and $17,284, respectively
215,141 162,566 
Unbilled services, net of allowances of $4,675 and $5,984, respectively
173,081 190,869 
Income tax receivable9,339 6,385 
Prepaid expenses and other current assets34,755 28,491 
Total current assets450,958 400,460 
Property and equipment, net24,578 23,728 
Deferred income taxes, net2,299 2,288 
Long-term investments73,467 75,414 
Operating lease right-of-use assets22,898 24,131 
Other non-current assets100,005 92,336 
Intangible assets, net25,649 18,074 
Goodwill647,100 625,711 
Total assets$1,346,954 $1,262,142 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$13,963 $10,074 
Accrued expenses and other current liabilities36,640 33,087 
Accrued payroll and related benefits87,675 225,921 
Current maturities of long-term debt13,750  
Current maturities of operating lease liabilities11,338 11,032 
Deferred revenues24,722 22,461 
Total current liabilities188,088 302,575 
Non-current liabilities:
Deferred compensation and other liabilities38,932 35,665 
Long-term debt, net of current portion558,897 324,000 
Operating lease liabilities, net of current portion36,767 38,850 
Deferred income taxes, net28,664 28,160 
Total non-current liabilities663,260 426,675 
Commitments and contingencies
Stockholders’ equity
Common stock; $0.01 par value; 500,000,000 shares authorized; 21,237,828 and 21,316,441 shares issued, respectively
212 212 
Treasury stock, at cost, 3,061,291 and 2,852,296 shares, respectively
(159,605)(142,136)
Additional paid-in capital200,235 236,962 
Retained earnings433,033 415,027 
Accumulated other comprehensive income21,731 22,827 
Total stockholders’ equity495,606 532,892 
Total liabilities and stockholders’ equity$1,346,954 $1,262,142 
The accompanying notes are an integral part of the consolidated financial statements.
1

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,
20242023
Revenues and reimbursable expenses:
Revenues$355,961 $317,895 
Reimbursable expenses7,424 8,490 
Total revenues and reimbursable expenses363,385 326,385 
Operating expenses:
Direct costs (exclusive of depreciation and amortization included below) 253,303 228,383 
Reimbursable expenses7,584 8,624 
Selling, general and administrative expenses74,268 62,289 
Restructuring charges2,337 2,284 
Depreciation and amortization5,972 6,374 
Total operating expenses343,464 307,954 
Operating income 19,921 18,431 
Other income (expense), net:
Interest expense, net of interest income(5,140)(4,303)
Other income, net2,779 1,719 
Total other expense, net(2,361)(2,584)
Income before taxes17,560 15,847 
Income tax expense (benefit)(446)2,428 
Net income $18,006 $13,419 
Earnings per share:
Net income per basic share$0.99 $0.70 
Net income per diluted share$0.95 $0.68 
Weighted average shares used in calculating earnings per share:
Basic18,196 19,119 
Diluted18,943 19,699 
Comprehensive income (loss):
Net income $18,006 $13,419 
Foreign currency translation adjustments, net of tax(722)52 
Unrealized gain (loss) on investment, net of tax(1,447)3,873 
Unrealized gain (loss) on cash flow hedging instruments, net of tax1,073 (2,329)
Other comprehensive income (loss)(1,096)1,596 
Comprehensive income $16,910 $15,015 
The accompanying notes are an integral part of the consolidated financial statements.
2

HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share amounts)
(Unaudited)
Three Months Ended March 31,
Common StockTreasury StockAdditional
Paid-In
Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income
Stockholders’
Equity
SharesAmountSharesAmount
Balance at December 31, 202321,175,554 $212 (2,975,321)$(142,136)$236,962 $415,027 $22,827 $532,892 
Comprehensive income18,006 (1,096)16,910 
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations544,922 5 71,525 3,458 (3,463) 
Exercise of stock options21,419 — 1,167 1,167 
Purchase of business86,913 1 8,639 8,640 
Share-based compensation19,237 19,237 
Shares redeemed for employee tax withholdings(212,745)(20,927)(20,927)
Share repurchases(624,698)(6)(62,307)(62,313)
Balance at March 31, 202421,204,110 $212 (3,116,541)$(159,605)$200,235 $433,033 $21,731 $495,606 
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 
Issuance of common stock in connection with:
Restricted stock awards, net of cancellations297,581 3 118,449 5,732 (5,735) 
Exercise of stock options14,145 — 627 627 
Share-based compensation15,089 15,089 
Shares redeemed for employee tax withholdings(135,420)(9,529)(9,529)
Share repurchases(632,894)(6)(44,267)(44,273)
Balance at March 31, 202321,910,425 $220 (2,970,118)$(141,353)$284,420 $365,967 $19,715 $528,969 
The accompanying notes are an integral part of the consolidated financial statements.
3

HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
20242023
Cash flows from operating activities:
Net income$18,006 $13,419 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization5,972 6,407 
Non-cash lease expense1,544 1,644 
Lease-related impairment charges849 1,870 
Share-based compensation13,949 11,562 
Amortization of debt discount and issuance costs223 191 
Allowances for doubtful accounts16 3 
Deferred income taxes602  
(Gain) loss on sale of property and equipment, excluding transaction costs 1 
Change in fair value of contingent consideration liabilities516 435 
Changes in operating assets and liabilities, net of acquisitions and divestiture:
(Increase) decrease in receivables from clients, net(51,116)827 
(Increase) decrease in unbilled services, net18,097 (31,669)
(Increase) decrease in current income tax receivable / payable, net(3,363)1,487 
(Increase) decrease in other assets(5,008)(5,205)
Increase (decrease) in accounts payable and other liabilities4,437 (1,881)
Increase (decrease) in accrued payroll and related benefits(132,290)(89,843)
Increase (decrease) in deferred revenues(3,158)(1,349)
Net cash used in operating activities(130,724)(92,101)
Cash flows from investing activities:
Purchases of property and equipment(1,192)(1,956)
Investment in life insurance policies(806)(1,833)
Purchases of businesses(21,150)38 
Capitalization of internally developed software costs(7,605)(6,575)
Proceeds from note receivable154 154 
Net cash used in investing activities(30,599)(10,172)
Cash flows from financing activities:
Proceeds from exercises of stock options1,167 627 
Shares redeemed for employee tax withholdings(20,927)(9,529)
Share repurchases(60,998)(45,133)
Proceeds from bank borrowings566,000 201,000 
Repayments of bank borrowings(316,000)(44,000)
Payments for debt issuance costs(1,383)(16)
Deferred payments on business acquisition (500)
Net cash provided by financing activities167,859 102,449 
Effect of exchange rate changes on cash(43)16 
Net increase in cash and cash equivalents6,493 192 
Cash and cash equivalents at beginning of the period12,149 11,834 
Cash and cash equivalents at end of the period$18,642 $12,026 
Supplemental disclosure of cash flow information:
Non-cash investing and financing activities:
Property and equipment expenditures and capitalized software included in current liabilities$6,147 $4,062 
Operating lease right-of-use assets obtained in exchange for operating lease liabilities$1,073 $748 
Common stock issued related to purchase of business$8,640 $ 
Contingent consideration accrued related to purchases of businesses
$36 $ 
Share repurchases included in current liabilities$2,228 $ 
Excise tax on net share repurchases included in current and non-current liabilities$1,064 $247 
    The accompanying notes are an integral part of the consolidated financial statements.
4


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, including 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, which align our business by industry. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities. We also provide revenue reporting across two principal capabilities: i) Consulting and Managed Services and ii) Digital, which are methods by which we deliver our services and products.
See Note 14 “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 months ended March 31, 2024 and 2023. 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, 2023. Our results for any interim period are not necessarily indicative of results for a full year or any other interim period.
3. New Accounting Pronouncements
Not Yet Adopted
On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates the segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis. ASU 2023-07 will be effective for our annual reporting periods beginning with the current fiscal year ending December 31, 2024 and for interim reporting periods beginning in fiscal year 2025, with early adoption permitted, and is required to be applied retrospectively. We are currently evaluating the impact this guidance will have on our disclosures within our consolidated financial statements.
On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which updates annual income tax disclosures by requiring disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 will be effective for our annual reporting periods beginning with the fiscal year ending December 31, 2024, with early adoption permitted, and is required to be applied prospectively with the option of retrospective application. We are currently evaluating the impact this guidance will have on our disclosures within our consolidated financial statements.
On March 6, 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors, which will require registrants to disclose certain climate-related information in registration statements and annual reports. The disclosure requirements will be effective for our annual reporting periods beginning with the fiscal year ending December 31, 2025, subject to any delay which may result from the current administrative stay issued by the SEC. We are currently evaluating the impact this guidance will have on our disclosures within our consolidated financial statements.
5


HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
4. Goodwill and Intangible Assets
Goodwill
The table below sets forth the changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2024.

Healthcare
EducationCommercialTotal
Balance as of December 31, 2023:
Goodwill$644,983 $123,652 $312,968 $1,081,603 
Accumulated impairment losses(190,024)(1,417)(264,451)(455,892)
Goodwill, net as of December 31, 2023$454,959 $122,235 $48,517 $625,711 
Goodwill recorded in connection with business acquisitions
 21,313 76 21,389 
Goodwill, net as of March 31, 2024$454,959 $143,548 $48,593 $647,100 
First Quarter 2024 Acquisitions
On January 1, 2024, we completed the acquisition of the data analytics services team of Vlamis Software Solutions, Inc. (“Vlamis”). The results of operations of Vlamis are included within our consolidated financial statements as of the acquisition date and allocated among our Education and Commercial segments based on the engagements delivered by the business.
On March 1, 2024, we completed the acquisition of Grenzebach Glier and Associates, Inc. (“GG+A”), a philanthropic management consulting firm that helps education institutions and other nonprofit organizations build and accelerate the philanthropic programs that support their mission. The results of operations of GG+A are included within our consolidated financial statements and results of operations of our Education segment as of the acquisition date.
The acquisitions of Vlamis and GG+A are not significant to our consolidated financial statements individually or in the aggregate as of and for the three months ended March 31, 2024. These acquisitions were accounted for using the acquisition method of accounting. Contract assets and contract liabilities are recorded at their carrying value under Topic 606: Revenue from Contracts with Customers.
The current acquisition date values of assets acquired and liabilities assumed of the GG+A acquisition are considered preliminary and are based on the information that was available as of the date of the acquisition. We believe that the information provides a reasonable basis for estimating the preliminary values of assets acquired and liabilities assumed but certain items, such as the valuations of the intangible assets and the working capital adjustments, among other things, may be subject to change as additional information is received. Thus, the provisional measurements of assets acquired, including goodwill, and liabilities assumed related to the GG+A acquisition are subject to change. We expect to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.
Intangible Assets
Intangible assets as of March 31, 2024 and December 31, 2023 consisted of the following:
As of March 31, 2024As of December 31, 2023
Useful Life 
(in years)
Gross
Carrying
Amount
Accumulated
Amortization
Gross
Carrying
Amount
Accumulated
Amortization
Customer relationships
5 to 10
$26,536 $7,477 $60,636 $48,928 
Technology and software
2 to 5
16,230 10,839 16,230 10,195 
Trade names66,000 6,000 6,000 6,000 
Non-competition agreements
3 to 5
950 432 720 389 
Customer contracts
1 to 3
735 54   
Total$50,451 $24,802 $83,586 $65,512 
Identifiable intangible assets with finite lives are amortized over their estimated useful lives using either an accelerated or straight-line basis to correspond to the cash flows expected to be derived from the assets.
6


HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
Intangible asset amortization expense was $1.7 million and $2.2 million for the three months ended March 31, 2024 and 2023, respectively. The table below sets forth the estimated annual amortization expense for the intangible assets recorded as of March 31, 2024.
Year Ending December 31,Estimated Amortization Expense
2024$6,509 
2025$6,686 
2026$4,965 
2027$3,550 
2028$2,604 
Actual future amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, and other factors.
5. Revenues
For the three months ended March 31, 2024 and 2023, we recognized revenues of $356.0 million and $317.9 million, respectively. Of the $356.0 million recognized in the first quarter of 2024, we recognized revenues of $8.3 million from obligations satisfied, or partially satisfied, in prior periods, of which $7.5 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements and $0.8 million was due to the release of allowances on receivables from clients and unbilled services. Of the $317.9 million recognized in the first quarter of 2023, we recognized revenues of $1.2 million from obligations satisfied, or partially satisfied, in prior periods due to the release of allowances on receivables from clients and unbilled services. During the first quarter of 2023, we also recognized a $2.5 million decrease to revenues due to changes in the estimates of our variable consideration under performance-based billing arrangements.
As of March 31, 2024, we had $221.3 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 $221.3 million of performance obligations, we expect to recognize $65.7 million as revenue in 2024, $58.6 million in 2025, and the remaining $97.0 million thereafter. Actual revenue recognition could differ from these amounts as a result of changes in the 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, 2024 and December 31, 2023 was $56.6 million and $70.1 million, respectively. The $13.5 million decrease 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, 2024 and December 31, 2023 was $24.7 million and $22.5 million, respectively. The $2.2 million increase reflects the deferred revenue assumed in the acquisition of GG+A, partially offset by timing differences between client payments in accordance with their contract terms and the completion of our performance obligations. For the three months ended March 31, 2024, $15.4 million of revenues recognized were included in the deferred revenue balance as of December 31, 2023.
7


HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
6. 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,
 20242023
Net income$18,006 $13,419 
Weighted average common shares outstanding – basic18,196 19,119 
Weighted average common stock equivalents747 580 
Weighted average common shares outstanding – diluted18,943 19,699 
Net income per basic share$0.99 $0.70 
Net income per diluted share$0.95 $0.68 
Less than 0.1 million shares related to unvested restricted stock and outstanding common stock options were excluded from the computation of the weighted average common stock equivalents presented above for the three months ended March 31, 2023 as they were anti-dilutive. There were no anti-dilutive securities for the three months ended March 31, 2024.
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.The share repurchase program has been subsequently extended and increased, most recently in the fourth quarter of 2023. The current authorization extends the share repurchase program through December 31, 2024 with a repurchase amount of $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.
In the three months ended March 31, 2024, we repurchased and retired 624,698 shares for $62.3 million, which includes 23,000 shares for $2.2 million which settled in the second quarter of 2024 and a $0.1 million accrual for excise taxes on the net share repurchases. Additionally, in the three months ended March 31, 2024 we settled the repurchase of 10,000 shares for $1.0 million which were accrued as of December 31, 2023.
In the three months ended March 31, 2023, we repurchased and retired 632,894 shares for $44.3 million, which includes a $0.2 million accrual for excise taxes on the net share repurchases. Additionally, in the three months ended March 31, 2023 we settled the repurchase of 15,200 shares for $1.1 million which were accrued as of December 31, 2022.
As of March 31, 2024, $24.0 million remained available for share repurchases under our share repurchase program.
8


HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
7. Financing Arrangements
The Company has a $600 million senior secured revolving credit facility (the “Revolver”) and a $275 million senior secured term loan facility (the “Term Loan”), subject to the terms of the Third Amended and Restated Credit Agreement dated as of November 15, 2022 (as amended, the “Amended Credit Agreement”), both of which fully mature on November 15, 2027. The Term Loan was established in February 2024 with the execution of Amendment No. 2 to the Third Amended and Restated Credit Agreement. The Term Loan is subject to scheduled quarterly amortization payments of $3.4 million beginning June 30, 2024 through the maturity date of November 15, 2027, at which time the outstanding principal balance and all accrued interest will be due.
As of March 31, 2024, we had total borrowings outstanding under our Amended Credit Agreement of $574.0 million, consisting of $299.0 million outstanding under the Revolver and $275.0 million outstanding under the Term Loan. A summary of the scheduled maturities of those borrowings follows:
Scheduled Maturities of Long-Term Debt
2024$10,312 
2025$13,750 
2026$13,750 
2027$536,188 
The initial borrowings under the Revolver were used to refinance borrowings outstanding under a prior credit agreement, and future borrowings under the Revolver may be used for working capital, capital expenditures, share repurchases, permitted acquisitions, and other general corporate purposes. The proceeds of the Term Loan were used to reduce borrowings under the Revolver.
The Amended Credit Agreement provides the option to increase the revolving credit facility or establish additional 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 $1.13 billion.
Fees and interest on borrowings under the Amended Credit Agreement vary based on our Consolidated Leverage Ratio (as defined in the Amended Credit Agreement). At our option, these borrowings will bear interest at one, three or six month Term SOFR or, in the case of the Revolver, an alternate base rate, in each case plus the applicable margin. The applicable margin for borrowings under the Revolver 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. The applicable margin for the outstanding principal under the Term Loan will range between 1.625% per annum and 2.375% per annum based upon our Consolidated Leverage Ratio at such time. The fees and interest are subject to further adjustment based upon the Company's performance against specified key performance indicators related 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 Amended Credit Agreement), 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.
9


HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
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, 2024, we were in compliance with these financial covenants with a Consolidated Leverage Ratio of 2.74 to 1.00 and a Consolidated Interest Coverage Ratio of 10.65 to 1.00.
A summary of the carrying amounts of our debt follows:
March 31,
2024
December 31,
2023
Revolver
$299,000 $324,000 
Term Loan
275,000  
Unamortized debt issuance costs - Term Loan1
(1,353) 
Total long-term debt572,647 324,000 
Current maturities of long-term debt
(13,750) 
Long-term debt, net of current portion$558,897 $324,000 
(1)In connection with establishing the Term Loan, we incurred $1.4 million of debt issuance costs which were recognized as a discount to the Term Loan. These debt issuance costs are amortized to interest expense using an effective interest rate of 7.34% over the term of the Term Loan. Unamortized debt issuance costs related to the Revolver are included as a component of other non-current assets and amortized to interest expense using the straight-line method over the term of the Revolver.
Borrowings outstanding under the Amended Credit Agreement as of March 31, 2024 and December 31, 2023 carried a weighted average interest rate of 5.4% and 4.2%, respectively, including the effect of the interest rate swaps described in Note 9 “Derivative Instruments and Hedging Activity.”
The borrowing capacity under the Revolver is reduced by any outstanding borrowings under the Revolver and outstanding letters of credit. At March 31, 2024, we had outstanding letters of credit totaling $0.6 million, which are used as security deposits for our office facilities. As of March 31, 2024, the unused borrowing capacity under the Revolver was $300.4 million.
8. Restructuring Charges
Restructuring charges were $2.3 million for the three months ended March 31, 2024, which included $1.0 million of severance-related expenses; $0.8 million related to non-cash lease impairment charges driven by updated sublease assumptions for our previously vacated office spaces; and $0.5 million of rent and related expenses, net of sublease income, for previously vacated office spaces.
Restructuring charges were $2.3 million for the three months ended March 31, 2023. In the first quarter of 2023, we exited our office space in Hillsboro, Oregon which resulted in a $1.9 million non-cash impairment charge on the related fixed assets and right-of-use operating lease asset of that office space. Additionally, in the first quarter of 2023, we recognized $0.4 million of additional restructuring expense for rent and related expenses, net of sublease income, for previously vacated office spaces.
10


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 value of our restructuring charge liability by restructuring type for the three months ended March 31, 2024.
Employee CostsOther Total
Balance as of December 31, 2023$1,366 $535 $1,901 
Additions991  991 
Payments(832) (832)
Adjustments
(8)13 5 
Balance as of March 31, 2024$1,517 $548 $2,065 
All of the $1.5 million restructuring charge liability related to employee costs at March 31, 2024 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, 2024, which primarily relates to the early termination of a contract, 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.
9. 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 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 $300.0 million and $250.0 million as of March 31, 2024 and December 31, 2023, 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 January 31, 2029.
As of March 31, 2024, it was anticipated that $5.7 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 31, 2024. As of March 31, 2024 and December 31, 2023, the aggregate notional amounts of these contracts were INR 878.0 million, or $10.5 million, and INR 1,375.7 million, or $16.6 million, respectively, based on the exchange rates in effect as of each period end.
As of March 31, 2024, it was anticipated that the less than $0.1 million of losses, net of tax, related to foreign exchange forward contracts currently recorded in accumulated other comprehensive income will be reclassified into earnings in our consolidated statement of operations within the next 12 months.
11


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, 2024 and December 31, 2023.
Derivative InstrumentBalance Sheet LocationMarch 31,
2024
December 31,
2023
Interest rate swapsPrepaid expenses and other current assets$7,481 $6,655 
Interest rate swapsOther non-current assets1,231 891 
Foreign exchange forward contractsPrepaid expenses and other current assets13  
Total Assets$8,725 $7,546 
Interest rate swapsDeferred compensation and other liabilities$80 $307 
Foreign exchange forward contractsAccrued expenses and other current liabilities23 70 
Total Liabilities$103 $377 
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 11 “Other Comprehensive Income (Loss)” for additional information on our derivative instruments.
10. 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 Inputs
Quoted 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.
12


