Q1 2024 Huron Consulting Group Inc Earnings Call

April 30, 2024

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Operator: Good afternoon, and welcome to Huron Consulting Group's webcast to discuss financial results for the first quarter of 2024. At this time, all conference call lines are in a listen-only mode.

Speaker Change: Good afternoon, and welcome to Huron consulting group's webcast to discuss financial results for the first quarter 'twenty 'twenty four at this time all conference call lines are in a listen only mode. Later, we will conduct a question and answer session for conference call participants and instructions will follow at that time.

Operator: Later, we will conduct a question and answer session for conference call participants, and instructions will follow at that time. As a reminder, this conference call is being recorded. Before we begin, I would like to point all of you to the disclosure at the end of the company's news release for information about any forward-looking statements that may be made or discussed on this call. The news release is posted on Huron's website.

Speaker Change: As a reminder, this conference call is being recorded before we begin I would like to point all of you to the disclosure at the end of the company's news release for information about any forward looking statements that may be made or discussed on this call. The news release is posted on Hurons website.

Speaker Change: Please review that information along with the filings with the SEC for a disclosure of factors that may impact subjects.

Speaker Change: Discussed in this afternoon's webcast the company will be discussing one or more non-GAAP financial measures. Please look at the earnings release and on Hurons website for all of the disclosures required by the SEC, including reconciliation to the most comparable GAAP numbers and now I would like to turn.

Speaker Change: The call over to Mark Hussey, Chief Executive Officer, and President of Huron Consulting group. Mr. Huseby. Please go ahead.

Operator: Please review that information along with the filings with the SEC for a disclosure of factors that may impact the subjects discussed in this afternoon's webcast. The company will be discussing one or more non-GAAP financial measures. Please look at the earnings release and on Huron's website for all of the disclosures required by the SEC, including reconciliation to the most comparable GAAP numbers. Now, I would like to turn the call over to Mark Hussey, Chief Executive Officer and President of Huron Consulting Group. Mr. Hussey, please go ahead.

Mark Hussey: Good afternoon, and welcome to the Huron Consulting Group's first quarter 2024 earnings call. With me today are John Kelly, our Chief Financial Officer, and Ronnie Dale, our Chief Operating Officer. Our first quarter revenue, I'm sorry, our first quarter results reflect our ongoing focus on achieving consistent revenue growth and margin expansion. Revenues grew 12% in the first quarter of 2023, driven by strong growth in our healthcare segment, as well as continued growth in our education segment, which furthers the segment's multi-year growth trajectory.

Mark Hussey: Good afternoon, and welcome to Huron consulting group's first quarter 2024 earnings call.

Mark Hussey: With me today are John Kelly, our Chief Financial Officer, and Ryan <unk>, Our Chief operating officer.

Mark Hussey: First quarter revenue I'm, sorry, our first quarter results reflect our ongoing focus on achieving consistent revenue growth and margin expansion.

Mark Hussey: Revenues grew 12% over the first quarter of 2023, driven by strong growth in our healthcare segment as well as continued growth in our education segment, which furthers the segment's multiyear growth trajectory.

Mark Hussey: Our strong growth in the first quarter of 2023 was achieved on top of strong growth in the year-ago quarter, with Q1 2023 growth of 22% over the first quarter of 2022. Our first quarter results also demonstrate our commitment to delivering on the growth strategy and financial goals shared at our 2022 Investor Day, consisting of low double-digit annual revenue growth and expanding our adjusted EBITDA margins to mid-team levels, leading to annual high-team percentage adjusted EPS growth.

Mark Hussey: Our strong growth in the first quarter of 2023 was achieved on top of strong growth in the year ago quarter with Q1 of 2023 growth of 22% over the first quarter of 2022.

Mark Hussey: Our first quarter results also demonstrate our commitment to delivering on our growth strategy and financial goals shared at our 2022 Investor day, consisting of low double digit annual revenue growth and expanding our adjusted EBITDA margins to mid teen levels, leading to annual high teen percentage adjusted EPS growth.

Mark Hussey: We believe achieving our financial goals, together with a balanced capital deployment strategy that prioritizes moderate leverage, share repurchase, and targeted M&A, will drive strong returns for our shareholders over time. I'll now share some additional insight into the progress we've made on our strategy while providing color on our first quarter performance. As a reminder, to achieve our goals, we're committed to executing against five strategic pillars. The first pillar of our strategy is to continue accelerating growth in our largest industries, healthcare and education, where we're focused on building upon our leading competitive position.

Mark Hussey: We believe achieve our financial goals together with a balanced capital deployment strategy that prioritizes moderate leverage share repurchase and targeted M&A will drive strong returns for our shareholders over time.

Speaker Change: I'll now share some additional insight into the progress we've made on our strategy, while providing color into our first quarter performance.

Speaker Change: As a reminder to achieve our goals we are committed to executing against our five strategic pillars.

Speaker Change: First pillar of our strategy is to continue accelerating growth in our largest industries healthcare and education, where we're focused on building upon our leading competitive positions.

Mark Hussey: In the health care segment, first quarter revenues grew 21% over the prior year quarter. The increase in revenues in Q1 of 2024 was driven by strong broad-based demand across our performance improvement, digital strategy and innovation, and financial advisory offerings. The operating environments for many health care organizations are mixed in recent months.

Speaker Change: In the health care segment first quarter revenues grew 21% over the prior year quarter. The increase in revenues in Q1 of 2024 was driven by strong broad based demand across our performance improving digital strategy and innovation and financial advisory offerings.

Speaker Change: The operating environment for many healthcare organizations are mixed in recent months. Some health systems continue to face extreme financial positions driving continued demand for our performance improvement and distress focused financial advisory offerings.

Mark Hussey: Some health systems continue to face strained financial positions, driving continued demand for our performance improvement and distress-focused financial advisory offerings. Meanwhile, other health care providers have seen margins improve, and they're now seeking opportunities to evolve their strategies and advance their competitive positions by making strategic and operational investments. These organizations are creating demand for our digital strategy and innovation and non-distressed financial advisory offerings. As part of Huron's growth strategy, we continue to diversify our healthcare service portfolio over time to meet the broader needs of the market, which has yielded greater consistency in this segment's financial performance.

Speaker Change: Other health care providers have seen margins improve and we are now seeking opportunities to evolve their strategies and advance their competitive positions by making strategic and operational investments. These organizations are creating demand for our digital strategy and innovation and non distressed financial advisory offerings.

Speaker Change: As part of <unk> growth strategy, we continue to diversify our healthcare service portfolio overtime to meet the broader needs of the market, which has yielded greater consistency in this segment's financial performance.

Mark Hussey: We've expanded the offerings within our performance improvement business while growing our healthcare-focused strategy and innovation, digital, and financial advisory offerings. If you look back to 2014, 10 years ago, our performance improvement offerings represented virtually 100% of segment revenue. Fast forward to 2023, we diversified our portfolio so that performance improvement offerings represent only 46% of healthcare segment revenue. We're confident that these investments we're making to expand our healthcare offerings are paying off.

Speaker Change: Expanded the offerings within our performance improvement business, while growing our health care focused strategy innovation digital and financial advisory offerings.

Speaker Change: If you look back to 2014 10 years ago, our performance improvement offerings represented virtually 100% of segment revenues.

Speaker Change: Fast forward to 2023, we've diversified our portfolio so that performance improvement offerings represent 46% of health care segment revenues.

Speaker Change: We're confident that these investments, we're making to expand our health care offerings are paying off.

