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What changed in Huron Consulting Group Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Huron Consulting Group Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+368 added−345 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-27)

Top changes in Huron Consulting Group Inc.'s 2024 10-K

368 paragraphs added · 345 removed · 288 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur 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 and accounting and operations to organization and talent strategy and student and academic strategy.
Biggest changeOur 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, AI and automation, 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; our strategy and operations consulting services, which span finance, accounting, operations and athletics to organization and talent strategy and student and academic strategy; and our global philanthropy consulting services, which were bolstered by the acquisition of Grenzebach Glier and Associates in March of 2024. • 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.
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.
Examples include the areas of revenue cycle management and research administration managed services and outsourcing at our healthcare, 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.
HUMAN CAPITAL RESOURCES AND MANAGEMENT Our people are at the center of Huron’s strategy, and we are committed to providing a workplace where our talented and diverse team can thrive both personally and professionally. Success hinges on our ability to attract, engage, develop, reward, and retain highly skilled professionals.
HUMAN CAPITAL RESOURCES AND MANAGEMENT Our people are at the center of Huron’s strategy, and we are committed to providing a workplace where our talented team can thrive both personally and professionally. Success hinges on our ability to attract, engage, develop, reward, and retain highly skilled professionals.
CORPORATE SOCIAL RESPONSIBILITY As a mission-driven company, we recognize it is our collective responsibility to actively contribute to a sustainable and brighter future, benefiting our clients, employees, communities, and shareholders. We continue to publish an annual report highlighting the actions we have taken globally to strengthen our clients, our communities, our people and the environment.
CORPORATE SOCIAL RESPONSIBILITY As a mission-driven company, we recognize it is our collective responsibility to actively contribute to a sustainable and brighter future, benefiting our clients, employees, communities, and shareholders. We continue to publish an annual report highlighting the actions we have taken globally to strengthen our clients, our communities, and our people.
We provide information about our business and financial performance, including our corporate profile, on the Investor Relations page of our website. Additionally, we webcast our earnings calls and certain events we participate in with members of the investment community on the Investor Relations page of our website.
We provide information about our business and financial performance, including our corporate profile, on our investor relations website. Additionally, we webcast our earnings calls and certain events we participate in with members of the investment community on our investor relations website.
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.
Our Commercial professionals use their deep industry, functional and technical expertise to deliver our digital services and software products, financial and capital advisory (special situation advisory and corporate finance advisory) consulting services, and strategy and innovation consulting services.
In addition to the responsibilities listed above, our managing directors' primary focus is on propelling our business growth by selling our portfolio of offerings to generate revenue streams from both new and existing clients. • Senior directors, directors, and managers are primarily focused on managing day-to-day client relationships and our engagement teams while overseeing the delivery and quality of our work as well as developing our people and nurturing our collaborative culture. • Associates and analysts focus on ensuring client commitments are met by gathering and organizing data, conducting detailed analyses, crafting materials that synthesize information to support our recommendations, and implement financial, operational, and technology and analytic solutions to execute on the recommendations we provide to clients. • Our functional professionals, who are led by our executives and corporate vice presidents, comprise Huron’s enterprise functional teams, including corporate development, facilities, finance and accounting, human resources, information technology, legal, and marketing.
In addition to the responsibilities listed above, our managing directors' primary focus is on propelling our business growth by selling our portfolio of offerings to generate revenue streams from both new and existing clients. • Senior directors, directors, senior managers and managers are primarily focused on managing day-to-day client relationships and our engagement teams while overseeing the delivery and quality of our work as well as developing our people and nurturing our collaborative culture. • Associates and analysts focus on meeting client commitments by gathering and organizing data, conducting detailed analyses, crafting materials that synthesize information to support our recommendations, and implement financial, operational, and technology and analytic solutions to execute on the recommendations we provide to clients. • Our functional professionals, who are led by our executives and corporate vice presidents, comprise Huron’s enterprise functional teams, including corporate development, facilities, finance and accounting, human resources, information technology, legal, marketing and operations.
These professionals offer strategic guidance and execute on initiatives on behalf of the enterprise to support our client-facing objectives and the achievement of our growth strategy. In addition to our full-time employees, we engage temporary workers on an as-needed basis, primarily seeking specialized skills and/or experience to augment our capacity for delivering client engagements or internal initiatives.
These professionals offer strategic guidance and execute on initiatives on behalf of the enterprise to support our client-facing objectives and the achievement of our growth strategy. In addition to our full-time employees, we engage temporary workers on an as-needed basis, primarily bringing specialized skills and/or experience to augment our capacity for delivering client engagements or internal initiatives.
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.
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 2024 Best in KLAS® report; and Huron Intelligence™ Analytic Suite in Healthcare, a predictive analytics suite to improve care delivery while lowering costs.
Development: We know the ability to advance one’s career, growing both personally and professionally, is critical to employee retention and engagement. To facilitate this advancement, we offer a diverse array of learning and development opportunities and experiences that can be tailored to personal needs and applied to individual context.
Development: We know the ability to advance one’s career, growing both personally and professionally, is critical to employee retention and engagement. To facilitate this advancement, we offer a wide array of learning and development opportunities and experiences that can be tailored to personal needs and applied to individual context.
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, which align our business by industry.
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 - which aligns our business by industry.
The content of our websites is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
The content of any referenced website is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
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.
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 retail.
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.
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 further achieve margin expansion as well as strong annual adjusted diluted earnings per share growth.
Our SASB index provides further quantitative and qualitative information regarding our data security programs, practices and policies, workforce diversity and engagement metrics, and our approach to promoting professional integrity and ethical behavior among our workforce, commensurate with best practices for professional services organizations.
Our SASB index provides further quantitative and qualitative information regarding our data security programs, practices and policies, workforce metrics, and our approach to promoting professional integrity and ethical behavior among our workforce, commensurate with best practices for professional services organizations.
Often, the client relationship of an employee in one area of our business leads to opportunities in another area, enhancing the opportunity to increase wallet share at a specific client. All of our managing directors and principals understand their roles in ongoing relationship and business development, which is reinforced through our compensation and incentive programs.
Often, the client relationship of an employee in one area 5 Table of Contents of our business leads to opportunities in another area, enhancing the opportunity to increase wallet share at a specific client. All of our managing directors and principals understand their roles in ongoing relationship and business development, which is reinforced through our compensation and incentive programs.
Further corporate governance information, including our code of ethics, code of business conduct, corporate governance guidelines, and board committee charters, is also available on the Investor Relations page of our website.
Further corporate governance information, including our code of business conduct and ethics, corporate governance guidelines, and board committee charters, is also available on our investor relations website.
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.
The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services, energy and utilities, industrials and manufacturing, and the public sector. 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.
We continue to: • Facilitate an interactive two-day orientation curriculum for newly hired employees to ensure a smooth induction into the organization. • Offer just-in-time, personal coaching and training opportunities that inform and prepare leaders and coaches to excel in moments that matter for our employees. • Strive to develop world class leaders, guided by our values and leadership principles, by delivering programs and opportunities, such as our Senior Director Cohort, Milestone schools and Sponsorship program, that achieve this goal by focusing on key leadership behaviors. • Provide access to a variety of learning opportunities that are offered through multiple modalities to further develop employees’ skills, including technical knowledge, EQ capabilities, team dynamics, and a proficiency in coaching and developing others. • Encourage employees to enhance their professional capabilities through external learning opportunities that certify and validate industry, functional and technical skills. • Match employees with internal onboarding stewards, performance coaches, mentors, and, in some cases, sponsors to facilitate their growth and expand their network of support.
We continue to: • Facilitate an interactive two-day orientation curriculum for newly hired employees to ensure a smooth induction into the organization. • Offer just-in-time, 1:1 coaching and training opportunities that inform and prepare leaders and coaches to excel in moments that matter for our employees. • Strive to develop world class leaders, guided by our values and leadership principles, by delivering programs and opportunities, such as our Senior Director Cohort, Milestone schools and Sponsorship program, which focus on key leadership behaviors. • Provide access to a variety of learning opportunities that are offered through multiple modalities to further develop employees’ skills, including technical knowledge, EQ capabilities, team dynamics, and a proficiency in coaching and developing others. • Encourage employees to enhance their professional capabilities through external learning opportunities that certify and validate industry, functional and technical skills. 4 Table of Contents • Match employees with internal onboarding stewards, performance coaches, mentors, and, in some cases, sponsors to facilitate their growth and expand their network of support.
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.
For example, 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; a Microsoft Solutions Partner, an Informatica Platinum Partner; an SAP Concur implementation partner; and a Boomi Elite Partner.
To accomplish this, we offer employees a competitive base salary, short- and long-term variable pay incentives, and market-competitive and equitable benefits.
To accomplish this, we offer employees a competitive base salary, short- and long-term variable pay incentives, and market-competitive and employee-focused benefits.
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. 1 Table of Contents • 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.
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, utilizing our global delivery platform in India, and scaling our selling, general, and administrative expenses as we grow. 1 Table of Contents • Strong Balance Sheet and Cash Flows: A resilient, flexible balance sheet is the foundation of our financial strength, and strong free cash flows have and will continue to be the hallmark of Huron’s business model.
We believe the principal competitive factors in our market include reputation, the ability to attract and retain top talent, the capacity to manage engagements effectively to drive high value to clients, and the ability to deliver measurable and sustainable results.
We believe the principal competitive factors in our market include reputation, the ability to attract and retain top talent, the capacity to manage engagements effectively and with the highest quality to drive value for clients, and the ability to deliver measurable and sustainable results.
Operating Industries For the year ended December 31, 2023, we derived 49%, 32% and 19% of our consolidated revenues from our Healthcare, Education and Commercial operating segments, respectively. • 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.
Operating Industries For the year ended December 31, 2024, we derived 51%, 32% and 17% of our consolidated revenues before reimbursable expenses from our Healthcare, Education and Commercial operating segments, respectively. • 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.
We are committed to creating learning pathways that reflect the unique needs of our diverse population, engage them in a future at Huron, and enhance our culture of belonging.
We are committed to creating learning pathways that reflect the specific needs of our global population, engage them in a future at Huron, and enhance our culture of collaboration.
Our clients span hospitals, health systems and academic medical centers; colleges, universities and research institutes; banks, asset managers, insurance companies and private equity firms; oil and gas and utilities companies; manufacturing organizations; and the federal government. In 2023, we served nearly 2,000 clients and our 10 largest clients accounted for approximately 19% of our consolidated revenues.
Our clients span hospitals, health systems and academic medical centers; colleges, universities and research institutes; banks, asset managers, insurance companies and private equity firms; oil and gas and utilities companies; manufacturing organizations; not-for-profit organizations; and the public sector. In 2024, we served over 2,100 clients and our 10 largest clients accounted for approximately 17% of our consolidated revenues.
To learn more about how we continue to execute and expand on our diversity, equity, and inclusion action plan, please refer to our annual Corporate Social Responsibility report, which is available on our investor relations website located at ir.huronconsultinggroup.com.
To learn more about how we continue to execute on our employee and community commitments, refer to our annual Corporate Social Responsibility report, which is available on our investor relations website located at ir.huronconsultinggroup.com.
Additional information on our people and programs follows. 3 Table of Contents Our People: As of December 31, 2023, our workforce was comprised of approximately 6,480 full-time professionals. • Our nearly 240 managing directors and principals actively play a pivotal role in serving our clients, acting as strategic business advisors, coaches, and industry experts and collaborating with organizations and their leaders to tackle complex business challenges.
Our People: As of December 31, 2024, our workforce was comprised of approximately 7,230 full-time professionals. • Our nearly 270 managing directors and principals actively play a pivotal role in serving our clients, acting as strategic business advisors, coaches, and industry experts and collaborating with organizations and their leaders to tackle complex business challenges.
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.
Our healthcare-focused services and products include financial and operational performance improvement consulting, which spans revenue cycle, business operations 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, artificial intelligence (“AI”) and automation, 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, not-for-profit organizations and other education-related organizations.
For additional information on Huron’s commitment to a more sustainable future, refer to our annual Corporate Social Responsibility report, which includes our SASB index, and is available on our investor relations website located at ir.huronconsultinggroup.com.
For additional information, refer to our annual Corporate Social Responsibility report, which is available on our investor relations website located at ir.huronconsultinggroup.com.
The cornerstone of our human capital strategy lies in both our mission-driven approach and an enduring belief that great leaders and engaged coaches cultivate a work environment where team members feel valued, create deep connections, and see their future with Huron. Our unwavering focus extends across every aspect of the employee journey, from the recruitment phase to post-employment or retirement.
The cornerstone of our human capital strategy lies in both our mission-driven approach and an enduring belief that great leaders and engaged coaches cultivate a work environment where team members feel valued, create deep connections, perform meaningful work and see their future with Huron.
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 have grown our data, analytics, AI and automation offerings to deliver a unified and actionable technology ecosystem for our clients.
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’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: As data and technology persist and evolve across industries, 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.
Engagement: We gauge our employee engagement success through various metrics, including: • Employee engagement and pulse scores, which was 81 in 2023 and surpassed the Glint Employee Engagement global benchmark of 76; • Coach quality score, which was 83.5 in 2023 and above the Glint Coach Quality global benchmark of 81; and 4 Table of Contents • Volunteer hours in our communities, which was nearly 12,000 hours in 2023.
Engagement: We gauge our employee engagement success through various metrics, including: • Employee engagement score, which was 82 in 2024 and surpassed the Glint Employee Engagement global benchmark of 74; • Coach quality score, which was 83 in 2024 and above the Glint Coach Quality global benchmark of 82; and • Volunteer hours in our communities, which was nearly 13,000 hours in 2024 delivered by 42% of our total employee population.
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.
We are headquartered in Chicago, Illinois, with additional locations in the United States and abroad in Canada, India, Singapore and Switzerland. 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.
In addition to external recognitions, we monitor human capital-related internal metrics. Our leading measure is our quarterly employee engagement score. In addition, we regularly review voluntary turnover across a number of key variables including business unit, individual performance, geography, and demographics in order to assess the effectiveness of our employee development and total rewards programs.
