HURN — Huron Consulting Group Inc.

Huron Consulting Group (HURN) Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Record Revenue Before Reimbursable Expenses (RBR): $465.6 million, up 15.7% year-over-year (YoY).
• Organic RBR Growth: 10.8% in Q2 2026.
• Net Income: $31.2 million ($1.91 per diluted share), compared to $19.4 million ($1.09 per diluted share) in Q2 2025.
• Adjusted EBITDA: $72.6 million (15.6% of RBR), up from $60.6 million (15.1% of RBR) YoY.
• Adjusted EPS: $2.46, a 30.2% increase YoY.
• Cash Flow from Operations: $120.5 million, with free cash flow of $111.3 million.
• Total Debt: $834 million, with a net debt of $802.8 million and a leverage ratio of 2.8x adjusted EBITDA.

2. Strategic Updates and Business Highlights:

• Segment Performance:
  • Healthcare: RBR grew 17.4% YoY, driven by managed services and digital offerings.
  • Education: RBR increased by 7.8% YoY, supported by digital and managed services.
  • Commercial: RBR grew 24.6% YoY, reflecting strong demand for financial advisory services.
• AI Integration: Significant growth in AI-driven projects, with over 60% of digital bookings including AI components. AI is seen as a key growth driver across all segments.
• Acquisition of RelateCare: Strengthens healthcare managed services and is expected to add approximately $30 million in RBR for 2026.

3. Forward Guidance and Outlook:

• RBR Guidance: Increased to $1.85 billion - $1.89 billion for the full year 2026, reflecting a 12% increase at the midpoint compared to 2025.
• Adjusted EBITDA Margin Guidance: Maintained at 14.5% - 15% of RBR.
• Adjusted Non-GAAP EPS Guidance: Increased to $9.00 - $9.40, representing a 17% increase at the midpoint compared to 2025.
• Segment Growth Expectations:
  • Healthcare: Mid-teen percentage growth.
  • Education: Mid- to upper single-digit growth.
  • Commercial: Low-teen percentage growth.

4. Bad News, Challenges, or Points of Concern:

• Healthcare Market Pressures: The healthcare provider market is financially challenged, with rising costs outpacing reimbursements, which may impact future growth despite current demand.
• Utilization Rates: Current utilization is high, prompting the need for hiring to maintain capacity. The target utilization rate is in the upper 70% range.
• Corporate Expenses: Unallocated corporate expenses increased significantly, reflecting investments in support personnel and technology.

5. Notable Q&A Insights:

• Hiring Plans: The company plans to hire in response to high utilization rates, targeting high single-digit percentage growth in consulting headcount.
• AI Demand: AI is seen as both a replacement and an incremental driver of growth, with no significant pricing pressures observed in the shift towards outcome-based contracts.
• Managed Services Growth: The managed services segment is experiencing strong demand due to its outcomes-based model, which provides clear ROI for clients.
• M&A Strategy: Huron is focused on programmatic M&A, targeting smaller, strategic acquisitions to enhance capabilities without taking on excessive risk.

This summary encapsulates Huron Consulting Group's Q2 2026 performance, highlighting strong financial results, strategic growth initiatives, and potential challenges moving forward.