HURON CONSULTING GROUP INC.
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, 2024 and December 31, 2023.
Level 1Level 2Level 3Total
March 31, 2024
Assets:
Interest rate swaps$— $8,712 $— $8,712 
Convertible debt investment— — 66,099 66,099 
Foreign exchange forward contracts— 13 — 13 
Deferred compensation assets— 37,931 — 37,931 
Total assets$— $46,656 $66,099 $112,755 
Liabilities:
Interest rate swaps$— $80 $— $80 
Foreign exchange forward contracts— 23 — 23 
Contingent consideration for business acquisitions— — 2,626 2,626 
Total liabilities$— $103 $2,626 $2,729 
December 31, 2023
Assets:
Interest rate swaps$— $7,546 $— $7,546 
Convertible debt investment— — 68,046 68,046 
Deferred compensation assets— 34,826 — 34,826 
Total assets$— $42,372 $68,046 $110,418 
Liabilities:
Interest rate swaps$— $307 $— $307 
Foreign exchange forward contracts— 70 — 70 
Contingent consideration for business acquisitions— — 2,074 2,074 
Total liabilities$— $377 $2,074 $2,451 
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 9 “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 utilizing market-based inputs, including both forward and spot prices, and a discount rate reflecting the risks involved. Refer to Note 9 “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.
13


HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
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 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 for the valuations performed as of March 31, 2024 and December 31, 2023; 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 24.5% as of both March 31, 2024 and December 31, 2023; and the concluded equity volatility of 40.0% and 35.0% as of March 31, 2024 and December 31, 2023, 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 table below sets forth the changes in the balance of the convertible debt investment for the three months ended March 31, 2024.
Convertible Debt Investment
Balance as of December 31, 2023$68,046 
Change in fair value(1,947)
Balance as of March 31, 2024$66,099 
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 6.3% as of both March 31, 2024 and December 31, 2023. 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 to selling, general and administrative expenses 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.
The table below sets forth the changes in the balance of the contingent consideration for business acquisitions for the three months ended March 31, 2024.
Contingent Consideration for Business Acquisitions
Balance as of December 31, 2023
$2,074 
Acquisition36 
Change in fair value516 
Balance as of March 31, 2024
$2,626 
Financial assets and liabilities not recorded at fair value on a recurring basis are as follows:
Preferred Stock Investment
In the fourth quarter of 2019, we invested $5.0 million in 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 the company 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,
14


HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
we concluded the appropriate accounting treatment for our investment 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, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same company. On a quarterly basis, we review the information available to determine whether an orderly and observable transaction for the same or similar equity instrument occurred or if factors indicate that a significant decrease in value has occurred. We remeasure to the fair value of the preferred stock using such identified information with changes in the fair value recorded in our consolidated statement of operations.
During the first three months of 2024 and 2023, there were no observable price changes or impairments of our preferred stock investment. Since our initial investment, we have recognized cumulative unrealized gains of $28.6 million and cumulative unrealized losses of $26.3 million. As of March 31, 2024 and December 31, 2023, the carrying value of our preferred stock investment was $7.4 million.
Senior Secured Credit Facility
The carrying value of our borrowings outstanding under our senior secured credit facility is stated at cost. Our carrying value approximates fair value, using Level 2 inputs, as the senior secured credit facility bears interest at variable rates based on current market rates as set forth in the Amended Credit Agreement. Refer to Note 7 “Financing Arrangements” for additional information on our senior secured credit facility.
Cash and Cash Equivalents and Other Financial Instruments
Cash and cash equivalents are stated at cost, which approximates fair market value. The carrying values of all other financial instruments not described above reasonably approximate fair market value due to the nature of the financial instruments and the short-term maturity of these items.
11. Other Comprehensive Income (Loss)
The table below sets forth the components of other comprehensive income (loss), net of tax, for the three months ended March 31, 2024 and 2023.
Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2023
Before
Taxes
Tax
(Expense)
Benefit
Net of
Taxes
Before
Taxes
Tax
(Expense)
Benefit
Net of
Taxes
Foreign currency translation adjustments$(722)$ $(722)$52 $ $52 
Unrealized gain (loss) on investment$(1,947)$500 $(1,447)$5,279 $(1,406)$3,873 
Interest rate swaps:
Change in fair value$3,678 $(960)$2,718 $(1,807)$481 $(1,326)
Reclassification adjustments into earnings(2,285)596 (1,689)(1,532)407 (1,125)
Net unrealized gain (loss) on interest rate swaps$1,393 $(364)$1,029 $(3,339)$888 $(2,451)
Foreign exchange forward contracts:
Change in fair value$46 $(12)$34 $154 $(41)$113 
Reclassification adjustments into earnings14 (4)10 12 (3)9 
Net unrealized gain (loss) on foreign exchange forward contracts$60 $(16)$44 $166 $(44)$122 
Other comprehensive income (loss)$(1,216)$120 $(1,096)$2,158 $(562)$1,596 
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, on our consolidated statement of operations. The related tax amounts reclassified from accumulated other comprehensive income are recorded to income tax expense (benefit) on our consolidated statement of operations. Refer to Note 9 “Derivative Instruments and Hedging Activity” 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)
Accumulated other comprehensive income, net of tax, includes the following components: 
Cash Flow Hedges
Foreign Currency TranslationAvailable-for-Sale InvestmentInterest Rate SwapsForeign Exchange Forward ContractsTotal
Balance as of December 31, 2023$(2,521)$20,039 $5,361 $(52)$22,827 
Current period change(722)(1,447)1,029 44 (1,096)
Balance as of March 31, 2024$(3,243)$18,592 $6,390 $(8)$21,731 
12. Income Taxes
For the three months ended March 31, 2024, our effective tax rate was (2.5)% as we recognized an income tax benefit of $0.4 million on income of $17.6 million. The effective tax rate of (2.5)% was more favorable than the statutory rate, inclusive of state income taxes, of 26.1%, primarily due to a discrete tax benefit for share-based compensation awards that vested during the quarter.
For the three months ended March 31, 2023, our effective tax rate was 15.3% as we recognized income tax expense of $2.4 million on income of $15.8 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.
13. 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 $0.5 million were outstanding at March 31, 2024 and December 31, 2023, 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, 2024 and December 31, 2023, the total estimated fair value of our outstanding contingent consideration liability was $2.6 million and $2.1 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, 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.
14. 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 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; the federal health system; and public, children’s and critical access hospitals, and non-acute care
16