Mark Hussey: And we believe we're well positioned to address the wide array of opportunities and challenges facing our hospital and health system clients. Education segment revenues grew 7% in the first quarter of 2024 over the prior year quarter, driven by strong demand for our digital services and products. The education industry continues to face wide-ranging pressures, including top-line challenges, including difficulty meeting enrollment and fundraising goals.

Speaker Change: And we believe we are well positioned to address a wide array of opportunities and challenges facing our hospital and health system clients.

Speaker Change: Education segment revenues grew 7% in the first quarter of 2024 over the prior year quarter, driven by strong demand for our digital services and products.

Speaker Change: The education industry continues to face wide ranging pressures from topline challenges, including difficulty meeting enrollment in fund raising goals or challenging research funding sources to cost and regulatory pressures, including increased government governmental scrutiny workforce disruptions and the need to make.

Speaker Change: <unk> technology investments our clients require a broad array of services and products to help them address these issues.

Mark Hussey: [inaudible] Clients require a broad array of services and products to help them address these issues. We continue to strengthen and expand our offerings in the education industry to comprehensively address our clients' needs. We are the leading firm in industry-serving research institutions. The challenges of managing a highly complex research enterprise are increasing due to declines in funding for federal and commercial research and increased costs to conduct research.

Speaker Change: We continued to strengthen and expand our offerings in the education industry to comprehensively address our clients' needs or the leading firm in the industry serving research institutions. The challenges of managing the highly complex research enterprise are increasing too.

Speaker Change: Two declines and funding from federal and commercial research and increased cost to conduct research.

Mark Hussey: The research mission is critical to our client base, and our research businesses continue to be a strong source of growth for our education segment and a differentiator for our services among the most prominent research institutions. We continue to invest in strengthening our offerings in this area, including our Huron Research Suite software, which is the preeminent product in the market with over 600,000 users and over 500 institutions. The strength of our offering has yielded a client retention rate of over 99% across our suite of products.

Speaker Change: Research mission is critical to our client base and our research business has continued to be a strong source of growth for our education segment and a differentiator for our services among the most prominent research institutions.

Speaker Change: <unk> to invest in strengthening our offerings in this area, including Heron Research suite software, which is the pre eminent product in the market.

Speaker Change: 600000 users and over 500 institutions.

Speaker Change: The strength of our offering has yielded a client retention rate of over 99% across our suite of products.

Mark Hussey: We also continue to expand our offerings to serve the broader needs of our mission-driven clients, particularly in education. For example, a recent acquisition of GG&A, one of the top philanthropy consulting firms, is creating new opportunities, not only in education but also across healthcare and other not-for-profit clients. Another example of our expanded offerings is our athletics practice. We began to focus on university athletics in 2020, and today we have worked with over 50 institutions, ranging from the top Division I conferences to FCS and smaller institutions, many of which are facing increasingly complicated operating environments stemming from the dramatic changes taking place in intercollegiate athletics. We help these organizations evaluate and execute upon conference and athletic department strategies.

Speaker Change: We also continued to expand our offerings to serve the broader needs of our mission driven clients, particularly in education. For example, our recent acquisition of G. G&A one of the top philanthropy consulting firms is creating new opportunities not only in education, but also across health care and other non for profit clients.

Speaker Change: Another example of our expanded offerings as our athletics practice.

Speaker Change: Again to focus on University Athletics, and 2020 and today, we have worked with over 50 institutions ranging from the top division one conferences to FCS and smaller institutions, many of which are facing increasingly complicated operating environment stemming from the dramatic changes taking place in <unk>.

Speaker Change: Collegiate Athletics.

Speaker Change: These organizations evaluate and execute upon their conference and athletic Department strategies, which often have an outsized impact on the financials enrollment and branding of our large academic clients.

Mark Hussey: We often have an outsized impact on the financials, enrollment, and branding of our large academic clients. Our health care and education businesses have marked tailwinds that continue to propel their growth. Our leading competitive physicians, deep client relationships, high quality delivery, and wide array of offerings position us well to be the partner of choice for our health system, university, and research-focused clients. Our second strategic pillar is focused on growing our commercial industry presence.

Speaker Change: Our health care and education businesses have market pillars, which continued to propel their growth are.

Speaker Change: Our leading competitive positions deep client relationships high quality delivery and wide array of offerings position us well to be the partner of choice for health system University and research focused clients.

Speaker Change: Our second strategic pillar is focused on growing our commercial industry presence.

Mark Hussey: In the first quarter of 2024, commercial segment industry revenues were largely flat, driven by increases in revenue for our financial advisory offerings, partially offset by declines in our strategy and innovation in digital offerings. We continue to see our commercial clients taking a more cautious approach to executing large-scale initiatives and strategy-related engagements as uncertainties in the macroeconomic environment persist.

Speaker Change: In the first quarter of 2024 commercial segment revenues were largely flat driven by increases in revenue for financial advisory offerings, partially offset by declines in our strategy and innovation and digital offerings continued.

Speaker Change: <unk> continued to see our commercial clients, taking a more cautious approach to executing large scale initiatives and strategy related engagements as uncertainties in the macroeconomic environment persist.

Mark Hussey: Our distressed financial advisory business continues to have a solid outlook, although at a more moderate level than the strong record results achieved in 2023. With our focus strategy, we believe the commercial industries will create new avenues of growth for Huron. The mix of our digital, strategy, and financial advisory offerings has created a more balanced portfolio from which we can continue to grow our presence in financial services, industrials, and manufacturing, and energy and utilities, while providing more consistency in our financial performance through different market cycles.

Speaker Change: Our distressed financial advisory business continues to have a solid outlook, although at a more moderate level than the strong record results achieved in 2023.

Speaker Change: With our focused strategy, we believe the commercial industries will create new avenues of growth for Huron.

Speaker Change: The mix of our digital strategy and financial advisory offerings has created a more balanced portfolio from which we can continue to grow our presence in the financial services, industrial and manufacturing and energy and utilities, while providing more consistency in our financial performance through different market cycles.

Mark Hussey: Now let me turn to our third strategic pillar, advancing our integrated digital platform. In the first quarter of 2024, digital capability revenues grew 10% over the first quarter of 2023, driven by growth across the healthcare and education segments. In 2023, our digital capability grew to over a half billion dollars, a key milestone for that business and a testament to the collective investments we've made in technology, data, and analytics across all industries. We continue to be a market leader in our digital office.

Speaker Change: Now, let me turn to our third strategic pillar advancing our integrated digital platform in the first quarter of 2024 digital capability revenues grew 10% over the first quarter of 2023, driven by growth across the health care and education segments.

Speaker Change: In 2023, our digital capability grew to over <unk> 5 billion.

Speaker Change: Key milestone for that business and a testament to the collective investments we've made in technology data and analytics across all industries.

Speaker Change: We continue to be a market leader and our digital offerings.

Mark Hussey: We're an investing class in healthcare for ERP business transformation and implementation leadership, as well as IT consulting services in the payer market. We've also been awarded recognition for driving innovation by other technology partners. And we're incredibly proud of the work we're doing and how we continue to expand our offerings to meet the rapidly evolving technology, data, and analytics needs of our clients. Intelligent automation, including the use of generative AI, is one area that is of great prominence and exploration in the market today.

Speaker Change: They invest in class and health care for our ERP business transformation and implementation leadership.

Speaker Change: As well as consulting services in the payer market.

Speaker Change: We've also been awarded recognitions for driving innovation by other technology partners.