In addition, we regularly review voluntary turnover across a number of key variables including business unit, individual performance, and geography in order to assess the effectiveness of our employee value proposition inclusive of employee development and total rewards programs. Additional information on our people and programs follows.
In addition, to complement the business development efforts of our managing directors, we have dedicated business development professionals who are focused exclusively on developing client relationships and generating new business. 5 Table of Contents COMPETITION The professional services industry is extremely competitive, highly fragmented, and constantly evolving.
We actively seek to identify new business opportunities and frequently receive referrals and repeat business from past and current clients. In addition, to complement the business development efforts of our managing directors, we have dedicated business development professionals who are focused exclusively on developing client relationships and generating new business.
We have and will continue to pursue these goals through our Huron Helping Hands program, employee resource groups, sustainability efforts, and corporate partnerships. As an addendum to our Corporate Social Responsibility report, we publish a Sustainability Accounting Standards Board (“SASB”) index in line with SASB’s Professional & Commercial Services standards.
Our Corporate Social Responsibility report reflects our efforts in support of the United Nations Sustainable Development Goals (“SDGs”), that align with our values-driven culture and the work we do for our clients. As an addendum to our Corporate Social Responsibility report, we publish a Sustainability Accounting Standards Board (“SASB”) index in line with SASB’s Professional & Commercial Services standards.
We strive to craft a personalized experience for our employees, empowering them to have a meaningful impact on our clients, communities, and each other.
Our unwavering focus extends across every aspect of the employee journey, from the recruitment phase to post-employment or retirement. We strive to craft a personalized experience for our employees, empowering them to have a meaningful impact on our clients, communities, and each other. In 2024, Huron received widespread recognition as an employer of choice.
ITEM 1. BUSINESS. 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.
ITEM 1. BUSINESS. OVERVIEW Huron is a global professional services firm that partners with clients to put possible into practice by creating sound strategies, optimizing operations, accelerating digital transformation, and empowering businesses to own their future. By embracing diverse perspectives, encouraging new ideas and challenging the status quo, we create sustainable results for the organizations we serve.
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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 are headquartered in Chicago, Illinois, with additional locations in the United States and abroad in Canada, India, Singapore and Switzerland.
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Key focus areas of our growth strategy include: • Accelerating Growth in Healthcare and Education: Huron holds 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 and abroad.
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To best serve our clients, we continue to diversify our portfolio of offerings.
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The Company will continue to broaden its portfolio of offerings in healthcare and education to drive even greater impact on current and new clients as the needs in those industries further evolve due to competitive, regulatory, financial, and broader market changes. • Growing Presence in Commercial Industries: Through its deep industry and capability expertise and nimble approach, Huron has grown its client base and expanded its credentials in the commercial industries.
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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.
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In December 2024, we expanded our Commercial consulting and digital services offerings through the acquisition of AXIA Consulting, a leading provider of supply chain-focused consulting and technology solutions who has deep expertise in the industrials and manufacturing and retail sectors.
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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.
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Through our acquisition of AXIA Consulting, we have also expanded our supply chain management (“SCM”) offerings and broadened our technology portfolio with advanced Microsoft capabilities, while strengthening Huron's ability to empower clients to align their people and processes to support their digital-first goals. We have expanded our ecosystem to work with more than 25 technology partners.
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This commitment has consistently earned Huron external recognition, including being named a “Best Place to Work” by Glassdoor in January 2024; being named a Best Firm to Work For by Consulting magazine in 2023 for the 13th consecutive year; a decade of perfect scores on the Human Rights Campaign (HRC) Foundation Corporate Equality Index (CEI); and receiving two companywide awards from Consulting magazine for diversity, equity and inclusion and retaining female talent in 2023.
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For the fourteenth consecutive year, Consulting Magazine named Huron a ‘‘Best Firm to Work For,’’ acknowledging our strong commitment to our people, our values, our clients and the communities we serve.
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Diversity, Equity and Inclusion: Huron strives to reflect the rich diversity of the clients we serve and the communities in which we live. Our commitment to inclusion has been embedded in the organization since our founding and is fostered in our day-to-day work environment.
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Additionally, we were recognized by; • Glassdoor as a ‘‘Best Place to Work’’ 3 Table of Contents • TIME Magazine as one of ‘‘America’s Best Mid-Size Companies’’ • Forbes as one of the ‘‘World’s Best Management Consulting Firms’’, one of ‘‘America’s Best Management Consulting Firms’’, and one of ‘‘America's Best Employers for Women’’ • U.S.
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In 2020, we renewed our commitment to holding ourselves accountable by developing a five-year diversity, equity, and inclusion action plan to help build a more equitable society.
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News and World Report as one of the ‘‘Best Companies to Work For’’ and one of the ‘‘Best Places to Work for Supporting Family Caregiving’’ • Vault as #4 in Consulting Internships In addition to external recognitions, we monitor human capital-related internal metrics. Our leading measure is our yearly employee engagement score.
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Through our achievements and actions in 2023, we continued to cultivate an inclusive culture, advance diverse representation across all levels of the organization, expand our community outreach and support, and remain committed to our pay equity strategy with on-going analysis and studies.
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Diverse Culture and Community: Cultivating an environment in which everyone works together, feels included, and has the opportunity to thrive has been a hallmark since our founding. In 2024, we continued to expand our engagement, development and community building efforts to further strengthen the experience of our global, dynamic employee base.
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In 2023, we: • Deepened the relationships of our senior leadership team by designating them as executive sponsors for each of our nine employee resource groups (iMatter teams) to focus on connection, awareness, advice, action, advocacy, and amplification of these communities. • Created Dinner and Dialogue series for our C-Suite to engage with, and learn directly from, small groups from our diverse communities represented by our iMatter teams as a way to enhance our Heritage month activities. • Hosted Women in Leadership summits in North America and India. • Revamped our sponsorship program, a key talent accelerator program, offering dedicated leadership coaching and C-suite exposure with sponsorship program participants focused on development and personal interests. • Launched the Women in India and Women of Color subcommunities to create spaces that specifically address the unique experiences and perspectives of women from diverse backgrounds.
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Specifically, we: • Launched an enterprise-wide leadership development program for analyst, associate and senior associate levels that consists of open group discussions and a robust curriculum designed to align with the company's core competencies, values, and leadership principles. • Expanded our Dinner and Dialogue series for our C-Suite to engage with, and learn directly from, small groups represented by our employee resource group (iMatter) teams as a way to build deeper connections. • Hosted our first iMatter leaders’ summit to enhance collaboration among teams, provide an opportunity to plan for 2025, and recognize the dedication and achievements of iMatter Team leaders. • Hosted the first integrated, open-access Women in Tech Summit in India marking an exciting expansion of the team's growth in that region, alongside a similar event in North America. • Launched the First Gen Professionals network to provide a space for individuals to explore their identity, connect with others, and share best practices and career development resources.
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Our Corporate Social Responsibility report reflects our efforts in support of the United Nations Sustainable Development Goals (“SDGs”), particularly the five goals that are integrally aligned with our values-driven culture and the work we do for our clients: good health and well-being, quality education, gender equality, decent work and economic growth, and climate action.
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COMPETITION The professional services industry is extremely competitive, highly fragmented, and constantly evolving.
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We actively seek to identify new business opportunities and frequently receive referrals and repeat business from past and current clients.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHowever, we may be unable to identify, hire, acquire, or successfully integrate new employees and acquired businesses without substantial expense, delay, or other operational or financial obstacles. From time to time, we will evaluate the total mix of 8 Table of Contents services we provide and we may conclude that businesses may not achieve the results we previously expected.
Biggest changeOur business strategy is dependent in part upon our ability to grow by hiring individuals or groups of individuals and by acquiring complementary businesses. However, we may be unable to identify, hire, acquire, or successfully integrate new employees and acquired businesses without substantial expense, delay, or other operational or financial obstacles.
The new operating model was designed to strengthen Huron's go-to-market strategy and support our growth. The full implementation across all areas of our business to effect this change may take place over several years. If we do not successfully implement and continue to refine this change to our operating model, our business and results of operation may be negatively impacted.
The new operating model was designed to strengthen Huron's go-to-market strategy and support our growth. The full implementation across all areas of our business to effect this change may take place over several years. If we do not continue to successfully implement and refine this change to our operating model, our business and results of operation may be negatively impacted.
The billing rates of our consultants that we are able to charge are also affected by a number of factors, including: • our clients’ perception of our ability to add value through our services; • the market demand for the services we provide; • an increase in the number of engagements in the government sector, which are subject to federal contracting regulations; • introduction of new services by us or our competitors; • our competition and the pricing policies of our competitors; and • current economic conditions.
The billing rates of our consultants that we are able to charge are also affected by a number of factors, including: • our clients’ perception of our ability to add value through our services; • the market demand for the services we provide; • an increase in the number of engagements in the government sector, which are subject to federal contracting regulations; • the introduction of new services by us or our competitors; • our competition and the pricing policies of our competitors; and • current economic conditions.
There is no assurance that the actual future earnings or cash flows of our reporting units will be consistent with our projections. We will monitor any changes to our assumptions and will evaluate goodwill as deemed warranted during future periods. Any significant decline in our operations could result in additional goodwill impairment charges.
There is no assurance that the actual future earnings or cash flows of our reporting units will be consistent with our projections. We will monitor any changes to our assumptions and will evaluate goodwill as deemed warranted during future periods. Any significant decline in our operations could result in goodwill impairment charges.
Our future success depends on our ability to adapt our services and infrastructure while continuing to improve the performance, features, and reliability of our services in response to the evolving demands of the marketplace. Adverse changes to our relationships with key third-party vendors or the business of our key third-party vendors could unfavorably impact our business.
Our future success depends on our ability to adapt our services and infrastructure while continuing to improve the performance, features, security, and reliability of our services in response to the evolving demands of the marketplace. Adverse changes to our relationships with key third-party vendors or the business of our key third-party vendors could unfavorably impact our business.
As we continue to grow and evolve, it might become increasingly difficult to maintain effective standards across a large enterprise and effectively institutionalize our knowledge or to effectively change the strategy, operations or culture of our Company in a timely manner.
As we continue to grow and evolve, it might become increasingly difficult to maintain effective standards across a large, global enterprise and effectively institutionalize our knowledge or to effectively change the strategy, operations or culture of our Company in a timely manner.
Access to our systems as a result of a security breach, the failure of our systems, or the loss of data could result in legal claims or proceedings, liability, or regulatory penalties and disrupt operations, which could adversely affect our business and financial results.
Unauthorized access to our systems as a result of a security breach, the failure of our systems, or the loss of data could result in legal claims or proceedings, liability, or regulatory penalties and disrupt operations, which could adversely affect our business and financial results.
Our international operations could result in additional risks. We operate both domestically and internationally, including in Canada, Europe, Asia and the Middle East. Although historically our international operations have been limited, we intend to continue to expand internationally.
Our international operations could result in additional risks. We operate both domestically and internationally, including in Canada, Europe, Asia, Australia and the Middle East. Although historically our international operations have been limited, we intend to continue to expand internationally.
When engagements are terminated or reduced, we lose the associated future revenues, and we may not be able to recover associated costs or redeploy the affected employees in a timely manner to minimize the negative impact.
When engagements are terminated or reduced, we lose the associated future revenues, and we may not be able to recover associated costs and investments or redeploy the affected employees in a timely manner to minimize the negative impact.
Such expansion may result in additional risks or increase the acuity of risks that are not present domestically and which could adversely affect our business or our results of operations, including: • compliance with additional U.S. regulations and those of other nations applicable to international operations; • cultural and language differences; • employment laws, including immigration laws affecting the mobility of employees, and rules and related social and cultural factors; 7 Table of Contents • losses related to start-up costs, lack of revenue, higher costs due to low utilization, and delays in purchase decisions by prospective clients; • currency fluctuations between the U.S. dollar and foreign currencies; • potentially adverse tax consequences and limitations on our ability to utilize losses generated in our foreign operations; • different regulatory requirements and other barriers to conducting business; • different or less stable political and economic environments; • greater personal security risks for employees traveling to or located in unstable locations; • health emergencies or pandemics, including COVID-19; and • civil disturbances or other catastrophic events.
Such expansion may result in additional risks or increase the acuity of risks that are not present domestically and which could adversely affect our business or our results of operations, including: 7 Table of Contents • compliance with additional U.S. regulations and those of other nations applicable to international operations; • cultural and language differences; • employment laws, including immigration laws affecting the mobility of employees, and rules and related social and cultural factors; • losses related to start-up costs, lack of revenue, higher costs due to low utilization, and delays in purchase decisions by prospective clients; • currency fluctuations between the U.S. dollar and foreign currencies; • potentially adverse tax consequences and limitations on our ability to utilize losses generated in our foreign operations; • different or more stringent regulatory requirements and other barriers to conducting business; • different or less stable political and economic environments; • greater personal security risks for employees traveling to or located in unstable locations; • health emergencies or pandemics; and • civil disturbances or other catastrophic events.
As of December 31, 2023, we have not recognized any credit allowance on our investment. In the future, if there are adverse developments in Shorelight's business that may be the result of events within or outside of Shorelight's control, we may incur impairment charges with respect to our convertible debt investment, which could materially impact our results of operations.
As of December 31, 2024, we have not recognized any credit allowance on our investment. In the future, if there are adverse developments in Shorelight's business that may be the result of events within or outside of Shorelight's control, we may incur impairment charges with respect to our convertible debt investment, which could materially impact our results of operations.
Utilization of our professionals is affected by a number of factors, including: • the number and size of client engagements; • the timing of the commencement, completion and termination of engagements, which in many cases is unpredictable; • our ability to transition our consultants efficiently from completed engagements to new engagements; • the hiring of additional consultants because there is generally a transition period for new consultants that results in a temporary drop in our utilization rate; 13 Table of Contents • the use of independent contractors as a substitute for hiring additional consultants; • unanticipated changes in the scope of client engagements; • our ability to forecast demand for our services and thereby maintain an appropriate level of consultants; and • conditions affecting the industries in which we practice as well as general economic conditions.
