Good afternoon, and welcome to Huron Consulting Group’s webcast to discuss Financial Results for the First Quarter 2025. At this time, all conference call lines are on a listen-only mode. Later, we will conduct a question-and-answer session for conference call participants, and instructions will follow at that time. As a reminder, this conference call is being recorded. Before we begin, I would like to point all of you to the disclosure at the end of the company’s news release for information about any forward-looking statements that may be made or discussed on this call. The news release is posted on Huron’s website. Please review that information along with the filings with the SEC for a disclosure of factors that may impact subjects discussed in this afternoon’s webcast. The company will be discussing one or more non-GAAP financial measures. Please look at the earnings release and on Huron’s website for all of the disclosures required by the SEC, including reconciliations to the most comparable GAAP numbers. And now, I would like to turn the call over to Mark Hussey, Chief Executive Officer and President of Huron Consulting Group. Mr. Hussey, please go ahead.

Good afternoon, and welcome to Huron Consulting Group’s first quarter 2025 earnings call. With me today are John Kelly, our Chief Financial Officer; and Ronnie Dail, our Chief Operating Officer. Driven by strong growth across all three operating segments, revenues before reimbursable expenses or RBR grew 11% over the first quarter of 2024, while we continue to expand our margins. Our first quarter results reflect our continued progress in executing our growth strategy, which we refreshed and shared at our Investor Day in March. We’re encouraged by our performance in the first quarter in the face of a dynamic external environment. Today, we reaffirm our annual guidance. As we stated on our year-end earnings call and reiterated at our Investor Day last month, we believe the challenges and opportunities of the external environment are contemplated within our guidance range. Our strong client relationships, incredibly talented team, industry expertise and breadth of capabilities, including our performance improvement offerings, collectively position us well to serve our clients as they navigate an evolving and complex regulatory landscape and continued market disruption. I’ll now share some additional insights into our first quarter performance. In the Healthcare segment, first quarter RBR grew 10% over the prior year quarter. The increase in RBR in the first quarter of 2025 was primarily driven by continued strong demand for our performance improvement and financial advisory offerings. Our Healthcare business continues to perform exceptionally well as our clients respond to increasing financial pressures and potential regulatory changes. Despite increased patient volumes, many of our large health system clients continue to face operating expenses that are outpacing reimbursements. We believe this is a trend that will continue for the foreseeable future. In addition, potential changes to Medicaid funding, reductions in research funding, changes to the 340B drug pricing program and…

Thank you, Mark, and good afternoon, everyone. Before I begin, please note that I will be discussing non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted net income, adjusted EPS and free cash flow. Our press release, 10-Q and Investor Relations page on the Huron website have reconciliations of these non-GAAP measures to most comparable GAAP measures, along with a discussion of why management uses these non-GAAP measures and why management believes they provide useful information to investors regarding our financial condition and operating results. Before discussing our financial results for the quarter, I would like to discuss several housekeeping items. First, our first quarter results exclude the operating results from the Studer Education business, which was divested on December 31, 2024. Second, our first quarter results do reflect a full-quarter of operating results from the acquisition of AXIA Consulting, primarily in the commercial segment, which closed effective December 1, 2024. And finally, our acquisitions of Advancement Resources and Halpin closed on March 1 and March 17 respectively and as such a partial period of their operating results are included within the Education segment. The operating results of Advancement Resources and Halpin are not material to our first quarter results. Now, I will share some of the key financial results for the first quarter. RBR for the first quarter of 2025 was $395.7 million, up 11.2% from $356 million in the same quarter of 2024. The increase in RBR for the quarter was driven by strong growth across all three operating segments. Net income for the first quarter of 2025 increased 36.3% to $24.5 million to $1.33 per diluted share, compared to net income of $18 million to $0.95 per diluted share in the first quarter of 2024. As a result or as a percentage of total revenues, net income…

Thank you. [Operator Instructions]. And our first question comes from the line of Andrew Nicholas of William Blair and Company. Please go ahead, Andrew.

Thanks and good afternoon. I want to ask first about the commercial segment outlook. Obviously, it feels like quite a bit’s happened since the March Investor Day. Could you speak a little bit more specifically to the pipeline for that business, whether or not you’re seeing any kind of pockets of indecision or pullback on discretionary projects? And maybe relatedly, if you have any kind of changes to the segment out level growth expectations for that business?

Andrew, it’s John. I’ll start. No changes to our guidance at the segment level. Actually, if you look at the first quarter, we had record levels of sales conversion during the first quarter in our commercial segment and that was primarily driven by the digital business. So, if you look at the results for the first quarter, you’ve got the inorganic contribution from AXIA that we talked about. Our commercial digital business, as Mark referenced, was up 12% during the quarter, which I think corresponds to that pipeline in backlog strength. On the consulting side, that’s where we did see negative growth during the quarter. I’d probably put that to a couple of buckets. I think on the strategy part, I think that is an area where you do see some impact from the current macro environment and there is just a lot of disruption there and I’d say strategy within commercial is an area that we’ve got a little bit of caution on as we continue to look at it as the year goes on. I think in terms of the financial advisory part of the business, it’s really a case of that team was very busy during the quarter, but it happened to be that a lot of the work came in the healthcare segment for some of our clients that were going through distress within healthcare. As we turn the corner into April, a lot of the inquiries that we’re seeing now are more weighted back towards the commercial segment. So, I think that we’ll see increased demand there from a financial advisory in the commercial segment during the second quarter, a little bit of a watch item on the strategic part of the business, which even there for that team, I’d note they were also very busy in the healthcare part of the business during the quarter. It was just on the commercial side that was a little bit softer. And then we feel really good about the way things are shaping up from a digital perspective.