Speaker Change: And we're incredibly proud of the work, we're doing and how we continue to expand our offerings to meet the rapidly evolving technology data and analytics needs of our clients.

Speaker Change: Intelligent automation, including the use of generative AI is one area that is of great prominence and exploration in the market today.

Mark Hussey: Our automation, analytics, and AI services revenues grew to over $50 million in 2023, demonstrating the value we bring to our clients and the growing significance of these advanced technologies in the market. Our work today spans advising clients on their intelligent automation strategies and roadmaps, including the data foundation needed to be successful, through to the implementation of distinct use cases in comprehensive intelligent automation programs. We provide two brief examples of how we're working with clients to apply AI.

Speaker Change: Our automation analytics and AI services revenues grew to over $50 million in 2023, demonstrating the value we bring to our clients and the growing significance of these advanced technologies in the market.

Speaker Change: Work today spans advising clients on their intelligent automation strategies and roadmaps, including the data foundation needed to be successful through to the implementation of distinct use cases and comprehensive intelligent automation programs.

Mark Hussey: First, we're working with a commercial client to establish a centralized AI capability center that will provide a platform to responsibly govern their AI program while also incubating high-impact solutions across their business. Second, we're working with a health system to leverage generative AI to expedite the clinical appeals process as part of the revenue cycle to reduce the administrative burden of inefficient reimbursement. These are only two examples of many where we're leaning in to enable our clients' businesses through the use of AI.

Speaker Change: We provide two brief examples of our working with clients to apply AI.

Speaker Change: First we're working with our commercial plan to establish a centralized AI capability center that will provide a platform to responsibly govern periodic program, while also incubating high impact solutions across their business.

Speaker Change: Second we are working with the health system to leverage generative AI to expedite the clinical appeals process as part of their revenue cycle to reduce the administrative burden of inefficient reimbursement.

Speaker Change: These are only two examples of many where we're leaning in to enable our clients businesses through the use of AI.

Speaker Change: Expanding our digital capabilities, including our intelligent automation offerings offerings drove organic and inorganic investments. We will continue to be an important driver of growth across our business for many years to come as our clients focus on driving growth and productivity in their own highly competitive markets, where the use of technology data and analytics.

Speaker Change: Now, let me turn to our last two strategic pillars, which are more financially focused.

Speaker Change: First we're executing on our margin improvement levers to achieve enhanced profitability.

Mark Hussey: As it relates to margin expansion, a company-wide focus on improving profitability has yielded solid results. For 2020-2023, our full-year adjusted give-it-up margin has increased 200 basis points, and full-year adjusted diluted earnings per share increased 128%. We continue to feel confident in our ability to improve our margins across our robust global platform, which will drive further efficiency as we scale, while continuing our focus on areas such as driving improved utilization, pricing utilization, and SG&A leverage.

Speaker Change: As it relates to margin expansion our company wide focus on improving profitability has yielded solid results.

Speaker Change: In 2020% to 2023% of full year adjusted EBITDA margin has increased 200 basis points in full year adjusted diluted earnings per share has increased 128%.

Speaker Change: We continue to feel confident in our ability to improve our margins across our robust global platform, which will drive further efficiencies as we scale, while continuing our focus in areas such as driving improved utilization pricing utilization and SG&A leverage.

Mark Hussey: Our final pillar focuses on deploying capital to accelerate our strategy and return capital to our shareholders. Since our investor day in March of 2022, which is a quarter just ended, we've repurchased 3.6 million shares at a weighted average price of $78.36, representing 16.5% of our common stock outstanding as of December 31st, 2021.

Speaker Change: Our final pillar focuses on deploying capital to accelerate our strategy and return capital to our shareholders.

Speaker Change: Since our Investor day in March of 2022 and through the quarter. Just ended we repurchased three 6 million shares at a weighted average price of $78 36.

Speaker Change: Representing 16, 5% of our common stock outstanding as of December 31, 2021.

Mark Hussey: In 2024, we expect to execute a balanced capital allocation strategy across share repurchases, debt repayment, and tuck-in acquisitions. We believe that combining the capabilities and talent from acquisitions to enhance our competitive position, such as a recent GG&A acquisition, will drive strong growth and returns for our shareholders. And finally, let me acknowledge the heart of our strategy, our people.

Speaker Change: In 2024, and we expect to execute a balanced capital allocation strategy across share repurchases debt repayment and tuck in acquisitions.

Speaker Change: We believe that combining the capabilities and talent from acquisitions to enhance our competitive position such as our recent <unk> acquisition will drive strong growth and returns for our shareholders.

Speaker Change: And finally, let me acknowledge the heart of our strategy. Our people, we have and will continue to invest in our incredibly talented teams and strong collaborative culture.

Mark Hussey: We have and will continue to invest in our incredibly talented team and strong collaborative colleagues. Our competitive advantage is driven by the strength and depth of our team and our company culture, which drives how we work together and delivers on the most complex challenges of our clients. It creates an environment where we're constantly innovating new offerings and advancing our business collectively as a unified team. Our ability to attract and retain top talent is demonstrated by our headcount growth of 41% from the end of 2021 to the end of 2023, coupled with consistently low attrition and high engagement scores.

Speaker Change: Competitive advantage is driven by the strength and depth of our team and our company culture, which drives how we work together and to deliver on the most complex challenges our clients.

Speaker Change: It's an environment, where we're constantly innovating new offerings and advancing our business collectively as a unified team.

Speaker Change: Our ability to attract and retain top talent as demonstrated by our head count growth of 41% from the end of 2021 to the end of 2023, coupled with consistently low attrition and high engagement scores are distinct culture, coupled with strong career advancement and development opportunities provides a stable platform.

Speaker Change: Ongoing growth.

Speaker Change: For our people, but also for our business.

Speaker Change: Now, let me turn to our outlook for the year.

Speaker Change: Today, we affirmed our 2020 for revenue and adjusted EBITDA margin guidance, and we're raising our adjusted earnings per share guidance to a range of $5 62.

Speaker Change: The $6 intensive.

Mark Hussey: We continue to believe our growth trajectory is strong, given the expected demand in our ed markets across healthcare, education, and commercial, our strong competitive positions, and our deep client relationships. Given our focus, we have a unique breadth in our offerings, depth in our talent, and relevance in our subject matter expertise that allows us to be nimble and innovative, yet have the credentials and experience to compete and win against much larger competitors.

Speaker Change: We continue to believe our growth trajectory is strong given the expected demand in our end markets across health care education, and commercial are strong competitive positions.

Speaker Change: Client relationships given our focus we have.

Speaker Change: Brendan our offerings depth in our talent and relevance and our subject matter expertise that allows us to be nimble.

Speaker Change: Innovative yet have the credentials and experience to compete and win against much larger competitors.

Mark Hussey: Let me close by saying that our commitment to our growth strategy is evident in our recent performance, including our first quarter results. Our progress would not be possible without the focus and dedication of our entire team.

Speaker Change: Let me close by saying that our commitment to our growth strategy as evidenced in our recent performance, including our first quarter results, our progress would not be possible without the focus and dedication of our entire team and I want to thank you all of them for supporting each other our clients and our business as we strive to make a lasting impact and the work that we do each and everyday.

John D. Kelly: And I want to thank all of them for supporting each other, our clients, and our business as we strive to make a lasting impact in the work that we do each and every day. Now, I'm going to turn it over to John for a more detailed discussion of our financial efforts. Thank you, Mark, and good afternoon, everyone.