HURON CONSULTING GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in thousands, except per share amounts)
(Unaudited)
providers, including physician practices and medical groups; payors; and long-term care or post-acute providers. Our healthcare-focused services and products include financial and operational performance improvement consulting, which spans revenue cycle, cost and care delivery transformation; digital offerings, spanning technology and analytic-related services, including enterprise health record (“EHR”), enterprise resource planning (“ERP”) and enterprise performance management (“EPM”), customer relationship management (“CRM”), data management and technology managed services, and a portfolio of software products; organizational transformation; revenue cycle managed services and outsourcing; financial and capital advisory consulting; and strategy and innovation consulting.
Education
Our Education segment serves public and private colleges and universities, research institutes and other education-related organizations. Our education and research-focused services and products include our digital offerings, spanning technology and analytic-related services, including student information systems, ERP and EPM, CRM, data management and technology managed services and our Huron Research Suite product suite (the leading software suite designed to facilitate and improve research administration service delivery and compliance); our research-focused consulting and managed services; and our strategy and operations consulting services, which span finance, accounting, operations and philanthropy functions, organization and talent strategy, and student and academic strategy.
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, financial advisory (special situation advisory and corporate finance advisory) services, and strategy and innovation consulting services.
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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HURON CONSULTING GROUP INC.
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 months ended March 31, 2024 and 2023, 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,
20242023
Healthcare:
Revenues$180,742 $149,049 
Operating income$42,694 $32,255 
Segment operating income as a percentage of segment revenues23.6 %21.6 %
Education:
Revenues$111,583 $104,147 
Operating income$21,956 $23,165 
Segment operating income as a percentage of segment revenues19.7 %22.2 %
Commercial:
Revenues$63,636 $64,699 
Operating income$14,039 $14,067 
Segment operating income as a percentage of segment revenues22.1 %21.7 %
Total Huron:
Revenues$355,961 $317,895 
Reimbursable expenses7,424 8,490 
Total revenues and reimbursable expenses$363,385 $326,385 
Segment operating income$78,689 $69,487 
Items not allocated at the segment level:
Other operating expenses52,507 44,056 
Restructuring charges
2,233 2,284 
Depreciation and amortization4,028 4,716 
Operating income19,921 18,431 
Other expense, net(2,361)(2,584)
Income before taxes$17,560 $15,847 
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HURON CONSULTING GROUP INC.
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 months ended March 31, 2024 and 2023.
Three Months Ended
March 31,
Revenues by Capability20242023
Healthcare:
Consulting and Managed Services$124,211 $101,736 
Digital56,531 47,313 
Total revenues$180,742 $149,049 
Education:
Consulting and Managed Services$55,109 $53,227 
Digital56,474 50,920 
Total revenues$111,583 $104,147 
Commercial:
Consulting and Managed Services$22,239 $22,231 
Digital41,397 42,468 
Total revenues$63,636 $64,699 
Total Huron:
Consulting and Managed Services$201,559 $177,194 
Digital154,402 140,701 
Total revenues$355,961 $317,895 
For the three months ended March 31, 2024 and 2023, substantially all of our revenues were recognized over time. During the three months ended March 31, 2024 and 2023, no single client generated greater than 10% of our consolidated revenues. At March 31, 2024, one client in our Healthcare segment accounted for 11.9% of our combined receivable from clients, net and unbilled services, net balance as a result of outstanding invoices due in the normal course of the contract payment terms. At December 31, 2023, no single client accounted for greater than 10% of our combined balance of receivables from clients, net and unbilled services, net.
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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, 2023 that may cause actual results, levels of activity, performance or achievements to be materially different from any anticipated results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. 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
Huron is a global professional services firm that partners with clients to develop growth strategies, optimize operations and accelerate digital transformation, including 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.
OUR STRATEGY
The combination of our deep industry expertise and breadth of our offerings is the foundation of our growth strategy and why our clients choose Huron as their trusted advisor. Key focus areas of our growth strategy include:
Accelerating Growth in Healthcare and Education: Huron has leading market positions in healthcare and education, providing comprehensive offerings to the largest health systems, academic medical centers, colleges and universities, and research institutes in the United States.
Growing Presence in Commercial Industries: Huron’s commercial industry focus has increased the diversification of the Company’s portfolio and end markets while expanding the range of capabilities it can deliver to clients, providing new avenues for growth and an important balance to its healthcare and education focus.
Rapidly Growing Global Digital Capability: Huron’s ability to provide a broad portfolio of digital offerings that support the strategic and operational needs of its clients is at the foundation of the Company’s strategy. Huron will continue to advance its integrated digital platform to support its strong growth trajectory.
Solid Foundation for Margin Expansion: The Company is well-positioned to achieve consistent margin expansion as well as strong annual adjusted diluted earnings per share growth. We are committed to operating income margin expansion by growing the areas of the business that provide the most attractive returns, improving the operational efficiency of our delivery for clients, and scaling our selling, general, and administrative expenses as we grow.
Strong Balance Sheet and Cash Flows: Strong free cash flows have and will continue to be a hallmark of Huron’s financial strength and business model. The Company is committed to deploying capital in a strategic and balanced way, including returning capital to shareholders and executing strategic, tuck-in acquisitions.
OUR SERVICES AND PRODUCTS
We provide our services and products and manage our business under three operating segments: Healthcare, Education, and Commercial. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities. We also provide revenue reporting across two principal capabilities: i) Consulting and Managed Services and ii) Digital, which are methods by which we deliver our services and products.
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Operating Industries
Healthcare
Our Healthcare segment serves acute care providers, including national and regional health systems; academic health systems; community health systems; the federal health system; 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-focused services and products include financial and operational performance improvement consulting, which spans revenue cycle, cost and care delivery transformation; digital offerings, spanning technology and analytic-related services, including enterprise health record (“EHR”), enterprise resource planning (“ERP”) and enterprise performance management (“EPM”), customer relationship management (“CRM”), data management and technology managed services, and a portfolio of software products; organizational transformation; revenue cycle managed services and outsourcing; financial and capital advisory consulting; and strategy and innovation consulting.
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 and research-focused services and products include our digital offerings, spanning technology and analytic-related services, including student information systems, ERP and EPM, CRM, data management and technology managed services and our Huron Research Suite product suite (the leading software suite designed to facilitate and improve research administration service delivery and compliance); our research-focused consulting and managed services; and our strategy and operations consulting services, which span finance, accounting, operations and philanthropy functions, organization and talent strategy, and student and academic strategy. We continue to broaden our offerings into new areas. Most recently, we expanded our research managed services, advancement, campus health and well-being, and athletics offerings.
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, financial advisory (special situation advisory and corporate finance advisory) services, and strategy and innovation consulting services.
Capabilities
Within each of our operating segments, we provide our offerings 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 managed services and outsourcing at our healthcare and education and research-focused clients, where our projects are often coupled with our digital services and product offerings and management consulting services to sustain improved performance.
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 invested organically and inorganically to expand our Digital offerings, which now span beyond traditional ERP implementations into a broader set of administrative systems, industry-specific systems of record and systems of engagement that act
21