Utilization of our professionals is affected by a number of factors, including: • the number and size of client engagements; • the timing of the commencement, completion and termination of engagements, which in many cases is unpredictable; • our ability to transition our consultants efficiently from completed engagements to new engagements; • the hiring of additional consultants because there is generally a transition period for new consultants that results in a temporary drop in our utilization rate; • the use of independent contractors as a substitute for hiring additional consultants; • unanticipated changes in the scope of client engagements; • our ability to forecast demand for our services and thereby maintain an appropriate level of consultants; and • conditions affecting the industries in which we practice as well as general economic conditions.
As a result, we could be materially adversely affected by future changes in tax law or policy (or in their interpretation or enforcement) in the jurisdictions where we operate, including the United States, which could have a material adverse effect on our business, cash flow, results of operations, financial condition, as well as our effective income tax rate. ITEM 1B.
As a result, we could be materially adversely affected by future changes in tax law or policy (or in their interpretation or enforcement) in the jurisdictions where we operate, including the United States, which could have a material adverse effect on our business, cash flow, results of operations, financial condition, as well as our effective income tax rate.
If we fail to accurately anticipate the application of the laws and regulations affecting our clients and the industries they serve, if anticipated changes in regulation or regulatory uncertainty impact client buying patterns, or if such laws and regulations decrease our competitive position or limit the applicability of our service offerings, our results of operations and financial condition could be adversely impacted.
If we fail to accurately anticipate the application of the laws and regulations affecting our clients and the industries they serve, if anticipated changes in regulation or regulatory uncertainty impact client buying patterns, or if such laws,regulations, and executive actions decrease our competitive position or limit the applicability of our service offerings, our results of operations and financial condition could be adversely impacted.
If we default on our obligations under the Current Credit Agreement, our lenders could accelerate our indebtedness and may be able to exercise their liens on the equity interests subject to the Pledge Agreement and their liens on substantially all of our assets and the assets of our subsidiary grantors, which would have a material adverse effect on our business, operations, financial condition, and liquidity.
If we default on our obligations under the Amended Credit Agreement, our lenders could accelerate our indebtedness and may be able to exercise their liens on the equity interests subject to the Pledge Agreement and their liens on substantially all of our assets and the assets of our subsidiary grantors, which would have a material adverse effect on our business, operations, financial condition, and liquidity.
Other fluctuations in our results of operations may be due to a number of other factors, some of which are not within our control, including: • the timing and volume of client invoices processed and payments received, which may affect the fees payable to us under certain of our engagements; • client decisions regarding renewal or termination of their contracts; • the amount and timing of costs related to the development or acquisition of technologies or businesses; and • unforeseen legal expenses, including litigation and other settlement gains or losses.
Other fluctuations in our results of operations may be due to a number of other factors, some of which are not within our control, including: • the timing and volume of client invoices processed and payments received, which may affect the fees payable to us under certain of our engagements; • client decisions regarding renewal or termination of their contracts; • the amount and timing of costs related to the development or acquisition of technologies or businesses; and 14 Table of Contents • unforeseen legal expenses, including litigation and other settlement gains or losses.
To successfully manage growth, we must periodically adjust and strengthen our operating, financial, accounting, and other systems, procedures, and controls, which may increase our total costs and may adversely affect our operating income and our ability to sustain profitability if we do not generate increased revenues to offset the costs.
To successfully manage growth, we must periodically adjust and strengthen our operating, financial, accounting, and other systems, procedures, compliance practices and controls, which may increase our total costs and may adversely affect our operating income and our ability to sustain profitability if we do not generate increased revenues to offset the costs.
During 2023, 2022 and 2021, we did not record any impairment charges on our goodwill or other intangible assets. Determining the fair value of a reporting unit requires us to make significant judgments, estimates, and assumptions.
During 2024, 2023 and 2022, we did not record any impairment charges on our goodwill or other intangible assets. Determining the fair value of a reporting unit requires us to make significant judgments, estimates, and assumptions.
Pursuant to the Security Agreement and to secure our obligations under the Current Credit Agreement, we granted our lenders a first-priority lien, subject to permitted liens, on substantially all of the personal property assets that we and the subsidiary grantors own.
Pursuant to the Security Agreement and to secure our obligations under the Amended Credit Agreement, we granted our lenders a first-priority lien, subject to permitted liens, on substantially all of the personal property assets that we and the subsidiary grantors own.
In addition, unauthorized disclosure of sensitive or confidential client or employee data, whether through systems failure, employee negligence, including the misuse of AI, fraud, or misappropriation, could damage our reputation and cause us to lose clients and their related revenue in the future. 12 Table of Contents Our engagements could result in professional liability, which could be very costly and hurt our reputation.
In addition, unauthorized disclosure of sensitive or confidential client or employee data, whether through systems failure, employee negligence, including the misuse of AI, fraud, or misappropriation, could damage our reputation and cause us to lose clients and their related revenue in the future. Our engagements could result in professional liability, which could be very costly and hurt our reputation.
We have a Third Amended and Restated Security Agreement with Bank of America (the “Security Agreement”) and a Third Amended and Restated Pledge Agreement (the “Pledge Agreement”) associated with our Third Amended and Restated Credit Agreement, dated as of November 15, 2022 (as amended to date, the “Current Credit Agreement”).
We have a Third Amended and Restated Security Agreement with Bank of America (the “Security Agreement”) and a Third Amended and Restated Pledge Agreement (the “Pledge Agreement”) associated with our Third Amended and Restated Credit Agreement, dated as of November 15, 2022 (as amended to date, the “Amended Credit Agreement”).
If our quarterly or annual results of operations fall below the expectations of our annual and long-term forecasts, and therefore fall below the expectations of securities analysts or investors, the price of our common stock could decline substantially. 14 Table of Contents Revenues from our performance-based engagements are difficult to predict, and the timing and extent of recovery of our costs is uncertain.
If our quarterly or annual results of operations fall below the expectations of our annual and long-term forecasts, and therefore fall below the expectations of securities analysts or investors, the price of our common stock could decline substantially. Revenues from our performance-based engagements are difficult to predict, and the timing and extent of recovery of our costs is uncertain.
In addition, our clients’ ability to terminate engagements with little or no notice and without penalty makes it difficult to predict our operating results in any particular fiscal period. Conflicts of interest could preclude us from accepting engagements thereby causing decreased utilization and revenues.
In addition, our clients’ ability to terminate engagements with little or no notice and without penalty makes it difficult to predict our operating results in any particular fiscal period. 10 Table of Contents Conflicts of interest could preclude us from accepting engagements thereby causing decreased utilization and revenues.
The breadth and complexity of this infrastructure increases the potential risk of security breaches which could lead to potential unauthorized disclosure of confidential information. In providing services to clients, we may manage, utilize, and store sensitive or confidential client or employee data, including personal data and protected health information.
The breadth and complexity of this infrastructure increases the potential risk of security breaches which could lead to potential unauthorized disclosure of confidential information. 12 Table of Contents In providing services to clients, we may manage, utilize, and store sensitive or confidential client or employee data, including personal data and protected health information.
Our ability to refinance our current indebtedness or future indebtedness will depend on the 15 Table of Contents capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on the current indebtedness or future indebtedness.
Our ability to refinance our current indebtedness or future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on the current indebtedness or future indebtedness.
If the tax-exempt status of any of our clients is revoked or 9 Table of Contents compromised by new legislation or interpretation of existing legislation, that client’s financial health could be adversely affected, which could adversely impact demand for our services, our sales, revenue, financial condition, and results of operations.
If the tax-exempt status of any of our clients is revoked or compromised by new legislation or interpretation of existing legislation, that client’s financial health could be adversely affected, which could adversely impact demand for our services, our sales, revenue, financial condition, and results of operations.
There are many factors that could affect the purchasing practices, operations, and, ultimately, the operating funds of healthcare and education organizations, such as reimbursement policies for healthcare expenses, student loan policies or regulations, federal and state budgetary considerations, internal stakeholders’ views of engaging third-party consultants, consolidation in either industry, and regulation, litigation, and general economic conditions.
There are many factors that could affect the purchasing practices, operations, and, ultimately, the operating funds of healthcare and education organizations, such as reimbursement policies for healthcare and research-related expenses, student loan policies or regulations, federal and state budgetary considerations, increased taxes, internal stakeholders’ views of engaging third-party consultants, consolidation in either industry, and regulation, litigation, and general economic conditions.
In addition, despite the implementation of security measures, our infrastructure and operating systems, including the internet and related systems, may be vulnerable to physical break-ins, hackers, improper employee or contractor access, computer viruses, programming errors, denial-of-service attacks, cyberattacks created through AI, or other attacks by third parties seeking to disrupt operations or misappropriate information or similar physical or electronic breaches of security.
In addition, despite the implementation of security measures, our infrastructure and operating systems, including the internet and related systems, may be vulnerable to physical break-ins, hackers, improper employee or contractor access, computer viruses or malware, programming errors, denial-of-service attacks, cyberattacks, or other attacks by third parties seeking to disrupt operations or misappropriate information or similar physical or electronic breaches of security.
Due to the significant implementation issues arising under these laws and potential new legislation, it is unclear what long-term effects they will have on the healthcare industry and in turn on our business, financial condition, and results of operations.
Due to the significant implementation issues arising under these laws and potential new legislation or amendments to existing legislation, it is unclear what long-term effects they will have on the healthcare industry and in turn on our business, financial condition, and results of operations.
Tax rates in the jurisdictions in which we operate 17 Table of Contents may change as a result of macroeconomic and other factors outside of our control, making it increasingly difficult for multinational corporations like ourselves to operate with certainty about taxation in many jurisdictions.
Tax rates in the jurisdictions in which we operate may change as a result of macroeconomic and other factors outside of our control, making it increasingly difficult for multinational corporations like ourselves to operate with certainty about taxation in many jurisdictions.
We maintain certain insurance coverages for cybersecurity incidents through our directors and officers insurance policy, in amounts we believe to be reasonable and at a cost that is included in our general insurance premiums, but the policy limits and the breadth of coverage may be inadequate to cover any particular claim or all claims plus the cost of legal defense.
We maintain certain insurance coverages for cybersecurity incidents through our professional liability insurance policy, in amounts we believe to be reasonable and at a cost that is included in our general insurance premiums, but the policy limits and the breadth of coverage may be inadequate to cover any particular claim or all claims plus the cost of legal defense.
Similarly, certain of our healthcare and education clients may experience or anticipate experiencing financial distress or face complex challenges as a result of general economic conditions or operations-specific reasons. Such clients may not have the financial resources or stakeholder support to start new projects or to continue existing projects.
Similarly, certain of our healthcare and education clients may experience or anticipate experiencing financial distress or face complex challenges as a result of general economic conditions, operations-specific reasons or uncertainty in regulatory schemes. Such clients may not have the financial resources or stakeholder support to start new projects or to continue existing projects.
We have significant operations in India, including nearly 2,100 employees, which could subject the Company to country-specific risks or exacerbate certain other risks. For example, from time to time, India has experienced instances of civil unrest, terrorism and hostilities among neighboring countries.
We have significant operations in India, including approximately 2,650 employees, which could subject the Company to country-specific risks or exacerbate certain other risks. For example, from time to time, India has experienced instances of civil unrest, terrorism and hostilities among neighboring countries.
Our investment is carried at its fair value of $7.4 million as of December 31, 2023, with unrealized holding gains and losses reported in our results of operations when an observable price change for preferred stock issued by the company with similar rights and preferences to our preferred stock investment occurs.
Our investment is carried at its fair 16 Table of Contents value of $7.4 million as of December 31, 2024, with unrealized holding gains and losses reported in our results of operations when an observable price change for preferred stock issued by the company with similar rights and preferences to our preferred stock investment occurs.
For example, we provide services on engagements in which the impact on a client may substantially exceed the limits of our errors and omissions insurance coverage. If we are found to have professional liability with respect to work performed on such an engagement, we may not have sufficient insurance to cover the entire liability.
For example, we provide services on engagements in which the impact on a client may substantially exceed the limits of our professional liability insurance policy. If we are found to have professional liability with respect to work performed on such an engagement, we may not have sufficient insurance to cover the entire liability.
We rely heavily on our senior management team, our practice leaders, and other managing directors; our ability to retain them is particularly important to our future success.
We rely heavily on our senior management team, our industry and capability leaders, and other managing directors, and our ability to retain them is particularly important to our future success.
If during such evaluation it was determined that the fair value of our investment was below its carrying value, we would recognize an impairment for such difference, which could materially impact our results of operations. 16 Table of Contents General Risk Factors Expanding our service offerings may involve additional risks and may not be profitable.
If during such evaluation it was determined that the fair value of our investment was below its carrying value, we would recognize an additional unrealized loss for such difference, which could materially impact our results of operations. General Risk Factors Expanding our service offerings may involve additional risks and may not be profitable.
We have grown significantly since we commenced operations and have increased the number of our full-time professionals from 249 in 2002 to approximately 6,480 as of December 31, 2023. Additionally, our considerable growth has placed demands on our management and our internal systems, procedures,and controls and will continue to do so in the future.
We have grown significantly since we commenced operations and have increased the number of our full-time professionals from 249 in 2002 to approximately 7,230 as of December 31, 2024. Additionally, our considerable growth has placed demands on our management and our internal systems, procedures, and controls and will continue to do so in the future.
As a result, we are subject to numerous laws and regulations designed to protect this information, such as the U.S. federal and state laws governing the protection of health or other personally identifiable information, including the Health Insurance Portability and Accountability Act (HIPAA), and international laws such as the European Union's General Data Protection Regulation (GDPR), which went into effect in 2018.
As a result, we are subject to numerous laws and regulations designed to protect this information, such as the U.S. federal and state laws governing the protection of health or other personally identifiable information, including the Health Insurance Portability and Accountability Act (HIPAA), and international laws such as the European Union's General Data Protection Regulation (GDPR).