Speaker Change: Now, let me turn it over to John for a more detailed discussion of our financial performance.

John D. Kelly: Thank you Mark and good afternoon, everyone.

John D. Kelly: Before I begin, please note that I will be discussing non-GAAP financial measures, such as EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and Free Cash Flow. Our press release, 10Q, and investor relations page on the Huron website have reconciliations of these non-GAAP measures, the most comparable GAAP measures, along with a discussion of why management uses these non-GAAP measures and why management believes they provide useful information to investors regarding our financial condition and operating results.

John D. Kelly: Before I begin please note that I'll be discussing non-GAAP financial measures such as EBITDA adjusted EBITDA adjusted net income adjusted EPS and free cash flow.

John D. Kelly: Management believes they provide useful information to investors regarding our financial condition and operating results.

John D. Kelly: Before discussing our financial results for the quarter, I'd like to acknowledge two housekeeping items. First, our first quarter results reflect the acquisition of DG&A, which closed on March 1, and as such, one month of DG&A's operating results are included within the education segment. Second, in conjunction with the continued refinement of our operating model, we reclassified certain revenue-generating professionals within our digital capability from our healthcare and education segments to our commercial segments, reflecting the flexibility of these professionals to provide services across all of our industries. Inclusive of Health Care and Education

Speaker Change: Before discussing our financial results for the quarter I'd like to acknowledge two housekeeping items first.

Speaker Change: Our first quarter results reflect the acquisition of <unk>, which closed on March one and as such one month of <unk> operating results are included within the education segment.

John D. Kelly: Second in conjunction with the continued refinement of our operating model.

John D. Kelly: We reclassified certain revenue generating professionals within our digital capability of our healthcare and education segments to our commercial segment collecting the flexibility of these professionals to provide services across all of our industries.

John D. Kelly: Lucid with health care and education.

John D. Kelly: We have provided supplemental materials to provide additional details on this reclassification, which is posted in the Investor Relations section of our website. Now, I will share some of the key financial results of the first quarter. Revenues for the first quarter of 2024 were $356 million, up 12% from $317.9 million in the same quarter of 2023. The increase in revenues for the quarter is driven by strong growth in our healthcare segment and continued growth in our education sector.

John D. Kelly: We have provided supplemental materials to provide additional detail to this reclassification, which are posted on the investor Relations section of our website.

John D. Kelly: Net income for the first quarter of 2024 was $18 million, or $0.95 per diluted share, compared to net income of $13.4 million, or $0.68 per diluted share, in the first quarter of 2023. Our effective income tax rate in the first quarter of 2024 was negative 2.5 percent because we recognized an income tax benefit on our income before taxes, driven primarily by discrete tax benefits or share-based compensation awards that were invested during the quarter and non-taxable gains on the investments used to fund our deferred compensation liability. Justin Evito earned $33.8 million in Q1 2024 for 9.5% of revenues, compared to $29.5 million for 9.3% of revenues in Q1 2023.

John D. Kelly: Now I will share some of the key financial results for the first quarter.

John D. Kelly: Revenues for the first quarter of 2024 were $356 million up 12% from $317 9 million in the same quarter of 2023.

John D. Kelly: The increase in revenues for the quarter was driven by strong growth in our healthcare segment continued growth in our education segment.

John D. Kelly: Net income for the first quarter of 2024 with $18 million for 95 per diluted share compared to net income of $13 4 million or <unk> 68 per diluted share in the first quarter of 2023.

John D. Kelly: Our effective income tax rate in the first quarter of 2024 with negative two 5% as we recognized an income tax benefit on our income before taxes, driven primarily by discrete tax benefits for share based compensation awards that vested during the quarter.

John D. Kelly: Non taxable gain on the investments used to fund our deferred compensation liability.

John D. Kelly: Adjusted EBITDA was $33 $8 million in Q1, 2024, or nine 5% of revenues compared to $29 5 million or nine 3% of revenues in Q1 2023.

John D. Kelly: The increase in adjusted EBITDA for the quarter was primarily due to the increase in segment operating income, partially offset by an increase in corporate expenses, which included certain third-party legal expenses that are not expected to continue at the same level in future quarters. Adjusted net income was $23.3 million, or $1.23 per diluted share, in Q1 2024, compared to $17.1 million, or $0.87 per diluted share, in the first quarter of 2023, resulting in a 41% increase in adjusted diluted earnings per share over Q1 2023. Now, I'll discuss the performance of each of our operating segments. The healthcare segment generated 51% of total company revenues during the first quarter of 2024.

John D. Kelly: The increase in adjusted EBITDA for the quarter was primarily due to the increase in segment operating income partially offset by an increase in corporate expenses, which included certain third party legal expenses that are not expected to continue at the same level in future quarters.

John D. Kelly: Adjusted net income was $23 $3 million for $1 23 per diluted share Q1, 2024, compared to $17 1 million or <unk> 87 per diluted share in the first quarter of 2023.

John D. Kelly: <unk> and a 41% increase in adjusted diluted earnings per share over Q1 2023.

Speaker Change: Now I'll discuss the performance of each of our operating segments.

John D. Kelly: The healthcare segment generated 51% of total company revenues during the first quarter of 2020 for.

John D. Kelly: This segment posted revenues of $180.7 million, up $31.7 million, or 21.3% from the first quarter of 2023. The increase in revenues in the quarter reflects strong demand for our performance improvement, digital, strategy, and innovation, and financial advisory offerings. Consulting and Mass Services and Digital Capabilities grew 22% and 19%, respectively, in the first quarter, reflecting the continued broad-based demand for our offices.

John D. Kelly: The segment posted revenues of $187 million up $31 $7 million or 21, 3% in the first quarter of 2023.

John D. Kelly: The increase in revenues in the quarter reflect strong demand for our performance improvement digital strategy and innovation and financial advisory offerings.

John D. Kelly: Consulting and managed services and digital capabilities for 22% and 19% respectively. In the first quarter, reflecting the continued broad based demand for our offerings.

John D. Kelly: Operating income margin for healthcare was 23.6% in Q1 2024 compared to 21.6% in Q1 2023. The increase in margin is primarily due to revenue growth and outpaced compensation costs for our revenue-generating professionals, partially offset by an increase in practice administration and meeting expenses, as a percentage of revenue. The education segment generated 31% of total company revenues during the first quarter of 2024.

John D. Kelly: Operating income margin for healthcare was 23, 6% in Q1 2024 compared to 21, 6% in Q1 2023.

John D. Kelly: The increase in margin is primarily due to revenue growth and outpaced compensation cost for our revenue generating professionals.

John D. Kelly: Really offset by an increase in practice administration meeting expenses as a percentage of revenues.

John D. Kelly: The education segment generated 31% of total company revenues during the first quarter of 2024.

John D. Kelly: The education segment posted revenues of $111.6 million, up $7.4 million or 7.1% from the first quarter of 2023, and this was achieved on top of strong growth in the year-ago quarter with Q1 2023 growth of 29% over Q1 2022. Revenues in the first quarter of 2024 included $1.3 million from our acquisition of GG&A. The increase in revenues in the quarter is driven by strong demand for our technology and analytics services and software products within our digital capability.

John D. Kelly: The education segment posted revenues of $111 $6 million up $7 4 million or seven 1% from the first quarter of 2023 and.

John D. Kelly: And was achieved on top of strong growth and a year ago quarter with Q1 2023 growth, 29% over Q1 2022.

John D. Kelly: Revenues in the first quarter of 2024 included $1 $3 million from our acquisition of G&A.