And Andrew, the only additional comment I’ll make is just that I think with the balance between pro and countercyclical offerings in that segment, it gives us a higher degree of confidence that the outlook for the year is intact and we’ll be in fine shape. We certainly have a lot of quarters ahead of us to get through, but we feel good about the year.

Great. That’s helpful and encouraging. I guess for my follow-up, I just wanted to ask specifically on headcount growth. I think sequentially it was relatively flat, if I take out some of the inorganic ads, and I’m looking just at the revenue generating professionals, not the managed services employees. So, could you just maybe speak to that and how you’re thinking about headcount growth in this current market environment? Where are you prioritizing new headcount growth? And is the expectation for that to resemble headcount or excuse me, revenue growth still? Thank you.

Yes, Andrew, it’s John. I can start. When we look out at the full year, we still expect headcount growth to largely and again similar to you, I’m answering excluding managed services headcount. But excluding that population, we expect headcount to largely flux with revenues the year goes on. I think we saw it in the first quarter, which is some really good execution by our teams in terms of utilization. You probably noticed that utilization for both our consulting capability as well as our digital capability was up roughly 400 basis points in each of those areas in the first quarter of this year versus last year. So, I think, the team did a really good job of using the talent that we have to execute on the revenue that we entered in the first quarter. But as we continue to grow throughout the year, we’re certainly going to need to be hiring and adding more talent. I’d say, in particular within our healthcare business, that’s an area where we just continue to see strong demand from a pipeline perspective, strong sales conversion in that scenario where I think you’ll see us continue to add headcount to support the growth we’re expecting as the year goes on.

Very helpful. Thanks again.

Thank you. Our next question comes from the line of Tobey Sommer of Truist Securities. Please go ahead, Tobey.

Thank you. Good afternoon. How would you characterize the new business in billings in education and healthcare broadly during April? Any kind of change versus the first quarter trend?

No, nothing notable that I would point you to. In fact, if you look at our I know you’re asking about even as we progressed into the second quarter here, but if you look at our first quarter sales conversion, it was up meaningfully from where it was a year ago. So that was a good indicator. A lot of that pipeline conversion came through in February and March and there was significant growth in terms of conversions during those couple of months as well. And no change that I point to in April. It’s just, you know, we’re not even all the way through that month yet. We’re getting there, but not quite there.

And maybe it’s only the one thing I’d add is, I was going to say and on the flip side, we haven’t seen cancellations either, things that we’ve already sold, so we continue to progress. So it’s, I think it’s pretty much a fairly normal environment for us from what we would typically see, passing all the disruptions going on.

Great. And that kind of goes to where my follow-up was going to be in terms of zooming in a bit. So, in that select group of private universities that are most impacted by policy changes, anything you’ve seen in your business there with them in projects? And I understand you may have preemptively answered part of that already.

No. Really, we continue to work with them. Many of these go back from the founding of the company in terms of just the length of time of the relationships. So, we’ve been a trusted advisor for them in various situations that have come along. The nature of the work might shift a little bit, but again, it really has not had to from our perspective any kind of dramatic effect as a result of the headlines that have been out there.

Thank you. And how has assessment activity trended in for performance improvement projects? And is there any shift that you could share with us in terms of customers’ propensity to include performance fees?

I would say, Tobey, it continues to be a robust environment in terms of assessment activity. I think that’s characterized by some of the trend lines that we saw coming into the year where many of our clients are going through financial strain related to constrained revenue, at the same time the cost is continuing to escalate. So, I think that’s still been a theme. And then I think some of the recent regulatory changes or the evolving environment there has caused some clients, to continue to be concerned about, revenue constraints and funding sources, which then oftentimes something that causes clients to look at performance improvement type projects as a way to address potential budgetary gaps in that sort of environment. So, the pipeline and the assessments we see continue to be busy in that area. In terms of contingent based fees versus normal fees, I would say no. I don’t think we’ve seen any real shift in terms of mix in that regard.

Okay. And then, just wanted to ask one more question on project size and duration. If you zoom out here and you think about what you’re seeing in the business, what you have in your backlog already, do you think the size and duration of your projects is changing at all? And if so, in which direction?

Over time, Tobey, and when I say that through last year and to the early part of this year, we are seeing, the average job size increase. I think that’s reflective of some of the challenges that our clients have been facing and, I think that’s really across the industry too in terms of just scope and complexity. The other big thing there too is with the change in our operating model, the number of projects where we’re bringing in different capabilities, whether that’s bringing in our digital capability or strategy capability or financial advisory capability, I think that adds to project size as well. So that’s been a trend that’s been, increasing for us.

Thank you very much. I’ll get back in the queue.

Thank you. [Operator Instructions]. Seeing no more questions in the queue, I’d like to turn the call back to Mr. Hussey. Sir?

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

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