In addition, effective January 1, 2022, we made, and continue to make, changes to our operating model, including how we are organized as the needs and size of our business change, and if we do not successfully implement the changes, our business and results of operation may be negatively impacted.
In addition, effective January 1, 2022, we made, and continue to make, changes to our operating model, including how we are organized as the needs and size of our business change, and despite the operating model yielding positive synergies and impacts to date, if we do not continue to successfully implement the changes, our business and results of operation may be negatively impacted.
Furthermore, the inappropriate use of social networking sites or artificial intelligence (“AI”) by our employees could result in breaches of confidentiality, unauthorized disclosure of nonpublic company information or damage to our reputation.
Furthermore, the inappropriate use of social networking sites or AI by our employees could result in breaches of confidentiality, unauthorized disclosure of nonpublic company information or damage to our reputation.
While our investment in the company remains in a net unrealized gain position as of December 31, 2023, if there is further deterioration in the earnings performance, credit rating, or business prospects of the company, or a significant adverse change in the regulatory, economic, or technological environment of the company, we would evaluate our investment for additional impairment.
As of December 31, 2024, our investment in the company is in a net unrealized gain position. If there is significant deterioration in the earnings performance, credit rating, or business prospects of the company, or a significant adverse change in the regulatory, economic, or technological environment of the company, we would evaluate our investment for impairment.
Additionally, regulatory and legislative changes in these industries could reduce the demand for our services, decreasing our competitive position or potentially rendering certain of our service offerings obsolete, change client buying patterns or decision making or require us to make unplanned modifications to our service offerings, which could require additional time and investment.
Additionally, regulatory and legislative changes in these industries, or executive actions impacting these industries, could reduce the demand for our services, decrease our competitive position or potentially render certain of our service offerings obsolete, change client buying patterns or decision making or require us to make unplanned modifications to our service offerings, which could require additional time and investment.
Our total assets reflect a substantial amount of goodwill and other intangible assets. At December 31, 2023, goodwill and other intangible assets totaled $643.8 million, or 51%, of our total assets. Goodwill results from our business acquisitions, representing the excess of the fair value of consideration transferred over the fair value of the net assets acquired.
Our total assets reflect a substantial amount of goodwill and other intangible assets. At December 31, 2024, goodwill and other intangible assets totaled $704.8 million, or 52%, of our total assets. Goodwill results from our business acquisitions, representing the excess of the fair value of consideration transferred over the fair value of the net assets acquired.
Our investment is carried at its fair value of $68.0 million as of December 31, 2023, with unrealized holding gains and losses reported in other comprehensive income. As of December 31, 2023, our investment in Shorelight is in an unrealized gain position.
Our investment is carried at its fair value of $62.3 million as of December 31, 2024, with unrealized holding gains and losses reported in other comprehensive income. As of December 31, 2024, our investment in Shorelight is in an unrealized gain position.
These include: • fluctuations in U.S. and global economies; • the U.S. or global financial markets and the availability, costs, and terms of credit; • changes in laws and regulations; • political unrest, war, terrorism, geopolitical uncertainties, trade policies and sanctions, including the ongoing repercussions of the conflicts between Russia and Ukraine and Israel and Hamas; and • other economic factors and general business conditions, including inflation, rising interest rates, and the negative impact from the COVID-19 pandemic and its downstream impacts.
These include: • fluctuations in U.S. and global economies; • the U.S. or global financial markets and the availability, costs, and terms of credit; • changes in laws and regulations or uncertainty in regulatory schemes; • political unrest, war, terrorism, geopolitical uncertainties, trade policies and sanctions, including the ongoing repercussions of the conflicts between Russia and Ukraine and Israel and Hamas; and • other economic factors and general business conditions, including inflation and rising interest rates.
We will need to continue 11 Table of Contents to invest in technology in order to achieve redundancies necessary to prevent service interruptions.
We will need to continue to invest in technology in order to achieve redundancies necessary to prevent service interruptions.
Further, incorporating AI gives rise to litigation risk and risk of non-compliance and unknown cost of compliance, as AI is an emerging technology for which the legal and regulatory landscape is not fully developed (including potential liability for breaching intellectual property or privacy rights or laws).
While we have taken and are taking reasonable steps to prevent and mitigate risks, further incorporating AI gives rise to litigation risk and risk of non-compliance and unknown cost of compliance, as AI is an emerging technology for which the legal and regulatory landscape is not fully developed (including potential liability for breaching intellectual property or privacy rights or laws).
Litigation alleging that we performed negligently or breached any other obligations could expose us to significant legal liabilities and, regardless of outcome, is often very costly, could distract our management, could damage our reputation, and could harm our financial condition and operating results. We also face increased litigation risk as a result of an expanded workforce.
Litigation alleging that we performed negligently or breached any other obligations could expose us to significant legal liabilities and, regardless of the outcome, is often very costly, could distract our management, could damage our reputation, and could harm our financial condition and operating results.
A failure to comply with applicable regulations could result in regulatory enforcement actions as well as substantial civil and criminal penalties assessed against us and our employees.
Further, conducting business abroad subjects us to increased regulatory compliance and oversight. A failure to comply with applicable regulations could result in regulatory enforcement actions as well as substantial civil and criminal penalties assessed against us and our employees.
If one or more members of our senior management team or our other managing directors leave and we cannot replace them with a suitable candidate quickly, or if legal restrictions on non-competition agreements are put into place, we could experience difficulty in securing and successfully completing engagements, managing our business properly and executing on our growth strategy, which could harm our business prospects and results of operations. 6 Table of Contents If we are unable to hire and retain talented people in an industry where there is great competition for talent, it could have a serious negative effect on our prospects and results of operations.
If one or more members of our senior management team or our other managing directors leave and we 6 Table of Contents cannot replace them with a suitable candidate quickly, or if legal restrictions on non-competition agreements are put into place, we could experience difficulty in securing and successfully completing engagements, managing our business properly and executing on our growth strategy, which could harm our business prospects and results of operations.
In particular, we could be required to make unplanned modifications of our products and services (which would require additional time and investment) or we could suffer reductions in demand for our products and services as a result of changes in regulations affecting either industry, such as changes in the way that healthcare organizations are paid for their services (e.g., based on patient outcomes instead of services provided).
In particular, we could be required to make unplanned modifications of our products and services (which would require additional time and investment) or we could suffer reductions in demand for 9 Table of Contents our products and services as a result of changes in regulations affecting either industry, such as changes in the way that healthcare organizations are paid for their services (e.g., based on patient outcomes instead of services provided), changes to Medicare or Medicaid reimbursements, changes to cost rates or reimbursement rates applicable to research grants, or a decline in the level of federal or state grant spending in general.
Under the Current Credit Agreement, we are obligated to pay interest at either one, three or six month Term SOFR or an alternate base rate, in each case plus an applicable margin. The Current Credit Agreement replaced LIBOR with SOFR as the benchmark rate.
Under the Amended Credit Agreement, we are obligated to pay interest, at our option, at either one, three or six month Term SOFR or, in the case of the Revolver, at an alternate base rate, in each case plus an applicable margin.
Future changes in tax laws, treaties or regulations, and their interpretation or enforcement, may be unpredictable, particularly as taxing jurisdictions face an increasing number of political, budgetary and other fiscal challenges.
Future changes in tax laws, treaties or regulations, and their interpretation or enforcement, may be unpredictable, particularly as taxing jurisdictions face an increasing number of political, budgetary and other fiscal challenges. In the U.S., various proposals to change corporate income taxes are periodically considered.
If we are unable to achieve and maintain adequate overall utilization as well as maintain or increase the billing rates for our consultants, our financial results could materially suffer. Prior to the COVID-19 pandemic, most of our consultants performed services at the physical locations of our clients.
If we are unable to achieve and maintain adequate overall utilization as well as maintain or increase the billing rates for our consultants, our financial results could materially suffer.
Further, we must successfully maintain the right mix of professionals with relevant experience and skill sets as we continue to grow, as we expand into new service offerings, and as the market evolves.
Our success depends largely on our general ability to attract, develop, motivate, and retain highly skilled professionals. Further, we must successfully maintain the right mix of professionals with relevant experience and skill sets as we continue to grow, as we expand into new service offerings, and as the market evolves.
We could experience system failures, service interruptions, or security breaches that could negatively impact our business. Our organization is comprised of employees who work on matters throughout the United States and around the world. Our technology platform is a “virtual office” from which we all operate.
Our organization is comprised of employees who work on matters throughout the United States and around the world. Our technology platform is a “virtual office” from which we all operate.
We may incorporate AI solutions into our information platforms, products and services, and these technologies may become important to our operations over time. AI technologies are complex and rapidly evolving and the technologies that we use or develop may ultimately be flawed. Additionally, leveraging AI capabilities to potentially improve our information platforms, products and services presents further risks and challenges.
AI technologies are complex and rapidly evolving and the technologies that we use or develop may ultimately be flawed or we may be unable to leverage AI capabilities as quickly as the market and our clients demand. Additionally, leveraging AI capabilities to potentially improve our information platforms, products and services presents further risks and challenges.
We evaluate the financial condition of our clients and usually bill and collect on relatively short cycles. We have established allowances for losses of receivables and unbilled services.
Our business depends on our ability to successfully obtain payment from our clients for the amounts owed to us for work performed. We evaluate the financial condition of our clients and usually bill and collect on relatively short cycles. We have established allowances for losses of receivables and unbilled services.
As a professional services firm, our ability to secure new engagements depends heavily upon our reputation and the individual reputations of our professionals. Any factor that diminishes our reputation or that of our employees, including not meeting client expectations or misconduct by our employees, could make it substantially more difficult for us to attract new engagements and clients.
Any factor that diminishes our reputation or that of our employees, including association with certain clients or industries, not meeting client expectations or misconduct by our employees, could make it substantially more difficult for us to attract new engagements and clients.
Pursuant to the Pledge Agreement, we granted our lenders a security interest in 100% of the voting stock or other equity interests in our domestic subsidiaries and 65% of the voting stock or other equity interests in certain of our foreign subsidiaries.
Pursuant to the Pledge Agreement, we granted our lenders a security interest in 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 subsidiaries” (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.
Issues related to the use of artificial intelligence (“AI”) may result in reputational harm or liability that could adversely impact our business. As with many innovations, AI presents risks, challenges, and unintended consequences that could affect its adoption, and therefore our business.
For more information regarding the Company's cybersecurity risk management, see Item 1C of this Annual Report on Form 10-K. Issues related to the use of AI may result in reputational harm or liability that could adversely impact our business. As with many innovations, AI presents risks, challenges, and unintended consequences that could affect its adoption, and therefore our business.
These third-party vendors could terminate their relationship with us without cause and with little or no notice, which could limit our service offerings and harm our financial condition and operating results. In addition, if a third-party vendor’s business changes, is reduced, or fails to adapt to changing market demands, it could adversely affect our business.
These third-party vendors could terminate their relationship with us without cause and with little or no notice, which could limit our service offerings and harm our financial condition and operating results.
Entry into new or expanded lines of business may also subject us to new laws and regulations with which we are not familiar and may lead to increased litigation and regulatory risk. For example, our recently launched Huron Managed Services business within the Healthcare industry provides revenue cycle managed services to hospitals and health systems.
Entry into new or expanded lines of business may also subject us to new laws and regulations with which we are not familiar and may lead to increased litigation and regulatory risk.
Competition for future hiring and acquisition opportunities in our markets could increase the compensation we offer to potential employees or the prices we pay for businesses we wish to acquire.
From time to time, we will evaluate the total mix of services we provide and we may conclude that businesses may not achieve the results we previously expected. Competition for future hiring and acquisition opportunities in our markets could increase the compensation we offer to potential employees or the prices we pay for businesses we wish to acquire.
If another company were to successfully challenge our right to use our name, or if we were unable to prevent a competitor from using a name that is similar to our name, our ability to build brand identity could be negatively impacted.
If another company were to successfully challenge our right to use our name, or if we were unable to prevent a competitor from using a name that is similar to our name, our ability to build brand identity could be negatively impacted. 13 Table of Contents Risks Related to Financial Management and Performance Our financial results could suffer if we are unable to achieve or maintain adequate utilization and suitable billing rates for our consultants.
We are subject to income and other taxes in the U.S. at the state and federal level and also in foreign jurisdictions. Changes in applicable U.S. state, federal or foreign tax laws and regulations, or their interpretation and application, could materially affect our tax expense and profitability.
Changes in applicable U.S. state, federal or foreign tax laws and regulations, or their interpretation and application, could materially affect our tax expense and profitability. The overall tax environment remains uncertain and increasingly complex.
As we continue to grow our operations in India, more of our expenses will be incurred in the Indian rupee. An increase in the value of the Indian rupee against the U.S. dollar, in which our revenue is primarily recorded, could increase costs for delivery of services and decrease the profitability of our engagements that utilize our employees in India.
An increase in the value of the Indian rupee against the U.S. dollar, in which our revenue is primarily recorded, could increase costs for delivery of services and decrease the profitability of our engagements that utilize our employees in India. 8 Table of Contents Additional hiring, departures, and business acquisitions and dispositions, as well as other organizational changes, could disrupt our operations, increase our costs or otherwise harm our business.
In addition, certain of our engagements, including interim management engagements and corporate restructurings, involve greater risks than other consulting engagements. We are not always able to include provisions in our engagement agreements that are designed to limit our exposure to legal claims relating to our services.
We are not always able to include provisions in our engagement agreements that are designed to limit our exposure to legal claims relating to our services.
In addition, if we experience an increase in the time to bill and collect for our services, our cash flows could be adversely affected. Changes in U.S. tax laws could have a material adverse effect on our business, cash flow, results of operations and financial condition.
In addition, if we experience an increase in the time to bill and collect for our services, our cash flows could be adversely affected.
In addition, the covenants contained in the Current Credit Agreement impose restrictions on our ability to engage in certain activities, such as the incurrence of additional indebtedness, certain investments, certain acquisitions and dispositions, and the payment of dividends.