John D. Kelly: The increase in revenues in the quarter was driven by strong demand for our technology and analytics services software products within our digital capability.

John D. Kelly: The operating income margin for education was 19.7% for Q1 2024, compared to 22.2% for the same quarter in 2023. The decrease in operating income margin in the quarter is primarily driven by increased compensation costs for our revenue-generating professionals at a percentage of revenue, partially offset by a reduction in contractor expense.

John D. Kelly: The operating income margin for education was 19, 7% for Q1 2024 compared to 22, 2% the same quarter in 2023.

John D. Kelly: The decrease in operating income margin in the quarter was primarily driven by increased compensation cost for our revenue generating professionals.

John D. Kelly: As a percentage of revenue, partially offset by a reduction in contractor expenses.

John D. Kelly: The Commercial segment generated 18% of total company revenues during the first quarter of 2024, posting revenues of $63.6 million, compared to $64.7 million in the first quarter of 2023. However, revenues were largely flat in the quarter, with increases in demand for our financial advisory offerings, offset by declines in revenue within our strategy and innovation in digital arts. Operating income margin for the commercial segment was 22.1% for Q1 2024 compared to 21.7% for the same quarter in 2023.

John D. Kelly: The commercial segment generated 18% of total company revenues during the first quarter of 2024.

John D. Kelly: And posted revenues of $63 $6 million compared to $64 $7 million in the first quarter of 2023.

John D. Kelly: Revenues were largely flat in the quarter increases in demand for our financial advisers financial advisory offerings offset by declines in revenue within our strategy and innovation and digital offerings.

John D. Kelly: Operating income margin for the commercial segment was 22, 1% for Q1 2024 compared to 21, 7% for the same quarter in 2023.

John D. Kelly: The increase in operating income margin in the quarter was primarily driven by decreases in compensation costs for a revenue-generating profession. Corporate expenses not allocated at the segment level and excluding restructuring charges were $52.5 million in Q1 2024 compared to $44.1 million in Q1 2023.

John D. Kelly: The increase in operating income margin in the quarter was primarily driven by decreases in compensation costs for our revenue generating professionals.

John D. Kelly: Corporate expenses not allocated at the segment level and excluding restructuring charges were $52 $5 million in Q1, 2024 compared to $44 $1 million in Q1 2023.

John D. Kelly: Allocated corporate expenses in the first quarter of 2024 and 2023 included $2.4 million and $1.9 million, respectively. The following is an expense related to the increase in the liability of our Deferred Compensation Plan, which is offset by the investment gain on the assets used to fund that plan reflected in other income. Excluding the impact of the Deferred Compensation Plan in both periods, unallocated corporate expenses increased $8 million, primarily due to increases in legal expenses, compensation expense for our support personnel, and other losses.

John D. Kelly: Unallocated corporate expenses in the first quarter of 2024, and 2023, including $2 4 million and $1 $9 million, respectively of expense related to the increase in the liability of our deferred compensation plan.

John D. Kelly: It is offset by investment gains on the assets used to fund that plan reflected in other income.

John D. Kelly: Excluding the impact of the deferred compensation plan in both periods unallocated corporate expenses increased $8 million, primarily due to increases in legal expenses.

John D. Kelly: Compensation expense for our support personnel and other losses.

John D. Kelly: The legal expenses, which are not expected to continue at the same level in future quarters, primarily relate to professional fees for a legal matter, or if Huron is a plaintiff, M&A-related expenses. Now turning to the balance sheet and cash. Total debt as of March 31, 2024 was $574 million, consisting of our $275 million term loan and $299 million of borrowings on our revolver. We finished the quarter with cash of $19 million for net debt of $555 million.

John D. Kelly: The legal expenses, which are not expected to continue at the same level in future quarters, primarily related to professional fees for legal matter, where you're at at the plaintiff M&A related expenses.

Speaker Change: Now turning to the balance sheet and cash flows.

John D. Kelly: Total debt as of March 31, 2024 was $574 million, consisting of our $275 million term loan and $299 million of borrowings on our revolver.

John D. Kelly: We finished the quarter with cash of $19 million for net debt of $555 million.

John D. Kelly: This was a $243 million increase in net debt compared to Q4 2023, primarily due to the payment of our annual cash bonus, share repurchases, and the acquisition of GG&A, all during the quarter. Regarding sheer repurchase, during the quarter, we used $62.3 million to repurchase approximately 625,000 shares, representing 3.4% of our common stock outstanding as of December 31st, 2023. As of March 31, 2024, $24 million remained available for share repurchases under our current share repurchase program.

John D. Kelly: This was a $243 million increase in net debt compared to Q4 2023, primarily due to the payment of our annual cash bonuses share repurchases and the acquisition of G. G&A all during the quarter.

John D. Kelly: Regarding share repurchases during the quarter, we used $62 $3 million.

John D. Kelly: Approximately 625000 shares representing three 4% of our common stock outstanding Hasnt December 31 2023.

John D. Kelly: As of March 31, 2024, $24 million remained available for share repurchases under our current share repurchase program.

John D. Kelly: We expect the pace of shared repurchase activity to moderate through the remainder of the year. Our leverage ratio, as defined in our Senior Bank Agreement, was 2.7 times adjusted EBITDA as of March 31, 2024, compared to 2.8 times adjusted EBITDA as of March 31, 2023. As a reminder, our first quarter typically represents a seasonal high leverage ratio, given the payout of our annual bonuses in March. Cash flow used in operations in the first quarter of 2024 was $130.7 million, using $8.8 million to invest in capital expenditures. Inclusive of Internally Developed Software Costs

John D. Kelly: The pace of share repurchase activity to moderate through the remainder of the year.

John D. Kelly: Our leverage ratio as defined in our senior Bank agreement was two seven times adjusted EBITDA as of March 31, 2024, compared to two eight times adjusted EBITDA as of March 31 2023.

John D. Kelly: As a reminder, our first quarter typically represents a seasonal high leverage ratio given the payout of our annual bonuses in March.

John D. Kelly: Cash flow used in operations in the first quarter of 2024 was $137 million.

John D. Kelly: $8 $8 million to invest in capital expenditures.

John D. Kelly: Of internally developed software costs and purchases.

John D. Kelly: Purchases of Property and Equipment, resulting in a negative free cash flow of $139.5 million. We continue to expect full-year free cash flow to be in a range of positive $115 to $145 million. DSO came in at 91 days for the first quarter of 2024, compared to 87 days in the fourth quarter of 2023 and 83 days for the first quarter.

John D. Kelly: Property and equipment, resulting in negative free cash flow of $139 $5 million.

John D. Kelly: We continue to expect full year free cash flow to be in a range of positive $115 million to $145 million.

John D. Kelly: DSO came in at 91 days for the first quarter of 2024 compared to 87 days for the fourth quarter of 2023, and 83 days for the first quarter of 2023.

John D. Kelly: DSO was elevated during the first quarter of 2024 relative to the other periods due to certain larger health care and education industry projects with contractual payment terms that will result in cash payments in the second and third quarters of 2024. We expect DSO to normalize in the 75-85 day range by the end of the year. Finally, let me turn to our guidance for the full year 2024. As Mark mentioned, we are affirming our revenue and adjusting eBit accounts, revenues before reimbursable expenses in a range of $1.46 billion to $1.54 billion, and adjusted EBITDA in a range of 12.8% to 13.3% of revenue.