as the “digital front door” to an organization. We also have grown our data, analytics and automation offerings to deliver a unified and actionable technology ecosystem for our clients.
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.
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.
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.
Time-and-expense: Under time-and-expense billing arrangements, we invoice our clients 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 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 fixed-fee or time-and-expense 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 our cloud-based analytic tools and solutions. 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.
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 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
22

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 are 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 Results
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. 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.
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 were 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), net: We exclude the effects of other losses and 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 and other corporate costs incurred directly related to the evaluation and/or consummation of business acquisitions.
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 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 culture and organizational 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 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 working 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 first quarter of 2024 include:
Total revenues increased 12.0% to $356.0 million for the first quarter of 2024 from $317.9 million for the first quarter of 2023.
For the first three months of 2024, Healthcare segment revenues increased 21.3% compared to the first three months of 2023.
Diluted EPS increased 39.7% to $0.95 for the first quarter of 2024, compared to $0.68 for the first quarter of 2023.
Adjusted diluted EPS increased 41.4% to $1.23 for the first quarter of 2024, compared to $0.87 for the first quarter of 2023.
Returned $62.3 million to shareholders in the first three months of 2024 by repurchasing 624,698 shares of our common stock.
On March 1, 2024, we completed the acquisition of GG+A, a philanthropic management consulting firm that helps education institutions and other nonprofit organizations build and accelerate the philanthropic programs that support their mission.
Total revenues increased $38.1 million, or 12.0%, to $356.0 million for the first quarter of 2024 from $317.9 million for the first quarter of 2023. The increase in revenues was driven by continued strength in demand for Healthcare's Consulting and Managed Services and Digital capabilities, as well as an increase in demand for Education's Digital capability. These increases in revenues reflect our focus on accelerating growth in our healthcare and education industries.
In our Consulting and Managed Services capability, revenues for the first quarter of 2024 increased 13.8%, compared to the first quarter of 2023, and reflected strengthened demand in our Healthcare and Education segments. The utilization rate within our Consulting capability decreased to 70.2% in the first quarter of 2024, compared to 76.3% in the first quarter of 2023.
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Revenues within our Digital capability increased 9.7% in the first quarter of 2024, compared to the first quarter of 2023, and reflected strengthened demand in our Healthcare and Education and segments. The utilization rate within our Digital capability increased to 74.3% in the first quarter of 2024, compared to 71.0% in the first quarter of 2023.
The total number of revenue-generating professionals increased 15.8% to 5,803 as of March 31, 2024, compared to 5,013 as of March 31, 2023, as a result of hiring to support the overall increase in demand for our services, and includes approximately 70 hires as a result of our acquisition of GG+A. 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 increased $4.6 million, or 34.2%, to $18.0 million for the three months ended March 31, 2024 from $13.4 million for the same period last year. As a result of the increase in net income, diluted earnings per share for the first quarter of 2024 increased 39.7% to $0.95, compared to $0.68 for the first quarter of 2023. Adjusted diluted earnings per share increased 41.4% to $1.23 for the first quarter of 2024, compared to $0.87 for the first quarter of 2023.
In the first three months of 2024, we deployed $62.3 million of capital to repurchase 624,698 shares of our common stock, representing 3.4% of our common stock outstanding as of December 31, 2023.
On March 1, 2024, we completed the acquisition of GG+A, a philanthropic management consulting firm that helps education institutions and other nonprofit organizations build and accelerate the philanthropic programs that support their mission.
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):