In addition, the covenants contained in the Amended Credit Agreement impose restrictions on our ability to engage in certain activities, such as the incurrence of additional indebtedness, certain investments, certain acquisitions and dispositions, and the payment of dividends. 15 Table of Contents Our indebtedness could adversely affect our ability to raise additional capital to fund our operations and obligations, expose us to interest rate risk to the extent of our variable-rate debt, and adversely affect our financial results.
We are not able to predict the positive or negative effects that future events or changes to the U.S. or global economy, financial markets, or regulatory and business environment could have on our operations. Furthermore, as 2024 is a presidential election year, the magnitude of any such positive or negative effects is even more uncertain.
We are not able to predict the positive or negative effects that future events or changes to the U.S. or global economy, financial markets, or regulatory and business environment could have on our operations. If we are unable to collect our receivables or unbilled services, our results of operations, financial condition, and cash flows could be adversely affected.
In 2019, we invested $5.0 million, in the form of preferred stock, in a hospital-at-home company.
In 2019, we invested $5.0 million, in the form of preferred stock, in a hospital-at-home company. Since our initial investment, we have recognized cumulative unrealized gains of $28.6 million and cumulative unrealized losses of $26.3 million.
As of December 31, 2023, the senior secured credit facility consists of a $600 million revolving credit facility under which we had outstanding indebtedness of $324.0 million that becomes due and payable in full upon maturity on November 15, 2027. Additionally, in February 2024, we established a $275 million term loan facility under the senior secured credit facility.
As of December 31, 2024, we have a $600 million senior secured revolving credit facility (the “Revolver”) and a $275 million senior secured term loan facility (the “Term Loan”), both of which fully mature on November 15, 2027.
If we are unable to accept new engagements for any reason, our consultants may become underutilized, which would adversely affect our revenues and results of operations in future periods. 10 Table of Contents Our ability to maintain and attract new business depends upon our reputation, the professional reputation of our revenue-generating employees, and the quality of our services.
If we are unable to accept new engagements for any reason or must withdraw from an existing engagement as a result of an emerging or undetected conflict of interest, our consultants may become underutilized, which would adversely affect our revenues and results of operations in future periods.
Our ability to make scheduled payments of the principal, to pay interest, or to refinance our indebtedness, depends on our future performance.
As of December 31, 2024, we had outstanding indebtedness of $357.7 million, of which $93.0 million was outstanding under the Revolver and $264.7 million was outstanding under the Term Loan. Our ability to make scheduled payments of the principal, to pay interest, or to refinance our indebtedness, depends on our future performance.
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Our business involves the delivery of professional services and is highly labor-intensive. Our success depends largely on our general ability to attract, develop, motivate, and retain highly skilled professionals.
Added
If we are unable to hire and retain talented people in an industry where there is great competition for talent, it could have a serious negative effect on our prospects and results of operations. Our business involves the delivery of professional services and is highly labor-intensive.
Removed
Further, conducting business abroad subjects us to increased regulatory compliance and oversight. For example, we are subject to laws prohibiting certain payments to governmental officials, such as the Foreign Corrupt Practices Act, which increases the risk from our international operations relative to our competitors who do not operate outside the United States.
Added
As we continue to grow our operations in India, more of our expenses will be incurred in the Indian rupee.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+1 added−1 removed3 unchanged
Biggest changeS uch providers are subject to an onboarding process and may be reevaluated periodically, such as upon detection of an increase in risk profile. We use a variety of inputs in such risk assessments, including information supplied by providers and third parties. In addition, our service providers adhere to mutually agreed upon security requirements, controls and responsibilities.
Biggest changeOur risk management program also assesses risks associated with third-party service providers. S uch providers are subject to an onboarding process and may be reevaluated periodically. We use a variety of inputs in such risk assessments, including information supplied by the providers themselves and other third parties.
We use various mechanisms to preempt, detect and monitor cybersecurity threats, including monitoring unusual network activity, conducting annual security awareness training for employees, deploying phishing test campaigns, maintaining containment and incident response tools, and reviewing, updating and improving our Incident Response Plan annually. We also conduct tabletop exercises to simulate responses to cybersecurity incidents.
We use various mechanisms to detect and monitor cybersecurity threats, including monitoring unusual network activity, conducting annual security awareness training for employees, deploying phishing test campaigns, maintaining containment and incident response tools, and reviewing, updating and improving our Incident Response Plan annually. We also conduct tabletop exercises to simulate responses to cybersecurity incidents.
Our CIO reports on a quarterly basis to Huron's internal Information Security Management System (“ISMS”) Committee, which has primary responsibility for assessing and managing material cybersecurity risks.
Our CIO reports on a quarterly basis to Huron's internal Information Security Management System (“ISMS”) Committee, which has the primary responsibility for assessing and managing material cybersecurity risks.
“Risk Factors.” We have an enterprise-wide cybersecurity strategy that focuses on implementing risk-based controls, technologies, and other processes. We aim to incorporate industry best practices throughout our cybersecurity program, including the frameworks established by the National Institute of Standards and Technology (“NIST”), the Cybersecurity and Infrastructure Security Agency (“CISA”), and other applicable industry standards.
“Risk Factors.” We have a cybersecurity program that focuses on implementing risk-based controls, technologies, and other processes. We aim to incorporate industry best practices throughout our cybersecurity program, including the frameworks established by the National Institute of Standards and Technology (“NIST”), the Cybersecurity and Infrastructure Security Agency (“CISA”), and other applicable industry standards.
Prior to joining Huron in 2018, our CIO served in various information security and information technology roles in the professional services industry for several large, public companies and executed large-scale, global implementations of business applications and infrastructure technologies in a way that mitigates cybersecurity risks.
Prior to joining Huron in 2018, our CIO served in various information security and information technology roles in the professional services industry for several large, public companies and executed large-scale, global implementations of business applications and infrastructure technologies in a manner designed to mitigate cybersecurity risks.
To augment our in-house capabilities, we leverage expertise from professional services firms and/or outside counsel, as needed, to assess our cybersecurity controls, and collaborate on an ever-changing landscape. Our cybersecurity program is verified as conforming with ISO/IEC 27001:2013 and our most recent recertification was in 2023.
To augment our in-house capabilities, we leverage expertise from professional services firms and/or outside counsel, as needed, to assess our cybersecurity controls, and collaborate on an ever-changing landscape. Our cybersecurity program conforms with ISO/IEC 27001:2022 and our most recent recertification was in 2024.
Our board of directors, in coordination with the board of director’s Technology and Information Security (“T&IS”) Committee, oversees the governance of the Company’s technology-related risks, including information security, data protection, cybersecurity, vendor, fraud, and business continuity risks, and technology-related strategies.
Our board of directors, in coordination with its T&IS Committee, oversees the governance of the Company’s technology-related risks, including information security, data protection, cybersecurity, vendor, fraud, and business continuity risks, and technology-related strategies.
The T&IS Committee receives quarterly updates from the CIO, including existing and new cybersecurity risks, the management and/or mitigation of such risks, material cybersecurity incidents (if any), and status on key cybersecurity initiatives.
The T&IS Committee receives quarterly updates from the CIO, including existing and new cybersecurity risks, the management and/or mitigation of such risks, material cybersecurity incidents (if any), and status on key cybersecurity initiatives. Our board also actively participates in discussions with management on cybersecurity-related news events and discusses any updates to our cybersecurity risk management and strategy programs.
These risks include, among other things: operational risks, malicious attacks, improper employee or contractor access, harm to employees or customers and violation of data privacy, intellectual property or security laws.
Our cybersecurity risk management function is a component of our overall approach to risk management, including coordination with our Enterprise Risk Management Committee. Our cybersecurity risks include, among other things: operational risks, malicious attacks, improper employee or contractor access, harm to employees or customers and violation of data privacy, intellectual property or security laws.
During these exercises, our team of cybersecurity professionals collaborate with technical and business stakeholders across the organization to further analyze the risk to the company and form detection, mitigation, and remediation improvements. Our risk management program also assesses risks associated with third-party service providers.
During these exercises, our team of cybersecurity professionals collaborate with technical and business stakeholders across the organization to further analyze the risk to the company and form detection, mitigation, and remediation improvements. We also engage third parties, including assessors, consultants, and auditors to assess our cybersecurity control environment and to test the vulnerability of our cybersecurity infrastructure at least annually.
Cybersecurity Governance Our cybersecurity program is overseen by the leaders of our Information Security functional team, which is led by our Chief Information Officer (“CIO”) who has nearly 30 years of relevant work experience.
In addition, our contracts with our service providers require them to adhere to mutually agreed upon security requirements, controls and responsibilities, as applicable. 18 Table of Contents Cybersecurity Governance Our cybersecurity program is overseen by the leaders of our Information Security functional team, which is led by our Chief Information Officer (“CIO”) who has over 30 years of relevant work experience.
Removed
Our board also actively participates in discussions with management on cybersecurity-related news events and discusses any updates to our cybersecurity risk management and strategy programs on a timely basis. 18 Table of Contents
Added
Accordingly, the company takes a comprehensive approach to identifying and managing cybersecurity risks that involves the company's Information Security functional team, senior management, and our board of directors in coordination with the Technology and Information Security (“T&IS”) Committee and the Audit Committee of our board of directors.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 19 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 19 Item 6. [Reserved] 20 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 38 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 19 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 19 Item 6. [Reserved] 20 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 39 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+3 added−1 removed2 unchanged
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans The information required by this item appears under Part III—Item 12.
Biggest change“Management's Discussion and Analysis of Financial Condition and Results of Operations” for further information on the restricted payment provisions of our senior secured credit facility. 19 Table of Contents Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item appears under Part III—Item 12.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is traded on the NASDAQ Global Select Market under the symbol “HURN.” As of February 20, 2024, there were 313 registered holders of record of Huron’s common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “HURN.” As of February 18, 2025, there were 298 registered holders of record of Huron’s common stock.
During the quarter ended December 31, 2023, we reacquired 4,686 shares of common stock with a weighted average fair market value of $103.71 as a result of such tax withholdings. 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.
During the quarter ended December 31, 2024, we reacquired 5,614 shares of common stock with a weighted average fair market value of $111.81 as a result of such tax withholdings. 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.
Additionally, 4,166 shares in October and 520 shares in November were repurchased to satisfy employee tax withholding requirements. These shares do not reduce the repurchase authority under the Share Repurchase Program. (2) As of the end of the period.
Additionally, 3,972 shares in October, 674 shares in November and 968 shares in December were repurchased to satisfy employee tax withholding requirements. These shares do not reduce the repurchase authority under the Share Repurchase Program. (2) As of the end of the period.
In addition, the amount of dividends we may pay is subject to the restricted payment provisions of our senior secured credit facility. See the Liquidity and Capital Resources section under Part II—Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” for further information on the restricted payment provisions of our senior secured credit facility.
In addition, the amount of dividends we may pay is subject to the restricted payment provisions of our senior secured credit facility. See the Liquidity and Capital Resources section under Part II—Item 7.
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, of which $86.2 million remains available as of December 31, 2023.
The share repurchase program has been subsequently extended and increased, most recently in the second quarter of 2024. The current authorization extends the share repurchase program through December 31, 2025 with a repurchase amount of $500 million, of which $64.5 million remained available as of December 31, 2024.
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. 19 Table of Contents The following table provides information with respect to purchases we made of our common stock during the year ended December 31, 2023.
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.
“Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.” Purchases of Equity Securities by the Issuer and Affiliated Purchasers Our Stock Ownership Participation Program and 2012 Omnibus Incentive Plan permit the netting of common stock upon vesting of restricted stock awards to satisfy individual tax withholding requirements.
The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction by an issuer not involving a public offering. Our Stock Ownership Participation Program and 2012 Omnibus Incentive Plan permit the netting of common stock upon vesting of restricted stock awards to satisfy individual tax withholding requirements.
Removed
Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (2) First quarter total 768,314 $ 69.68 632,894 $ 64,836,694 Second quarter total 196,166 $ 78.66 193,648 $ 49,602,177 Third quarter total 294,108 $ 98.07 290,288 $ 21,072,842 October 1, 2023 – October 31, 2023 76,247 $ 99.31 72,081 $ 113,932,607 November 1, 2023 – November 30, 2023 94,090 $ 103.35 93,570 $ 104,256,878 December 1, 2023 – December 31, 2023 179,334 $ 100.75 179,334 $ 86,183,114 Fourth quarter total 349,671 $ 101.14 344,985 $ 86,183,114 Full year 2023 total 1,608,259 $ 82.81 1,461,815 $ 86,183,114 (1) The number of shares repurchased in the first, second and third quarters of 2023 included 135,420, 2,518, and 3,820 shares, respectively, to satisfy employee tax withholding requirements.
Added
“Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.” Purchases of Equity Securities by the Issuer and Affiliated Purchasers On December 2, 2024, as partial consideration for our acquisition of AXIA Consulting, we issued 98,156 shares of our common stock, par value $0.01 per share, with an aggregate value of $12.2 million.
Added
The following table provides information with respect to purchases we made of our common stock during the year ended December 31, 2024.