John D. Kelly: DSO was elevated during the first quarter of 2024 relative to the other periods you'd be certain larger health care and education industry projects with contractual payment terms that will result in cash payments in the second and third quarters of 2020 for.

John D. Kelly: We expect DSO to normalize in the 75 to 85 day range by the end of the year.

Speaker Change: Finally, let me turn to our guidance for the full year 2024.

John D. Kelly: As Mark mentioned, we are affirming our revenue and adjusted EBIT guidance.

John D. Kelly: With revenues before Reimbursable expenses in a range of $1 $46 billion to $1 five $4 billion.

John D. Kelly: And adjusted EBITDA in a range of 12, 8% to 13, 3% of revenues.

John D. Kelly: Today we are raising our adjusted non-GAAP EPS to a range of $5.60 to $6.10. This is reflective of a now lower anticipated full-year effective tax rate in the range of 26 to 28 percent and a lower weighted average diluted share base for the year based on the accelerated pace of share repurchases during the first quarter. Thanks, everyone. I would now like to open the call for questions. Operator.

John D. Kelly: Today, we are raising our adjusted non-GAAP EPS to a range of $5 60.

John D. Kelly: $6.10.

John D. Kelly: You may now lower anticipated full year effective tax rate in the range of 26% to 28% and a lower weighted average diluted share base for the year based on the accelerated pace of share repurchases during the first quarter.

Speaker Change: Thank you everyone I would now like to open the call to questions operator.

Operator: Thank you. Ladies and gentlemen, if you have a question at this time, please press star 1 1 on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, you may do so by pressing star 1 1 again.

Speaker Change: Thank you ladies and gentlemen, if you have a question at this time. Please press star one one on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. You may do so by pressing star 111.

Speaker Change: One moment for our first question.

Andrew Owen Nicholas: One moment for our first question, which comes from the line of Andrew Nicholas of William Blair and Company. Your question, please, Andrew. Thank you. Good afternoon, everybody.

Speaker Change: Which comes from the line.

Speaker Change: Andrew Nicholas of William Blair <unk> Company. Your question. Please Andrew.

Andrew Owen Nicholas: I wanted to start on the health care segment's growth. A really strong quarter on that front. Mark, you alluded to kind of broad-based demand across that segment, but I was hoping you could unpack, you know, where the growth rates sit across PI, digital, strategy, and innovation, financial advisor, just kind of getting a sense for under the hood, kind of where the strength is, if there is a rotation between the different segments as, you know, the end market seems to get a bit healthier with time. That would be really helpful to kind of understand.

Andrew Owen Nicholas: Thank you good afternoon everybody.

Andrew Owen Nicholas: I wanted to start on the healthcare segment's growth really.

Andrew Owen Nicholas: A really strong quarter on that front.

Andrew Owen Nicholas: Mark you alluded to kind of broad based demand across that segment, but I was hoping you could unpack.

Andrew Owen Nicholas: Where the growth rates that across Pi digital strategy and innovation financial advisory I'm, just kind of getting a sense for under the Hood.

Andrew Owen Nicholas: Where the strength is if there is a rotation.

Andrew Owen Nicholas: Between the different segments as you know the end market seems to get a bit healthier with time.

Speaker Change: That'd be really helpful to kind of understand.

John D. Kelly: Yeah, John, why don't you, why don't you get some color into some of the some of the trends by area? Yeah, I'm happy to do that. I'll start there, and then Mark, you can give the color commentary from a breakout within the health care business. Then you see a lot of strength, Andrew, within our consulting part of the business and, particularly, our performance improvement part of the business. Year over year, that was up north of 20 percent between the two years.

Andrew Owen Nicholas: John Why don't you why don't you give some color into some of the some of the trends by area.

John D. Kelly: Yes, I'm happy to do that I'll start there and then mark can give the color commentary.

Speaker Change: Part of it.

John D. Kelly: Breakout within the health care business continue to see a lot of strength Andrew within our.

Mark Hussey: Salting part of the business and particularly our performance improvement part of the business year.

Mark Hussey: Year over year that was up.

Mark Hussey: North of north of 20%.

Speaker Change: Between the two years.

John D. Kelly: So, consistent with Mark's comments, that's a part of the business where, year over year, we've seen some improvement in the industry in terms of average profit margins and things like that, there are still a number of clients that are facing financial strain right now, and we see continued demand for those types of projects. From a digital perspective, we continue to see really good growth overall, and tied team growth from a digital perspective.

Speaker Change: Consistent with Mark's comments, yeah, that's a part of the business, where even though year over year, we've seen some improvement in the industry in terms of average profit margins and things like that there's still a number of clients that are facing financial strain right now and we see continued demand for those types of projects.

Speaker Change: From a digital perspective, we continue to see them.

Speaker Change: Really good growth overall.

Speaker Change: Good.

Speaker Change: <unk> growth from a digital perspective, I think that's reflective of really the other part of the market, where we see clients that have reached more financial stability now turning around and really starting to execute on some of their investment plans, which oftentimes includes including the digital infrastructure. So we've seen good growth there and then you referenced as well our strategy.

John D. Kelly: I think that's reflective of the other part of the market, where we see clients that have reached more financial stability now turning around and really starting to execute on some of their investment plans, which oftentimes includes improving their digital infrastructure. So we've seen good growth there. And then you mentioned strategy and financial advisory. Those are two smaller bases of revenue within the business, but areas that are really performing well.

Speaker Change: In financial Advisory and those are two smaller basis of revenue within the business, but areas that are really performing well and so from a percentage perspective barak.

John D. Kelly: And so from a percentage perspective, they're up, call it north of 25% year over year, but they're starting from a smaller base. But I think those are both areas where we see a lot of demand from our clients right now in terms of working on their strategies, as well as starting to think about balance sheet considerations, where our financial advisory team plays really well with those clients. So hopefully, that gets some color.

Speaker Change: Call it north of 25% year over year, but they're starting from a smaller base, but I think those are both areas, where we see a lot of demand with our clients right now in terms of.

Speaker Change: Working on our strategies as well as starting to think about balance sheet considerations, where our financial advisory team plays really well with those clients. So that hopefully that gives some color and I would say Andrew to them onto my comment on the.

Mark Hussey: And I would say, Andrew, to my comment on the... Next view of margins within within the sector really depends a little bit on market specific situations, but I would tell you that, you know, collectively, there are some in those systems that are having performance improvement issues. But there are also aspects that address every one of the businesses. So it's not as if performance improvement is only on one side and not on the other. So it really is just maybe leaning more heavily on one side of that mix.

Speaker Change: Mixed view of margins within within the sector.

Andrew Owen Nicholas: It really depends a little bit on market specific situations, but I would tell you that.

Andrew Owen Nicholas: So collectively it's.

Speaker Change: And those systems that are having performance improvement issues are also aspects that address every one of the businesses. So it's not as if performance improvement is only on one side and not on the other.

Mark Hussey: And I'd say our power in the market right now is really our ability to bring that team together very collectively in coordination and seamlessly across each client situation, which has really enabled us to differentiate and have a very strong offering for clients in terms of driving value. And maybe, Andrew, I'll jump in with one last point as it relates to the strategy business and as it relates to our healthy financial advisor business.

Speaker Change: So it really is just maybe leaning heavily more heavily on one side of that mix and I'd say our power in the market right now is really our ability to bring that team together very collectively and coordination and seamlessly across each client's situation, which has really enabled us to differentiate and have a very strong offering.

Speaker Change: For for clients in terms of driving value.

Speaker Change: Maybe Andrew I'll jump in with one last one.