Three Months Ended
March 31,
20242023
Healthcare:
Revenues$180,742 $149,049 
Operating income$42,694 $32,255 
Segment operating income as a percentage of segment revenues23.6 %21.6 %
Education:
Revenues$111,583 $104,147 
Operating income$21,956 $23,165 
Segment operating income as a percentage of segment revenues19.7 %22.2 %
Commercial:
Revenues$63,636 $64,699 
Operating income$14,039 $14,067 
Segment operating income as a percentage of segment revenues22.1 %21.7 %
Total Huron:
Revenues$355,961 $317,895 
Reimbursable expenses7,424 8,490 
Total revenues and reimbursable expenses$363,385 $326,385 
Segment operating income$78,689 $69,487 
Items not allocated at the segment level:
Other operating expenses52,507 44,056 
Restructuring charges2,233 2,284 
Depreciation and amortization4,028 4,716 
Operating income19,921 18,431 
Other expense, net(2,361)(2,584)
Income before taxes17,560 15,847 
Income tax expense (benefit)(446)2,428 
Net income$18,006 $13,419 
Earnings per share:
Basic$0.99 $0.70 
Diluted$0.95 $0.68 
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Segment and Consolidated Operating Results
(in thousands, except per share amounts):
Three Months Ended
March 31,
20242023
Other Operating Data:
Number of revenue-generating professionals by segment (at period end)(1):
Healthcare2,279 1,780 
Education1,231 1,069 
Commercial (2)
2,293 2,164 
Total5,803 5,013 
Revenue by capability:
Consulting and Managed Services (3)(4)
$201,559 $177,194 
Digital154,402 140,701 
Total$355,961 $317,895 
Number of revenue-generating professionals by capability (at period end):
Consulting and Managed Services (3)(5)
2,891 2,360 
Digital2,912 2,653 
Total5,803 5,013 
Utilization rate by capability (6):
Consulting70.2 %76.3 %
Digital74.3 %71.0 %
(1)During the first quarter of 2024, we reclassified certain revenue-generating professionals within our Digital capability from our Healthcare and Education segments to our Commercial segment as these professionals are able to provide services across all of our industries. This reclassification did not impact the total Digital capability headcount for any period. The prior period headcount has been revised for consistent presentation.
(2)The majority of our revenue-generating professionals within our Commercial segment can provide services across all of our industries, including healthcare and education, and the related costs of these professionals are allocated to each of the segments.
(3)During the first quarter of 2024, we reclassified one of the offerings within Education's Consulting capability to Education's Managed Services capability. Revenues generated by this offering during the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023 were $2.8 million, $2.2 million, $2.4 million, and $2.7 million, respectively, and during the years ended December 31, 2022 and 2023 were $15.0 million and $10.1 million, respectively. The number of revenue-generating professionals within this offering as of December 31, 2022, March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023 were 54, 24, 24, 24 and 23, respectively.
This reclassification did not impact the aggregate revenues or headcount reported for the Education Consulting and Managed Services capability for any period, and the prior period Education Managed Services capability revenues and headcount in the following footnotes have been revised for consistent presentation.
(4)Managed Services capability revenues within our Healthcare segment was $17.5 million and $19.8 million for the three months ended March 31, 2024 and 2023, respectively.
Managed Services capability revenues within our Education segment was $7.4 million for both the three months ended March 31, 2024 and 2023.
(5)The number of Managed Services revenue-generating professionals within our Healthcare segment was 1,087 and 726 as of March 31, 2024 and 2023, respectively.
The number of Managed Services revenue-generating professionals within our Education segment was 132 and 125 as of March 31, 2024 and 2023, respectively.
(6)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,
 20242023
Revenues$355,961 $317,895 
Net income$18,006 $13,419 
Add back:
Income tax expense (benefit)(446)2,428 
Interest expense, net of interest income5,140 4,303 
Depreciation and amortization6,181 6,553 
EBITDA28,881 26,703 
Add back:
Restructuring charges2,337 2,284 
Other losses1,568 435 
Transaction-related expenses1,497 — 
Foreign currency transaction losses (gains), net(465)80 
Adjusted EBITDA$33,818 $29,502 
Adjusted EBITDA as a percentage of revenues9.5 %9.3 %
Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted Earnings per Share
Three Months Ended
March 31,
 20242023
Net income$18,006 $13,419 
Weighted average shares - diluted18,943 19,699 
Diluted earnings per share$0.95 $0.68 
Add back:
Amortization of intangible assets1,690 2,231 
Restructuring charges2,337 2,284 
Other losses1,568 435 
Transaction-related expenses1,497 — 
Tax effect of adjustments(1,844)(1,312)
Total adjustments, net of tax5,248 3,638 
Adjusted net income$23,254 $17,057 
Adjusted weighted average shares - diluted18,943 19,699 
Adjusted diluted earnings per share$1.23 $0.87