Added
Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (2) First quarter total 837,443 $ 99.24 624,698 $ 23,987,379 Second quarter total 378,120 $ 90.40 376,493 $ 89,948,343 Third quarter total 70,168 $ 109.23 66,354 $ 82,659,698 October 1, 2024 – October 31, 2024 35,918 $ 115.25 31,946 $ 78,947,424 November 1, 2024 – November 30, 2024 25,308 $ 118.45 24,634 $ 76,028,121 December 1, 2024 – December 31, 2024 95,277 $ 122.05 94,309 $ 64,517,348 Fourth quarter total 156,503 $ 119.91 150,889 $ 64,517,348 Full year 2024 total 1,442,234 $ 99.65 1,218,434 $ 64,517,348 (1) The number of shares repurchased in the first, second and third quarters of 2024 included 212,745 shares, 1,627 shares, and 3,814 shares, respectively, to satisfy employee tax withholding requirements.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

138 edited+51 added−29 removed67 unchanged
Biggest changeWe 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. 26 Table of Contents Non-GAAP Measures Reconciliation of Net Income to EBITDA and Adjusted EBITDA Year Ended December 31, 2023 2022 2021 Revenues $ 1,362,060 $ 1,132,455 $ 905,640 Net income $ 62,479 $ 75,552 $ 62,987 Add back: Income tax expense 21,416 33,025 17,049 Interest expense, net of interest income 19,573 11,883 8,150 Depreciation and amortization 25,672 28,233 26,347 Earnings before interest, taxes, depreciation and amortization (EBITDA) 129,140 148,693 114,533 Add back: Restructuring charges 11,550 9,909 12,401 Other losses (gains), net (444) (193) 198 Transaction-related expenses 357 50 1,782 Unrealized loss (gain) on preferred stock investment 26,262 (26,964) — Gain on sale of business — — (31,510) Foreign currency transaction losses (gains), net 476 (655) 419 Adjusted EBITDA $ 167,341 $ 130,840 $ 97,823 Adjusted EBITDA as a percentage of revenues 12.3 % 11.6 % 10.8 % Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted Earnings per Share Year Ended December 31, 2023 2022 2021 Net income $ 62,479 $ 75,552 $ 62,987 Weighted average shares - diluted 19,601 20,746 21,809 Diluted earnings per share $ 3.19 $ 3.64 $ 2.89 Add back: Amortization of intangible assets 8,219 11,198 9,251 Restructuring charges 11,550 9,909 12,401 Other losses (gains), net (444) (193) 198 Transaction-related expenses 357 50 1,782 Unrealized loss (gain) on preferred stock investment 26,262 (26,964) — Gain on sale of business — — (31,510) Tax effect of adjustments (12,175) 1,590 1,742 Total adjustments, net of tax 33,769 (4,410) (6,136) Adjusted net income $ 96,248 $ 71,142 $ 56,851 Adjusted weighted average shares - diluted 19,601 20,746 21,809 Adjusted diluted earnings per share $ 4.91 $ 3.43 $ 2.61 27 Table of Contents Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues Revenues by segment and capability for the years ended December 31, 2023 and 2022 were as follows: Revenues (in thousands) Year Ended December 31, Increase / (Decrease) 2023 2022 $ % Segment: Healthcare $ 673,989 $ 534,999 $ 138,990 26.0 % Education 429,663 359,835 69,828 19.4 % Commercial 258,408 237,621 20,787 8.7 % Total revenues $ 1,362,060 $ 1,132,455 $ 229,605 20.3 % Capability: Consulting and Managed Services $ 782,020 $ 637,994 $ 144,026 22.6 % Digital 580,040 494,461 85,579 17.3 % Total revenues $ 1,362,060 $ 1,132,455 $ 229,605 20.3 % Total revenues increased $229.6 million, or 20.3%, to $1.36 billion for the year ended December 31, 2023 from $1.13 billion for the year ended December 31, 2022.
Biggest changeNon-GAAP Measures Reconciliation of Net Income to EBITDA and Adjusted EBITDA Year Ended December 31, 2024 2023 2022 Revenues before reimbursable expenses $ 1,486,085 $ 1,362,060 $ 1,132,455 Reimbursable expenses 35,720 36,695 26,506 Total revenues $ 1,521,805 $ 1,398,755 $ 1,158,961 Net income $ 116,626 $ 62,479 $ 75,552 Net income as a percentage of total revenues 7.7 % 4.5 % 6.5 % Add back: Income tax expense 37,390 21,416 33,025 Interest expense, net of interest income 25,347 19,573 11,883 Depreciation and amortization 25,663 25,672 28,233 EBITDA 205,026 129,140 148,693 Add back: Restructuring charges 9,913 11,550 9,909 2024 litigation settlement gain (11,701) — — Other losses (gains), net 804 (444) (193) Transaction-related expenses 2,861 357 50 Unrealized loss (gain) on preferred stock investment — 26,262 (26,964) Gain on sale of business (3,597) — — Foreign currency transaction losses (gains), net (2,138) 476 (655) Adjusted EBITDA $ 201,168 $ 167,341 $ 130,840 Adjusted EBITDA as a percentage of revenues before reimbursable expenses 13.5 % 12.3 % 11.6 % 27 Table of Contents Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted Earnings per Share Year Ended December 31, 2024 2023 2022 Net income $ 116,626 $ 62,479 $ 75,552 Weighted average shares - diluted 18,613 19,601 20,746 Diluted earnings per share $ 6.27 $ 3.19 $ 3.64 Add back: Amortization of intangible assets 6,517 8,219 11,198 Restructuring charges 9,913 11,550 9,909 2024 litigation settlement gain (11,701) — — Other losses (gains), net 804 (444) (193) Transaction-related expenses 2,861 357 50 Unrealized loss (gain) on preferred stock investment — 26,262 (26,964) Gain on sale of business (3,597) — — Tax effect of adjustments (977) (12,175) 1,590 Total adjustments, net of tax 3,820 33,769 (4,410) Adjusted net income $ 120,446 $ 96,248 $ 71,142 Adjusted weighted average shares - diluted 18,613 19,601 20,746 Adjusted diluted earnings per share $ 6.47 $ 4.91 $ 3.43 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenues before Reimbursable Expenses Revenues before reimbursable expenses by segment and capability for the years ended December 31, 2024 and 2023 were as follows: Revenues before Reimbursable Expenses (in thousands) Year Ended December 31, Increase / (Decrease) 2024 2023 $ % Segment: Healthcare $ 756,263 $ 673,989 $ 82,274 12.2 % Education 474,221 429,663 44,558 10.4 % Commercial 255,601 258,408 (2,807) (1.1) % Total revenues before reimbursable expenses $ 1,486,085 $ 1,362,060 $ 124,025 9.1 % Capability: Consulting and Managed Services $ 863,859 $ 782,020 $ 81,839 10.5 % Digital 622,226 580,040 42,186 7.3 % Total revenues before reimbursable expenses $ 1,486,085 $ 1,362,060 $ 124,025 9.1 % Revenues before reimbursable expenses increased $124.0 million, or 9.1%, to $1.49 billion for the year ended December 31, 2024 from $1.36 billion for the year ended December 31, 2023.
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 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.
Losses (gains) on sales of businesses: We exclude the effect of non-operating losses and gains recognized as a result of sales of businesses as they are infrequent, management believes that these items are not indicative of the ongoing performance of our business, and their exclusion permits comparability with periods that were not impacted by such items.
Losses (gains) on sale of business: We exclude the effect of non-operating losses and gains recognized as a result of sales of businesses as they are infrequent, management believes that these items are not indicative of the ongoing performance of our business, and their exclusion permits comparability with periods that were not impacted by such items.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Management's Discussion and Analysis of Financial Condition and Results of Operations ( “ MD&A ” ) should be read in conjunction with our Consolidated Financial Statements and related notes appearing under Part II—Item 8.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. This Management's Discussion and Analysis of Financial Condition and Results of Operations ( “ MD&A ” ) should be read in conjunction with our Consolidated Financial Statements and related notes appearing under Part II—Item 8.
A reporting unit is an operating segment or one level below an operating segment (referred to as a component) to which goodwill is assigned when initially recorded. We assign goodwill to reporting units based on our integration plans and the expected synergies resulting from the acquisition. As of December 31, 2023, we have three reporting units: Healthcare, Education, and Commercial.
A reporting unit is an operating segment or one level below an operating segment (referred to as a component) to which goodwill is assigned when initially recorded. We assign goodwill to reporting units based on our integration plans and the expected synergies resulting from the acquisition. As of December 31, 2024, we have three reporting units: Healthcare, Education, and Commercial.
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.
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 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.
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 include restructuring charges, other gains and losses, depreciation expense, and amortization expense related to internally developed software costs and 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.
Net cash used in investing activities was $36.7 million for 2023 which primarily consisted of $25.7 million for payments related to internally developed software to advance our Healthcare and Education software products; $9.4 million for purchases of property and equipment, primarily related to purchases of computers and related equipment and leasehold improvements for certain office spaces; $3.1 million for contributions to our life insurance policies; and $1.6 million for the purchase of a business.
Net cash used in investing activities was $36.7 million for 2023 which primarily consisted of $25.7 million for payments related to internally developed software to advance our Healthcare and Education software products; $9.4 million for purchases of property and equipment, 33 Table of Contents primarily related to purchases of computers and related equipment and leasehold improvements for certain office spaces; $3.1 million for contributions to our life insurance policies; and $1.6 million for the purchase of a business.
For purposes of the Consolidated Leverage Ratio, total debt is on a gross basis and is not netted against our cash balances. At December 31, 2023 and December 31, 2022, we were in compliance with these financial covenants.
For purposes of the Consolidated Leverage Ratio, total debt is on a gross basis and is not netted against our cash balances. At December 31, 2024 and December 31, 2023, we were in compliance with these financial covenants.
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 generate our revenues before reimbursable expenses 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.
Also included in selling, general and administrative expenses is 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.
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.
We evaluate our intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. No impairment charges for intangible assets were recorded in 2023.
We evaluate our intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. No impairment charges for intangible assets were recorded in 2024.
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.
The 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.
We estimate that cash utilized for purchases of property and equipment and software development in 2024 will total approximately $35 million to $40 million; primarily consisting of software development costs, leasehold improvements and furniture and fixtures for certain office locations and information technology related equipment to support our corporate infrastructure. 32 Table of Contents Financing Activities Our financing activities primarily consist of borrowings and repayments under our senior secured credit facility, share repurchases, shares redeemed for employee tax withholdings upon vesting of share-based compensation, and payments for contingent consideration liabilities related to business acquisitions.
We estimate that cash utilized for purchases of property and equipment and software development in 2025 will total approximately $35 million to $40 million; primarily consisting of software development costs, information technology-related equipment to support our corporate infrastructure, and leasehold improvements and furniture and fixtures for certain office locations Financing Activities Our financing activities primarily consist of borrowings and repayments under our senior secured credit facility, share repurchases, shares redeemed for employee tax withholdings upon vesting of share-based compensation, and payments for contingent consideration liabilities related to business acquisitions.
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.
Revenues before reimbursable expenses 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 utilize a discounted cash flow analysis, which involves estimating the expected after-tax cash flows that will be generated by each reporting unit and then discounting those cash flows to present value, reflecting the relevant risks associated with each reporting unit and the time value of money.
In the income approach, we utilize a discounted cash flow analysis, which involves estimating the expected after-tax cash flows that will be generated by each reporting unit and then discounting those cash flows to present value, reflecting the relevant risks associated with each reporting unit and the time value of money.
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.
The Term Loan is subject to scheduled quarterly amortization payments of $3.4 million which began June 30, 2024 and continue through the maturity date of November 15, 2027, at which time the outstanding principal balance and all accrued interest will be due.
The following information summarizes our results of operations for 2023, 2022 and 2021; and discusses those results of operations for 2023 compared to 2022. For a discussion of our results of operations for 2022 compared to 2021 refer to Part II—Item 7.
The following information summarizes our results of operations for 2024, 2023 and 2022; and discusses those results of operations for 2024 compared to 2023. For a discussion of our results of operations for 2023 compared to 2022 refer to Part II—Item 7.
For a discussion of certain risks and uncertainties related to the Current Credit Agreement, see Part I—Item 1A. “Risk Factors.” 34 Table of Contents Future Financing Needs Our primary financing need is to fund our long-term growth.
For a discussion of certain risks and uncertainties related to the Current Credit Agreement, see Part I—Item 1A. “Risk Factors.” Future Financing Needs Our primary financing need is to fund our long-term growth.
Fees and interest on borrowings under the revolving credit facility 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 an alternate base rate, in each case plus the applicable margin.
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.
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.
COMPONENTS OF OPERATING RESULTS Total Revenues Revenues before Reimbursable Expenses Revenues before reimbursable expenses 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.
Share Repurchase Program 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.
Share Repurchase Program 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 second quarter of 2024.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of the Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the United States Securities and Exchange Commission on February 28, 2023.
“ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of the Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the United States Securities and Exchange Commission on February 27, 2024.
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.
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, excluding the 2024 litigation settlement gain presented separately, to permit comparability with periods that are not impacted by these items.
These expenses are also 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 are also included as a component of operating 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 are also included as a component of operating expenses.
The increases in compensation costs for our revenue-generating professionals and support personnel were primarily driven by an increase in headcount, annual salary increases that went into effect in the first quarter of 2023, an increase in performance bonus expense, and an increase in share-based compensation expense.
The increases in compensation costs for our revenue-generating professionals and support personnel were primarily driven by an increase in headcount and annual salary increases that went into effect in the first quarter of 2024; partially offset by decreases in performance bonus expense and share-based compensation expense for our revenue-generating professionals.
These borrowings carried a weighted average interest rate of 4.2% at December 31, 2023 and 3.8% at December 31, 2022 including the impact of the interest rate swaps described in Note 12 “Derivative Instruments and Hedging Activity" within the notes to the consolidated financial statements.
These borrowings carried a weighted average interest rate of 4.7% at December 31, 2024 and 4.2% at December 31, 2023 including the impact of the interest rate swaps described in Note 12 “Derivative Instruments and Hedging Activity" within the notes to the consolidated financial statements.
Our intangible assets, net of accumulated amortization, totaled $18.1 million at December 31, 2023 and primarily consist of customer relationships, technology and software, trade names, and non-competition agreements, all of which were acquired through business combinations.
Our intangible assets, net of accumulated amortization, totaled $26.1 million at December 31, 2024 and primarily consist of customer relationships, technology and software, trade names, customer contracts, and non-competition agreements, all of which were acquired through business combinations.
The borrowing capacity under the Amended Credit Agreement is reduced by any outstanding borrowings under the agreement and outstanding letters of credit. At December 31, 2023 and 2022, we had outstanding letters of credit totaling $0.5 million and $0.7 million, respectively, which are used as security deposits for our office facilities.