Andrew Owen Nicholas: As it relates to the strategy business and areas as it relates to our public healthy financial advisory business, but percentages, probably arent as helping them to think of when you look at a year ago. At this time those were low single digit million dollar businesses for US right now are operating more in that mid teen millions.

Mark Hussey: The percentages probably aren't as helpful to think of, but if you look at a year ago at this time, those were low single-digit million-dollar businesses for us that are now operating more at the mid-team million-dollar level, and we continue to see, and we're investing in that growth that we've seen and continue to see demand for a trajectory like that. So that's an area within the portfolio that we're pretty excited about in terms of adding growth to the healthcare business. No, that's really helpful.

Andrew Owen Nicholas: Level and we continue to see we're investing in that growth that we've seen and we continue to see demand.

Andrew Owen Nicholas: Trajectory like that so that's an area within the portfolio that we're pretty excited about in terms of adding growth to the health care business.

Andrew Owen Nicholas: I guess I would have thought maybe a little bit more of a rotation, but it sounds like everything is still very much hitting on all cylinders. I appreciate that. And then maybe for my follow-up on the margin front, I'm pretty encouraged by the margin expansion, even with a little bit lower utilization in the quarter and some really strong headcount growth. So can you talk about the ability to expand margins despite lower utilization and then, somewhat relatedly, I think it's up about 20 basis points year over year in the first quarter. You stuck to the full year margin expansion guidance.

Speaker Change: No. That's really helpful. I guess I would've thought maybe a little bit more of a rotation, but it sounds like.

Speaker Change: Everything is still very much hitting on all cylinders I appreciate that and then maybe for my follow up on the margin front.

Speaker Change: Pretty encourage by the margin expansion, even with a little bit lower utilization in the quarter and some really strong head count growth. So can you talk about kind of the ability to expand margins despite lower utilization and then.

Speaker Change: Somewhat relatedly I think it's up about 20 basis points year over year in the first quarter you stuck to the full year margin expansion guidance, so what what dynamics.

Speaker Change: Allow you to expect.

Andrew Owen Nicholas: So what, what dynamics allow you to expect? maybe more, more margin expansion on a year over year basis through the rest of the year and second half as opposed to the start of the year. Thank you. Sure, Andrew.

Speaker Change: Maybe more more margin expansion on a year over year basis through the rest of the year in the second half as opposed to the start to the year. Thank you.

John D. Kelly: I can start there. We had a few items during the quarter that were not expected to repeat as the year went on that added some extra expense. So we're actually very pleased with the 20 basis points of marketing expansion in the quarter, given that we had some of those expenses. And one such item was that one of our larger teams had a practice meeting during the quarter. We typically do one of those a year, not necessarily the same team every year, but the corresponding large event like that was during the fourth quarter this year.

Speaker Change: Sure Andrew I can start there.

Speaker Change: A few items during the quarter.

Speaker Change: That were not.

Speaker Change: Not expected to repeat in the year goes on that adds some extra expense. So we're actually very pleased with the 20 basis points of marketing expansion in the quarter given that we had some of those expenses and one such item was on one of our larger teams had a practice meeting during the quarter. We typically do one of those a year not necessarily the same team every year.

Speaker Change: But the corresponding large amount like atwood during the fourth quarter. This year. It was during the first quarter. This year. So that was a little bit of an unfavorable comparison that alone had about a 70 basis point impact on margins during the quarter.

John D. Kelly: It was during the first quarter this year, so that was a little bit of an unfavorable comparison. That alone had about a 70 basis point impact on margins during the quarter. We also, as I referenced in my remarks, had some deal-related expenses that came through during the quarter. You know, you're aware of the closing of the GG&A acquisition. We had some one-time items related to earn out valuations that also came through during the quarter.

Speaker Change: We also as I referenced in my remarks.

Speaker Change: <unk> had some deal related expenses.

Speaker Change:

Speaker Change: That came through during the quarter, we were aware of the closing of the G&A acquisition we.

Speaker Change: We got some one time items related to earn out valuations.

Speaker Change: That also came through during the quarter.

John D. Kelly: And then one final item that we referenced was we did have an uptick in legal expenses during the quarter that we're not expecting to repeat at that level as the year goes on. So there were some headwinds during the quarter related to some of those factors that are either things that have been... I dropped it out like the, Thank you.

Speaker Change: And then one final item that we referenced was we did have an uptick in legal expenses during the quarter that were not expecting to repeat that level of the year goes on so there was some odd.

Speaker Change: Headwinds during the quarter related to some of those factors that are either things that have been.

Speaker Change:

Speaker Change: Hi.

Speaker Change: Adjusted out like the.

Speaker Change: Right.

Speaker Change: Fair value.

Speaker Change: The earn out fair value adjustments and then onetime type items that we don't expect to repeat later in the quarter. So despite the 20 basis points of improvement during the first quarter. That's what gives us confidence that we'll be able to accelerate that margin expansion as the year goes on.

Speaker Change: Yeah.

Speaker Change: Thank you.

Andrew Owen Nicholas: Our next question comes from the line of Tobey Sommer of Truist Securities. Your question, please, Tobey. Hey, good afternoon. This is Jasper Bibbon for Tobey.

Speaker Change: Our next question comes from the line of Tobey Sommer.

Tobey O'Brien Sommer: Securities. Your question please Toby.

Operator: Can you maybe frame for us, let's assume, for health care performance improvement growth in your 24 guidance? And maybe I missed it in the earlier discussion about different practice groups within health care, but how's the student group doing right now? So from a performance improvement perspective during the year, I think that's an area of the business where the guidance initially at the beginning of the year called for more mid to upper single-digit growth within that business just because they had such a record performance in 2023.

Tobey O'Brien Sommer: Hey, good afternoon. This is jasper bibb on for Tobey.

Jasper Bibb: Could you maybe frame for us what's assumed for healthcare performance improvement growth near 24 guidance and.

Jasper Bibb: Maybe I missed it in the earlier discussion about different.

Jasper Bibb: Different practice groups within health care, but how's the Studer group doing right now.

Jasper Bibb: Okay.

Jasper Bibb: Yes, so from a performance improvement perspective during the year, if that's an area of the business, where the guidance initially beginning year called more a mid to upper single digit growth within that business just because they had such a record performance in 2023, obviously, we're off to a good start in that business to grow fat on my.

Operator: Obviously, we're off to a good start in that business with the growth that I described in the first quarter that's outpacing that. So that's an area where there's some potential for upside as the year goes on. People go with the old student group business they referred to, that's an area of the business we're planning for modest, you know, call it low single-digit growth during the year. Got it.

Jasper Bibb: And in the first quarter, that's outpacing that and so that's an area where there is some potential for upside as the year goes on.

Jasper Bibb: But the assumptions were relatively conservative in the original plan and then as far as the.

Jasper Bibb: People business go with the old Studer group business that you referred to.

Tobey O'Brien Sommer: That's an area of the business, we're planning for modest call it low single digit growth occurring here.

Jasper Bibbon: That's helpful. I guess maybe stepping back, any thoughts on the FTC's move to ban non-competes and what that might mean for your business? Yeah, this is Mark. We're, you know, at this point. First of all, we all know it's going to get litigated. So I don't think we really know the outcome for several months.

Speaker Change: Got it that's helpful.

Speaker Change: I guess, maybe stepping back any thoughts on the T. Six moved to band non competes and what that might mean for your business.

