Huron narrows 2025 revenue guidance to $1.65B-$1.67B while boosting EPS outlook amid record healthcare and commercial growth

Earnings Call Insights: Huron Consulting Group Inc. (HURN) Q3 2025

MANAGEMENT VIEW

* CEO C. Hussey highlighted, "Our third quarter performance was strong, driven by growth across all 3 operating segments. Company-wide revenues before reimbursable expenses, or RBR, grew 17% in the third quarter, including 10% organic growth, reflecting a robust demand environment for our services and strong execution by our teams." Hussey also emphasized record revenue growth in Healthcare, Education, and Commercial segments, with broad-based demand and expanding average engagement size, particularly in healthcare performance improvement and managed services.
* Hussey reported, "We continue to expand the use of AI and automation across our offerings to drive value creation for our clients and increase the efficiency of our service delivery." The company also completed the acquisitions of Eclipse Insights, Treliant, and Wilson Perumal & Company, integrating these into the Healthcare and Commercial segments to broaden capabilities and address client needs for strategy, financial advisory, and digital transformation.
* CFO John Kelly stated, "RBR for the third quarter of 2025 was a record $432.4 million, up 16.8% from $370 million in the same quarter of 2024." Kelly further explained, "Net income for the third quarter of 2025 was $30.4 million or $1.71 per diluted share compared to net income of $27.1 million or $1.47 per diluted share in the third quarter of 2024."

OUTLOOK

* Hussey announced, "We’re updating our annual guidance by narrowing our RBR guidance to a range of $1.65 billion to $1.67 billion, affirming our adjusted EBITDA guidance range of 14% to 14.5% of RBR and increasing our adjusted non-GAAP EPS to a range of $7.50 to $7.70." The midpoint of the RBR guidance reflects expectations for continued strong demand across all segments into Q4.
* Kelly stated, "We now expect full year operating income margin for the Healthcare segment to be in the 29% to 31% range."
* The Education segment is projected to maintain an operating margin in the 23% to 25% range for the full year, with Commercial segment margins expected at approximately 16% to 18%.

FINANCIAL RESULTS

* Huron reported record RBR of $432.4 million for Q3 2025, representing a 16.8% increase from the same quarter last year. Adjusted EBITDA reached $67.4 million or 15.6% of RBR for the quarter. Adjusted net income was $37.4 million, or $2.10 per diluted share.
* The Healthcare segment delivered record RBR of $219.5 million, up 19.9% over Q3 2024, with an operating income margin of 30.9% for the quarter. The Education segment posted RBR of $129.4 million, up 6.9% year over year, and a margin of 25.7%. The Commercial segment reported RBR of $83.4 million, a 26.6% increase, but with operating income margin declining to 15.4% due to increased compensation and contractor expenses and recent acquisitions.
* Cash flow from operations was $93.8 million, with free cash flow at $85.3 million. Total debt as of September 30, 2025, was $611 million, with net debt at $587.1 million. The company repurchased $18.6 million in shares during the quarter, totaling $152.5 million year-to-date.

Q&A

* Andrew Nicholas, William Blair: Asked for more detail on the healthcare segment’s performance improvement consulting and pipeline durability. C. Hussey responded, "This is perhaps the strongest market that we've ever seen... just a reaction to collective margin pressures... we've been able to deliver on behalf of our clients."
* Nicholas, William Blair: Inquired about setup for 2026. John Kelly said, "We're not in a position to really guide to that yet... the framework that we put out there [at Investor Day]... gives us confidence in that model."
* Tobey Sommer, Truist Securities: Asked about hiring capabilities. Kelly replied, "We feel really good about that... our ability to find the talent that we need and to add that talent."
* Sommer, Truist: Queried managed services headcount absorption. Kelly stated, "There is not a lot of space between conversion of sales and the hiring of resources there."
* William Sutherland, Benchmark: Sought clarity on commercial digital competition. Hussey clarified, "I don't think there's any real change in the competitive environment there."
* Sutherland, Benchmark: Asked about AI’s share in revenue and internal talent. Kelly shared, "In the 15% to 20% range of that total revenue is work that's directly related to AI type projects."
* Kevin Steinke, Barrington Research: Asked about utilization rates and project mix in education digital. Kelly replied, "That lower utilization that you see during the quarter was related to the head count additions that we made to really support demand."

SENTIMENT ANALYSIS

* Analysts maintained a positive to slightly optimistic tone, focusing on sustainability of recent segment growth, pipeline robustness, and the ability to absorb new hires, while probing for more color on AI initiatives and project mix.
* Management’s tone was confident and assertive in prepared remarks, emphasizing record results and robust demand. In Q&A, management remained positive, directly addressing concerns about hiring, utilization, and project pipelines, and frequently referenced confidence in their market positioning and strategy, as well as reiterating guidance.
* Compared to the previous quarter, management’s tone shifted from cautious optimism due to macro pressures to greater confidence, especially regarding healthcare and commercial momentum. Analysts displayed a similar or slightly more constructive tone, albeit still probing for sustainability and margin impacts.

QUARTER-OVER-QUARTER COMPARISON

* Huron moved from an 8% RBR growth in Q2 to 16.8% in Q3, with organic growth accelerating, especially in healthcare (from 4% to nearly 20%). The company narrowed RBR guidance and raised EPS expectations. Commercial segment margin declined due to acquisition integration, while healthcare margins expanded. Management’s confidence increased, especially as pipeline and sales conversion remained strong through Q3 and into Q4. Analysts in both calls focused on sustainability and implications of acquisitions, but in Q3, there was more emphasis on hiring capacity, AI, and managed services headcount utilization.

RISKS AND CONCERNS

* Management noted persistent pressures on healthcare provider margins, ongoing regulatory and funding changes (especially Medicaid), and workforce shortages. Education clients face policy uncertainty, declining research funding, and enrollment pressures. Commercial segment faces margin pressure due to acquisition integration and increased compensation costs. Management’s mitigation strategies include broadening offerings, expanding AI and automation, and targeted hiring to meet demand. Analysts questioned the sustainability of recent growth rates, utilization headwinds from hiring, and integration of new acquisitions.

FINAL TAKEAWAY

Huron’s third quarter 2025 call showcased record performance across all segments, propelled by robust demand in healthcare and commercial markets, recent acquisitions, and expanding AI-driven solutions. With narrowed revenue guidance and raised EPS targets, management expressed confidence in sustaining growth momentum and margin expansion into year-end, underpinned by a strong pipeline, high client demand, and disciplined execution across its portfolio.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/hurn/earnings/transcripts]

MORE ON HURON CONSULTING

* Huron Consulting Group Inc. (HURN) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4834356-huron-consulting-group-inc-hurn-q3-2025-earnings-call-transcript]
* Huron Consulting: Strong Fundamentals And Execution; A Hard Pass On Valuations [https://seekingalpha.com/article/4827128-huron-consulting-strong-fundamentals-and-execution-a-hard-pass-on-valuations]
* Huron Consulting Group Inc. (HURN) Presents at Sidoti Small Cap Conference - Slideshow [https://seekingalpha.com/article/4825300-huron-consulting-group-inc-hurn-presents-at-sidoti-small-cap-conference-slideshow]
* Huron raises 2025 RBR outlook to $1.68B and EPS target to $7.70 while advancing commercial and healthcare acquisitions [https://seekingalpha.com/news/4476643-huron-raises-2025-rbr-outlook-to-1_68b-and-eps-target-to-7_70-while-advancing-commercial-and]
* Huron acquires global financial services consulting firm Treliant [https://seekingalpha.com/news/4475938-huron-acquires-global-financial-services-consulting-firm-treliant]