The borrowing capacity under the Revolver is reduced by any outstanding borrowings under the agreement and outstanding letters of credit. At December 31, 2024 and 2023, we had outstanding letters of credit totaling $0.4 million and $0.5 million, respectively, which are used as security deposits for our office facilities.
Based upon the performance of the Company against those key performance indicators in each Reference Year (as defined in the First 33 Table of Contents Amendment), certain adjustments to the otherwise applicable rates for interest, commitment fees and letter of credit fees will be made.
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, 34 Table of Contents commitment fees and letter of credit fees will be made.
These payments were primarily the result of achieving specified financial performance targets in accordance with the related purchase agreements. These uses of cash for financing activities were partially offset by $1.4 million of cash received from stock option exercises in 2022.
These payments were primarily the result of achieving specified financial performance targets in accordance with the related purchase agreements. These uses of cash for financing activities were partially offset by $2.5 million of cash received from stock option exercises in 2023.
These uses of cash for investing activities were partially offset by $3.0 million of cash received for distributions from our life insurance policies that are used to fund our deferred compensation liability. Net cash used in investing activities was $20.1 million for 2022.
These uses of cash for investing activities were partially offset by $3.0 million of cash received for distributions from our life insurance policies that are used to fund our deferred compensation liability.
See Note 17 “Income Taxes” within the notes to our consolidated financial statements for additional information on our income tax expense. Net Income and Earnings per Share Net income decreased $13.1 million to $62.5 million for the year ended December 31, 2023 from $75.6 million for the year ended December 31, 2022.
See Note 17 “Income Taxes” within the notes to our consolidated financial statements for additional information on our income tax expense. Net Income and Earnings per Share Net income increased $54.1 million to $116.6 million for the year ended December 31, 2024 from $62.5 million for the year ended December 31, 2023.
See Part I—Item 1. “Business—Overview—Our Services” and Note 19 “Segment Information” within the notes to our consolidated financial statements for a discussion of our segments and capabilities.
“Business—Overview—Our Services” and Note 19 “Segment Information” within the notes to our consolidated financial statements for a discussion of our segments and capabilities.
If the fair value of the reporting unit is less than its carrying value, an impairment charge is recorded in an amount equal to that difference with the loss not to exceed the total amount of goodwill allocated to the reporting unit. We determine the fair value of our reporting units using the income approach.
If the fair value of the reporting unit is less than its carrying value, an impairment charge is recorded in an amount equal to that difference with the loss not to exceed the total amount of goodwill allocated to the reporting unit.
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.
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.
The increase in adjusted EBITDA was primarily attributable to the increase in segment operating income, excluding the impact of segment restructuring charges; partially offset by the increase in corporate expenses, excluding the impacts of the change in the market value of our deferred compensation liability and corporate restructuring charges.
The increase in adjusted EBITDA was primarily attributable to the increases in Healthcare and Education operating income, excluding the impact of segment depreciation and amortization and segment restructuring charges; partially offset by the increase in unallocated corporate expenses, excluding the impacts of the change in the market value of our deferred compensation liability and transaction-related expenses.
We record the provision for doubtful accounts and unbilled services as a reduction in revenue. To the extent we write-off accounts receivable due to a client’s inability to pay, the charge is recognized as a component of selling, general and administrative expenses. Business Combinations We use the acquisition method of accounting for business combinations .
To the extent we write-off accounts receivable due to a client’s inability to pay, the charge is recognized as a component of selling, general and administrative expenses. Business Combinations We use the acquisition method of accounting for business combinations .
Cash Flows (in thousands): Year Ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 135,262 $ 85,400 $ 17,987 Net cash used in investing activities (36,652) (20,128) (20,143) Net cash used in financing activities (98,327) (74,108) (44,410) Effect of exchange rate changes on cash 32 (111) 170 Net increase (decrease) in cash and cash equivalents $ 315 $ (8,947) $ (46,396) Operating Activities Our operating assets and liabilities consist primarily of receivables from billed and unbilled services, accounts payable and accrued expenses, accrued payroll and related benefits, operating lease obligations and deferred revenues.
Cash Flows (in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by operating activities $ 201,319 $ 135,262 $ 85,400 Net cash used in investing activities (79,749) (36,652) (20,128) Net cash used in financing activities (111,635) (98,327) (74,108) Effect of exchange rate changes on cash (173) 32 (111) Net increase (decrease) in cash and cash equivalents $ 9,762 $ 315 $ (8,947) Operating Activities Our operating assets and liabilities consist primarily of receivables from billed and unbilled services, accounts payable and accrued expenses, accrued payroll and related benefits, operating lease obligations and deferred revenues.
The 2021 gain relates to the sale of our Life Sciences business in the fourth quarter of 2021. 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.
The 2024 gain relates to the divestiture of our Studer Education practice in the fourth quarter of 2024. 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.
We recognize revenue under performance-based billing arrangements using the following steps: 1) estimate variable consideration using a probability-weighted assessment of the fees to be earned, 2) apply a constraint to the estimated variable consideration to limit the amount that could be reversed when the uncertainty is resolved (the “constraint”), and 3) recognize revenue of estimated variable consideration, net of the constraint, based on work completed to date versus our estimates of the total services to be provided under the engagement.
We recognize revenue under performance-based billing arrangements using the following steps: 1) estimate variable consideration using either the expected value method or the most likely amount method, as appropriate, 2) apply a constraint to the estimated variable consideration to limit the amount that could be reversed when the uncertainty is resolved (the “constraint”), and 3) recognize revenue of estimated variable consideration, net of the constraint, based on work completed to date versus our estimates of the total services to be provided under the engagement.
Other Income (Expense), Net Interest expense, net of interest income increased $7.7 million to $19.6 million for the year ended December 31, 2023 from $11.9 million for the year ended December 31, 2022, which was primarily attributable to higher interest rates and higher levels of borrowing under our credit facility in 2023 compared to 2022.
Other Income (Expense), Net Interest expense, net of interest income increased $5.8 million to $25.3 million for the year ended December 31, 2024 from $19.6 million for the year ended December 31, 2023, which was primarily attributable to higher levels of borrowing and higher interest rates under our Amended Credit Facility in 2024 compared to 2023.
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 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.
Unexpected changes in the demand for our services can result in significant variations in utilization and revenues and present a challenge to optimal 21 Table of Contents hiring and staffing. Moreover, our clients typically retain us on an engagement-by-engagement basis, rather than under long-term recurring contracts.
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 ability to secure additional financing in the future, if needed, will depend on several factors, including our future profitability, the quality of our accounts receivable and unbilled services, our relative levels of debt and equity, and the overall condition of the credit markets. OFF-BALANCE SHEET ARRANGEMENTS We are not a party to any material off-balance sheet arrangements.
Our ability to secure additional financing in the future, if needed, will depend on several factors, including our future profitability, the quality of our accounts receivable and unbilled services, our relative levels of debt and equity, and the overall condition of the credit markets.
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.
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; 23 Table of Contents and our Managed Services professionals who provide revenue cycle management and research administration managed services and outsourcing at our healthcare, education and research-focused clients.
The applicable margin 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. Fees and interest on borrowings are paid on a monthly basis.
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 increase in net operating cash flows was primarily related to an increase in cash collections in 2023 compared to the prior year; partially offset by an increase in salaries and related expenses for our revenue-generating professionals, an increase in payments for selling, general and administrative expenses in 2023 compared to the prior year, and an increase in the amount paid for annual performance bonuses in the first quarter of 2023 compared to the first quarter of 2022.
The increase in net cash provided by operating activities primarily related to an increase in cash collections in 2024, a $15 million litigation settlement received in 2024, and a decrease in payments for contractor expenses in 2024 compared to 2023; partially offset by an increase in payments for salaries and related expenses for our revenue-generating professionals, an increase in the amount paid for annual performance bonuses in the first quarter of 2024 compared to the first quarter of 2023, and an increase in payments for selling, general and administrative expenses in 2024 compared to the prior year.
Our Consolidated Leverage Ratio as of December 31, 2023 was 1.59 to 1.00, compared to 1.92 to 1.00 as of December 31, 2022. Our Consolidated Interest Coverage Ratio as of December 31, 2023 was 10.85 to 1.00, compared to 14.04 to 1.00 as of December 31, 2022.
Our Consolidated Leverage Ratio as of December 31, 2024 was 1.39 to 1.00, compared to 1.59 to 1.00 as of December 31, 2023. Our Consolidated Interest Coverage Ratio as of December 31, 2024 was 10.50 to 1.00, compared to 10.85 to 1.00 as of December 31, 2023.
Diluted earnings per share for the year ended December 31, 2023 decreased to $3.19, compared to $3.64 for the year ended December 31, 2022, driven by the decrease in net income partially offset by a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan.
Diluted earnings per share for the year ended December 31, 2024 increased to $6.27, compared to $3.19 for the year ended December 31, 2023, driven by the increase in net income and a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan.
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.
These fees are generally billed in advance and included in deferred revenues until recognized. 21 Table of Contents Time-and-expense engagements do not provide us with a high degree of predictability as to performance in future periods.
This approach requires the use of significant estimates and assumptions, including forecasted revenue growth 36 Table of Contents rates, forecasted EBITDA margins, and discount rates. Our forecasts are based on historical experience, current backlog, expected market demand, and other industry information. The following is a discussion of the goodwill impairment test performed during 2023.
This approach requires the use of significant estimates and assumptions, including forecasted revenue growth rates, forecasted EBITDA margins, and discount rates. Our forecasts are based on historical experience, current backlog, expected market demand, and other industry information.
The increases in compensation costs for our revenue-generating professionals were primarily driven by an increase in headcount, annual salary increases that went into effect in the first quarter of 2023, and an increase in performance bonus expense.
The increases in compensation costs for our revenue-generating professionals were primarily driven by an increase in headcount and annual salary increases that went into effect in the first quarter of 2024, an increase in performance bonus expense, and an increase in share-based compensation expenses; partially offset by a decrease in signing, retention and other bonus expense.
Adjusted Net Income and Adjusted Earnings per Share Adjusted net income increased $25.1 million to $96.2 million for the year ended December 31, 2023, compared to $71.1 million for the year ended December 31, 2022.
Adjusted Net Income and Adjusted Earnings per Share Adjusted net income increased $24.2 million to $120.4 million for the year ended December 31, 2024, compared to $96.2 million for the year ended December 31, 2023.
The current authorization extends the share repurchase program through December 31, 2024 with a repurchase amount of $400 million, of which $86.2 million remains available as of December 31, 2023.
The current authorization extends the share repurchase program through December 31, 2025 with a repurchase amount of $500 million, of which $64.5 million remains available as of December 31, 2024.
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.
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.
See “Liquidity and Capital Resources” below and Note 7 “Financing Arrangements” within the notes to our consolidated financial statements for additional information on our senior secured credit facility. 30 Table of Contents Other income (expense), net decreased $42.6 million to expense of $21.9 million for the year ended December 31, 2023 from income of $20.7 million for the year ended December 31, 2022.
See “Liquidity and Capital Resources” below and Note 7 “Financing Arrangements” within the notes to our consolidated financial statements for additional information about our senior secured credit facility. Other income (expense), net increased $32.4 million to income of $10.5 million for the year ended December 31, 2024 from expense of $21.9 million for the year ended December 31, 2023.
As a percentage of revenues, selling, general and administrative expenses increased to 18.9% during 2023, compared to 18.5% during 2022.
As a percentage of revenues before reimbursable expenses, selling, general and administrative expenses increased to 19.3% during 2024, compared to 18.9% during 2023.
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.
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.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
OFF-BALANCE SHEET ARRANGEMENTS We are not a party to any material off-balance sheet arrangements. 35 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
For a company such as ours, the income approach will generally provide the most reliable indication of fair value because the value of such companies is dependent on their ability to generate earnings.
We determine the fair value of our reporting units using a combination of the income approach and the market approach. For a company such as ours, the income and market approaches will generally provide the most reliable indications of fair value because the value of such companies is dependent on their ability to generate earnings.
Additionally, restructuring charges incurred in 2023 included $3.0 million of severance-related expenses; $1.8 million for rent and related expenses, net of sublease income, for previously vacated office spaces; $0.9 million related to non-cash lease impairment charges driven by updated sublease assumptions for previously vacated office spaces; and $0.3 million related to the abandonment of a capitalized software development project. 29 Table of Contents The $9.9 million of restructuring charges incurred in 2022 included $5.7 million of severance-related expenses; $2.3 million for rent and related expenses, net of sublease income, for previously vacated office spaces; $0.7 million for third-party professional advisory fees related to the modification of our operating model; and $0.6 million for the early termination of a contract.
Additionally, restructuring charges incurred in 2023 included $3.0 million of severance-related expenses; $1.8 million for rent and related expenses, net of sublease income, for previously vacated office spaces; $0.9 million related to non-cash lease impairment charges driven by updated sublease assumptions for previously vacated office spaces; and $0.3 million related to the abandonment of a capitalized software development project.
The increase in compensation costs for our revenue-generating professionals was primarily driven by an increase in performance bonus expense, an increase in headcount, and annual salary increases that went into effect in the first quarter of 2023.
The increase in compensation costs for our revenue-generating professionals was primarily driven by annual salary increases that went into effect in the first quarter of 2024 and an increase in headcount due to the acquisition of AXIA Consulting in the fourth quarter of 2024; partially offset by decreases in signing, retention and other bonus expense and performance bonus expense for our revenue-generating professionals.
Depreciation and Amortization Depreciation and amortization expense decreased $2.5 million, or 9.0%, to $24.9 million for the year ended December 31, 2023, compared to $27.4 million for the year ended December 31, 2022.
Depreciation and Amortization Depreciation and amortization expense decreased $0.1 million, or 0.3%, to $24.8 million for the year ended December 31, 2024, compared to $24.9 million for the year ended December 31, 2023.
For the year ended December 31, 2022, our effective tax rate was 30.4% as we recognized income tax expense of $33.0 million on income of $108.6 million.
