Huron (HURN) Q2 EPS Jumps 12.5%

Huron Consulting Group (HURN -8.04%), a professional services firm specializing in consulting for healthcare, education, and commercial clients, released its second quarter fiscal 2025 results on July 31, 2025. The most notable news: adjusted diluted earnings per share (non-GAAP) reached $1.89—surpassing analyst estimates by $0.10 on a non-GAAP basis—while revenue (GAAP) came in at $402.5 million, essentially in line with expectations. The company also increased its guidance for the full year, projecting improved revenue and adjusted profits (non-GAAP). While non-GAAP metrics improved strongly, reported net income (GAAP) dropped due to a one-time investment impairment. Overall, the quarter saw healthy growth in key segments, with strength in Digital capabilities within the Commercial and Education segments and Consulting and Managed Services capabilities within the Healthcare and Education segments and continued margin improvement on an adjusted (non-GAAP) basis.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Key Focus Areas

Huron Consulting Group is a management consulting company that partners with clients in healthcare, education, and commercial industries to tackle strategy, operations, technology, and digital transformation projects. The core of its business is helping organizations solve complex regulatory, financial, and operational issues.

Recently, Huron has prioritized expanding its reach in healthcare and education—its largest markets—while also growing its digital capabilities and diversifying into commercial sectors like financial services and energy. The firm’s focus on investing in people, technology, and operational efficiency has shaped its ability to meet changing market needs. Success for Huron hinges on broadening expertise in regulated sectors, keeping a strong digital offering, and maintaining high utilization of its consultants and professionals.

Quarter Highlights: Growth, Margins, and Notable Developments

In the quarter, Huron delivered revenue growth of 8.3%, with revenue before reimbursable expenses (GAAP) was $402.5 million. Each of its three primary segments grew, with Commercial segment growth including revenue from the AXIA Consulting acquisition. Healthcare contributed $197.8 million, up 4.1%, and made up nearly half the business. Education brought in $129.3 million in revenues before reimbursable expenses, a rise of 5.3%. The Commercial segment stood out with a 28.2% increase to $75.4 million, with much of this surge coming from the AXIA Consulting acquisition and digital business. Together, Healthcare and Education accounted for 82% of revenue before reimbursable expenses for the first six months of 2025.

Profitability showed two sides. Adjusted EBITDA (non-GAAP) improved 8.8% to $60.6 million, with adjusted diluted earnings per share (non-GAAP) climbed 12.5%. This growth outpaced revenue growth, as cost controls and higher consultant utilization (up 3.3 percentage points to 77.0%) contributed to a slight increase in adjusted EBITDA margin. However, reported net income and GAAP earnings per share both fell by nearly half compared to Q2 2024. This was due to an $8.2 million after-tax impairment on a convertible debt investment and the absence of an $11.1 million litigation settlement gain, net of tax, from Q2 2024. The adjusted figures remove these one-time items to give a clearer picture of the underlying business.

Revenue in Digital, which includes technology and analytics services, grew 13.1% to $173.4 million. Utilization rates for Digital professionals reached 77.8%, a notable increase. The company’s managed services arm—providing clients with recurring solutions—saw a 54.2% increase in headcount, reaching 1,918 professionals. This points to growing demand for outsourcing and ongoing client support beyond classic consulting engagements.

A key event was the integration of AXIA Consulting, driving incremental revenue and boosting the firm’s digital and supply chain solutions. While this aided Commercial segment growth, the company noted a decline in its traditional consulting and managed services offerings within Commercial, indicating segment volatility. Digital gains have been solid in Commercial and Education, but demand in Healthcare digital services was down, suggesting that budget cycles or market factors are impacting clients there.

Huron continued to invest in talent, growing total revenue-generating headcount by 7.8% year over year. Operating cash flow (GAAP) for the first half of 2025 remained negative, a pattern seen in prior years due to bonus payments early in the calendar cycle. As the company funded acquisitions and share buybacks, it returned $133.9 million to shareholders through repurchases in the first six months of 2025, equal to 5.3% of shares outstanding as of December 31, 2024. Post-quarter, Huron extended and expanded its credit facility to $1.1 billion, securing flexibility for further investments.

Outlook and What to Watch

Looking ahead, management raised full-year financial guidance. It now expects revenue before reimbursable expenses between $1.64 billion and $1.68 billion (up from $1.58–$1.66 billion). The new adjusted diluted earnings per share (non-GAAP) target is $7.30 to $7.70, higher than the prior range of $6.80–$7.50. Adjusted EBITDA margins are now seen at 14.0% to 14.5% of revenue. Management expressed confidence in the company’s pipeline and its execution in core markets. These upgrades reflect strength in Healthcare, Education, and Digital business lines, with ongoing integration of acquisitions factored into future growth.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.