Income Tax Expense For the year ended December 31, 2024, our effective tax rate was 24.3% as we recognized income tax expense of $37.4 million on income of $154.0 million.
The increase in revenues reflects continued strength in demand for both our Consulting and Managed Services capability and Digital capability across all segments, which demonstrates our focus on accelerating growth in our healthcare and education industries and growing our presence in commercial industries.
The overall increase in revenues before reimbursable expenses reflects continued strength in demand for both our Consulting and Managed Services capability and Digital capability within our Healthcare and Education segments, and reflects our focus on accelerating growth in our healthcare and education industries.
The carrying value of goodwill for each of our reporting units as of December 31, 2023 is as follows (in thousands): Reporting Unit Carrying Value of Goodwill Healthcare $ 454,959 Education 122,235 Commercial 48,517 Total $ 625,711 Intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill.
The carrying value of goodwill for each of our reporting units as of December 31, 2024 is as follows (in thousands): Reporting Unit Carrying Value of Goodwill Healthcare $ 453,528 Education 144,564 Commercial 80,651 Total $ 678,743 Intangible assets represent purchased assets that lack physical substance but can be distinguished from goodwill.
Results for 2023 and 2022 include a non-cash unrealized loss and a non-cash unrealized gain related to our investment in a hospital-at-home company, which had an unfavorable impact of $0.99 and a favorable impact of $0.96 on diluted earnings per share in 2023 and 2022, respectively. • Adjusted diluted EPS increased 43.1% to $4.91 for 2023, compared to $3.43 for 2022. • Net cash provided by operating activities increased 58.4% to $135.3 million for 2023, compared to $85.4 million for 2022. • Returned $123.6 million shareholders by repurchasing 1,461,815 shares of our common stock in 2023.
Results for 2024 include a litigation settlement gain related to a completed legal matter in which Huron was the plaintiff, which had a favorable impact of $0.60 on diluted earnings per share in 2024; and results for 2023 include a non-cash unrealized loss related to our investment in a hospital-at-home company, which had an unfavorable impact of $0.99 on diluted earnings per share in 2023. • Adjusted diluted EPS increased 31.8% to $6.47 for 2024, compared to $4.91 for 2023. • Net cash provided by operating activities increased 48.8% to $201.3 million for 2024, compared to $135.3 million for 2023. • Returned $122.2 million shareholders by repurchasing 1,218,434 shares of our common stock in 2024.
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.
Unallocated corporate expenses not allocated at the segment level include costs related to administrative functions that are performed in a centralized manner, as well as restructuring charges, depreciation and amortization, and interest expense that are not attributable to a particular segment.
Healthcare operating margin increased to 25.7% from 24.5% primarily due to the revenue growth that outpaced the increase in compensation costs for our revenue-generating professionals; partially offset by an increase in contractor expenses, as a percentage of revenues. • Education operating income increased $20.2 million, or 25.6%, primarily due to the increase in revenues as well as decreases in contractor expenses, restructuring charges, and software and data hosting expenses; partially offset by increases in compensation costs for our revenue-generating professionals, technology expenses, practice administration and meetings expenses, and promotion and marketing expenses.
Healthcare operating margin increased to 27.6% from 25.7% primarily due to the decrease in contractor expenses; partially offset by an increase in practice administration and meetings expenses, as a percentage of revenues before reimbursable expenses. • Education operating income increased $9.4 million, or 9.5%, primarily due to the increase in revenues before reimbursable expenses as well as decreases in training expenses and contractor expenses; partially offset by increases in compensation costs for our revenue-generating professionals and support personnel and amortization of capitalized software development costs.
(2) Managed Services capability revenues within our Healthcare segment was $70.1 million, $67.6 million and $47.7 million for the years ended 2023, 2022 and 2021, respectively. Managed Services capability revenues within our Education segment was $19.5 million, $15.7 million and $9.1 million for the years ended 2023, 2022 and 2021, respectively.
(5) Managed Services capability revenues before reimbursable expenses within our Healthcare segment was $77.5 million, $70.1 million and $67.6 million for the years ended 2024, 2023 and 2022, respectively. Managed Services capability revenues before reimbursable expenses within our Education segment was $28.2 million, $29.6 million and $30.6 million for the years ended 2024, 2023 and 2022, respectively.
The estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, 37 Table of Contents facts and circumstances existing at that time. We believe that positions taken on our tax returns are fully supported.
The estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts and circumstances existing at that time. We believe that positions taken on our tax returns are fully supported. However, final determinations of prior year tax positions upon settlement with the taxing authority could be materially different from estimates.
During 2023 we recognized a $4.8 million gain for the market value of our deferred compensation investments compared to a $7.4 million loss recognized in 2022. Income Tax Expense For the year ended December 31, 2023, our effective tax rate was 25.5% as we recognized income tax expense of $21.4 million on income of $83.9 million.
For the year ended December 31, 2023, our effective tax rate was 25.5% as we recognized income tax expense of $21.4 million on income of $83.9 million.
Adjusted diluted earnings per share increased 43.1% to $4.91 for 2023 from $3.43 for 2022, driven by an increase in operating income and a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan. Net cash provided by operating activities increased 58.4% to $135.3 million in 2023, compared to $85.4 million in 2022.
Adjusted diluted earnings per share increased to $6.47 in 2024, compared to $4.91 in 2023, driven by the increase in adjusted net income and a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan.
As of December 31, 2023, our primary sources of liquidity are cash on hand, cash flows from our U.S. operations, and borrowing capacity available under our credit facility.
LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents were $21.9 million, $12.1 million, and $11.8 million at December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, our primary sources of liquidity are cash on hand, cash flows from our U.S. operations, and borrowing capacity available under our credit facility.
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.
These non-GAAP financial measures are used by management in their 22 Table of Contents financial and operating decision making because management believes they reflect our ongoing business in a manner that allows for meaningful period-to-period comparisons.
Education operating margin increased to 23.1% from 21.9% primarily driven by decreases in contractor expenses and restructuring charges; partially offset by increases in compensation costs for our revenue-generating professionals and technology expenses, as percentages of revenue. • Commercial operating income increased $4.2 million, or 8.3%, primarily due to the increase in revenues as well as a decrease in contractor expenses; partially offset by increases in compensation costs for our revenue-generating professionals, promotion and marketing expenses, and practice administration and meetings expenses.
Education operating margin decreased to 22.9% from 23.1% primarily driven by an increase in salaries and related expenses for our revenue-generating professionals, as a percentage of revenues before reimbursable expenses; partially offset by the decrease in performance bonus expense for our revenue-generating professionals. • Commercial operating income decreased $3.0 million, or 5.5%, primarily due to the decrease in revenues before reimbursable expenses as well as increases in compensation costs for our revenue-generating professionals and software and data hosting expenses; partially offset by decreases in promotion and marketing expenses and restructuring charges.
Net cash provided by operating activities increased $49.9 million to $135.3 million in 2023 from $85.4 million in 2022.
Net cash provided by operating activities increased $66.1 million to $201.3 million in 2024 from $135.3 million in 2023.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $48.1 million, or 23.0%, to $257.5 million for the year ended December 31, 2023 from $209.4 million for the year ended December 31, 2022.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased by $28.7 million, or 11.1%, to $286.7 million for the year ended December 31, 2024 from $257.9 million for the year ended December 31, 2023.
Transaction-related expenses : To permit comparability with prior periods, we exclude the impact of third-party advisory, legal, and accounting fees incurred related to the evaluation and/or consummation of business acquisitions.
These items are recorded as a component of other gains, net on our consolidated statement of operations. 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe outstanding interest rate swap agreements as of December 31, 2023 are scheduled to mature on a staggered basis through February 29, 2028. Foreign Currency Risk We have exposure to changes in foreign currency exchange rates between the U.S. Dollar (USD) and the Indian Rupee (INR) related to our operations in India.
Biggest changeThe outstanding interest rate swap agreements as of December 31, 2024 are scheduled to mature on a staggered basis through January 31, 2029. Foreign Currency Risk We are exposed to foreign currency risk in the ordinary course of business. We have exposure to changes in foreign currency exchange rates between the U.S.
A hypothetical 100 basis point change in the interest rate would have had a $0.9 million effect on our pretax income on an annualized basis, including the effect of the interest rate swaps. We enter into forward interest rate swap agreements to hedge against the interest rate risks of our variable-rate borrowings.
A hypothetical 100 basis point change in the interest rate would have had a $0.7 million effect on our pretax income on an annualized basis, including the effect of the interest rate swaps. We enter into forward interest rate swap agreements to hedge against the interest rate risks of our variable-rate borrowings.
The outstanding foreign exchange forward contracts as of December 31, 2023 are scheduled to mature monthly through December 31, 2024. We use a sensitivity analysis to determine the effects that market foreign currency exchange rate fluctuations may have on the fair value of our foreign currency exchange rate hedge portfolio.
The outstanding foreign exchange forward contracts as of December 31, 2024 are scheduled to mature monthly through December 31, 2025. We use a sensitivity analysis to determine the effects that market foreign currency exchange rate fluctuations may have on the fair value of our foreign currency exchange rate hedge portfolio.
A hypothetical 100 basis point change in the foreign currency exchange rate between the USD and INR would have an immaterial impact on the fair value of our hedge instruments as of December 31, 2023 and 2022.
A hypothetical 100 basis point change in the foreign currency exchange rate between the USD and INR would have an immaterial impact on the fair value of our hedge instruments as of December 31, 2024 and 2023.
Due to the short maturity of these investments, we have concluded that we do not have material market risk exposure. Refer to Note 12 “Derivative Instruments and Hedging Activity” within the notes to our consolidated financial statements for additional information on our derivative instruments.
Due to the short maturity of these investments, we have concluded that we do not have material market risk exposure. Refer to Note 12 “Derivative Instruments and Hedging Activity” within the notes to our consolidated financial statements for additional information on our derivative instruments. 39 Table of Contents
Market Risk We have a 1.69% convertible debt investment in Shorelight Holdings, LLC, a privately-held company, which we account for as an available-for-sale debt security. As such, the investment is carried at fair value with unrealized holding gains and losses excluded from earnings and 38 Table of Contents reported in other comprehensive income.
Market Risk We have a 1.69% convertible debt investment in Shorelight Holdings, LLC, a privately-held company, which we account for as an available-for-sale debt security. As such, the investment is carried at fair value with unrealized holding gains and losses excluded from earnings and reported in other comprehensive income.
A hypothetical 100 basis point change in the interest rate would have a $0.7 million effect on our pretax income on an annualized basis, including the effect of the interest rate swaps.
A hypothetical 100 basis point change in the interest rate would have a $1.1 million effect on our pretax income on an annualized basis, including the effect of the interest rate swaps.
Under the terms of the interest rate swap agreement, 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. As of December 31, 2023 and 2022, the aggregate notional amount of our forward interest rate swap agreements was $250.0 million and $200.0 million, respectively.
Under the terms of the interest rate swap agreement, 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. As of both December 31, 2024 and 2023, the aggregate notional amount of our forward interest rate swap agreements was $250.0 million.
As of December 31, 2023, the fair value of the investment was $68.0 million, with a total cost basis of $40.9 million. At December 31, 2022, the fair value of the investment was $57.6 million, with a total cost basis of $40.9 million.
As of December 31, 2024, the fair value of the investment was $62.3 million, with a total cost basis of $40.9 million. At December 31, 2023, the fair value of the investment was $68.0 million, with a total cost basis of $40.9 million.
At December 31, 2022, we had borrowings outstanding under the credit facility totaling $290.0 million that carried a weighted average interest rate of 3.8%, including the impact of the interest rate swaps described below.
At December 31, 2024, we had borrowings outstanding under the credit facility totaling $357.7 million that carried a weighted average interest rate of 4.7%, including the impact of the interest rate swaps described below.
As of December 31, 2023 and 2022, the aggregate notional amounts of these contracts were INR 1,375.7 million, or $16.6 million, and INR 657.9 million, or $8.0 million, respectively, based on the exchange rates in effect as of each period end.
As of December 31, 2024 and 2023, the aggregate notional amounts of these contracts were INR 1.40 billion, or $16.3 million, and INR 1.38 billion, or $16.6 million, respectively, based on the exchange rates in effect as of each period end.
We hedge a portion of our cash flow exposure related to our INR-denominated intercompany expenses by entering into non-deliverable foreign exchange forward contracts.
Dollar (USD) and the Indian Rupee (INR) related to our operations in India as part of our global delivery model. We hedge a portion of our cash flow exposure related to our INR-denominated intercompany expenses by entering into non-deliverable foreign exchange forward contracts.
Interest Rate Risk We have exposure to changes in interest rates associated with borrowings under our bank credit facility, which have variable interest rates tied to Term SOFR or an alternate base rate, at our option.
Interest Rate Risk We have exposure to changes in interest rates associated with borrowings under our senior secured credit facility. 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.
The non-cash impairment loss and unrealized gain were recorded to other income (expense), net in our consolidated statement of operations. We do not use derivative instruments for trading or other speculative purposes. From time to time, we invest excess cash in short-term marketable securities. These investments principally consist of overnight sweep accounts.
As of both December 31, 2024 and 2023, the carrying value of the investment was $7.4 million, with a total cost basis of $5.0 million. We do not use derivative instruments for trading or other speculative purposes. From time to time, we invest excess cash in short-term marketable securities. These investments principally consist of overnight sweep accounts.
Removed
As of December 31, 2023 and 2022, the carrying value of the investment was $7.4 million and $33.6 million, respectively, with a total cost basis of $5.0 million.
Removed
In the fourth quarter of 2023, we recognized a non-cash impairment loss of $26.3 million on our preferred stock investment based on the valuation established in a new round of financing expected to close in early 2024.
Removed
During the first quarter of 2022, we recognized a non-cash unrealized gain of $27.0 million, based on the observable price change of preferred stock issued by the company with similar rights and preferences to our preferred stock investment, a Level 2 input.

Other HURN 10-K year-over-year comparisons