Mark Hussey: But having said that, we are not overly concerned about it in our business. It is certainly something we use and manage all the time. And, you know, candling might be more of an opportunity as an example for us.

Speaker Change: Yeah. This is this is mark.

Mark Hussey: At this 0.1st of all we all know what's going to get litigated. So I don't think we really know the outcome for several months, but having said that we are not overly concerned about it in our business, we certainly something we use and manage all the time.

Mark Hussey: And candidly might be more of an opportunity as an example for us.

Mark Hussey: But it's not something that right now is paramount in terms of our concern list.

Speaker Change: Yeah.

Mark Hussey: But it's not something that right now is paramount in terms of our concern, let's, Got it. Last one for me, headcount growth came in a lot faster than we expected this quarter, and maybe some of that was ggna, but how should we think about the pace of headcount ads? the corresponding impact on utilization over the balance of the year. Yeah, there are a couple things to think of as you think about headcount.

Speaker Change: Got it.

Speaker Change: Last one for me like head count growth came a lot faster than we expected this quarter and maybe some of that was G&A, but how.

Speaker Change: How should we think about the pace of headcount adds and the corresponding impact on utilization over the balance of the year.

Mark Hussey: As you referenced, you've got the addition of DG&A, which is, think of that as about 100 FTEs. We've also been building out our managed services capabilities from a global delivery perspective. I'm using our India team as a base there.

Speaker Change: Yes, there's a couple of things to think of as you think about it head count because you referenced <unk> got the addition of <unk>, a which is think of that as about a 100 ftes.

Speaker Change: We've also been building out our managed services capabilities from global delivery Specced at global delivery perspective, I'm, using our India team as a base there and so we've had some.

John D. Kelly: And so we've had some more aggressive headcount ads there as we continue to win new assignments in that area and build out that part of our business, but that tends to skew to a lower expense item than in some other areas. And then the other thing that's prevalent in the numbers, We had record low attrition during the first quarter this year, and that's on top of what was low attrition in 2023 as well. So I think it's all those factors that you see, a generally low attrition environment, and then some focused ads in some of the areas that we're investing in for growth. It makes sense.

Speaker Change: More aggressive head count adds there as we continue to win new assignments in that area and build out that part of our business, but that tends to skew too.

Speaker Change: Lower expense item than in some other areas and then the other thing that's prevalent in the numbers as we.

Speaker Change: We haven't really record low attrition during the first quarter. This year and that's on top of what was low attrition in 2023 as well. So I think it's all of those factors that you see generally low attrition environment and that's what we're focused at some of the areas that we're investing for growth.

Jasper Bibbon: Thanks for taking the questions. Thank you. All right, next question comes from the line of Bill Sutherland of Benchmark. Your line is open, Bill. Thank you. Mark and John, hey, I just want to make sure I've got the speaker on. Can you hear me?

Speaker Change: Makes sense, thanks for taking the questions.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: It comes from the line of Bill Sutherland of Benchmark. Your line is open.

William Sutherland: Thank you.

Speaker Change:

William Sutherland: Mark Shawn Hey, I'm, just want make sure I got the speaker on can you hear me.

Operator: Yes, sounds good. Okay, cool. So just to follow up, I guess, on that headcount question, it was particularly strong in health care quarter on quarter, and it was like 11%. So I guess all those factors, John, you just referred to apply to health care. But are there any other colors, particularly for the segment?

Mark Shawn: Yes sounds good.

Mark Shawn: Cool.

Mark Shawn: So just to follow up I guess on that head count question. It was particularly strong in health care quarter on quarter and it was like 11%. So I guess all of those factors trying to just referred to apply to health care.

Mark Shawn: But is there any other color, particularly for the segment and then how do we think about.

William Sutherland: And then how do we think about, kind of sequentially for the rest of the year, the headcount trend there? Well, to the broader point, so a lot of that account growth that you see there, Bill, is due to the additions to our managed services team over the course of the past year. I will say, you know, from the numbers, this is an area where we continue to see excellent growth potential for the business.

Mark Shawn: Kind of sequentially for the rest of the year.

Mark Shawn: Head count trend there.

Mark Shawn: Well to the broader point, so a lot of a lot of the head count growth that you see there.

Mark Shawn: Is the editions to our managed services team.

Mark Shawn: During over the course of the past year I will say it comes through in the numbers. This is an area, where we continue to see excellent growth potential business. So it's.

William Sutherland: So it's definitely still an area of the business where we're hiring and adding talent in order to meet the needs of our clients and continue to grow for the remainder of the year. And so from a modeling perspective, I think when you look at it longer term over the course of the year, it's still safe to think of an expectation that headcount growth is going to ultimately kind of land in line with revenue growth for the year. I think that's a safe assumption.

Mark Shawn: Definitely still an area of the business, where we're hiring we're adding talent in order to.

Mark Shawn: You can read the client continues to grow.

Mark Shawn: Yeah.

Mark Shawn: And so from.

Mark Shawn: A modeling perspective, I think when you look at it longer term over the course of the year I think it is still safe to think of an expectation that head count growth is going to ultimately kind of land in line with revenue growth for the year I think that's it.

John D. Kelly: Now, there may be areas of the year ahead where we do some additional investments, or there may be areas where we end up with higher utilization and a little bit less headcount. But generally speaking, I think thinking of headcount percentage growth and revenue percentage growth is probably going to be in sync for the remainder of the year the way we look at it. Okay.

Mark Shawn: Safe assumption now there may be areas as the year progresses, where we do some additional investments that there may be areas, where we end up with higher utilization.

Mark Shawn: Ovation and a little bit less head count add but generally speaking I think thinking of head count percentage growth in revenue per site growth has probably been saying for the remainder of the year. When you look at it.

Mark Shawn: Okay.

William Sutherland: I know utilization can bounce around quarter to quarter, pretty big moves in digital and consulting, digital up. Consulting, I assume, is basically just catching up with the hiring, including the acquisition. I'm not sure what their... utilization levels were, but, Is that fair to say? And then on digital, is that sustainable?

Mark Shawn: I know utilization can bounce around quarter to quarter.

Mark Shawn: <unk>.

Mark Shawn: Pretty big moves in digital and consulting digital up consulting down.

Mark Shawn: Consulting I assume it's basically just catching up with the hiring including the acquisition I'm not sure what there.

Mark Shawn: Utilization levels were but.

Mark Shawn: Is that fair to say and then on digital is that sustainable.

John D. Kelly: I'll offer two things on the consulting side. There was a little bit of pressure on the utilization metric related to the acquisition just in the first month of onboarding some of those employees. Again, the low attrition environment in general is another factor.

Speaker Change: I'll offer two things bill on the consulting side, there was a little bit of pressure on the utilization metric related to the acquisition and just in the first month of Onboarding some of those employees.

Speaker Change: Again, the low attrition environment in general there's another factor, but when.

John D. Kelly: When you have a very low attrition environment, that can put a little bit of pressure on the utilization metric from a digital perspective. But I think that we actually have room to improve that metric if the year goes on from where it landed in the first quarter. So it was up year-over-year, but it was actually down a little bit sequentially if you look at the fourth quarter versus the first quarter.

Speaker Change: When you have very low attrition environment that can put a little bit of pressure on the utilization metric.

Speaker Change: From a digital perspective.

Speaker Change: Uh huh.

Speaker Change: I think that we actually have room to improve that metric as the year goes on them from Atlanta were landed in the first quarter. So it was up year over year was actually down a little bit sequentially, you'll get for the fourth quarter versus the first quarter. So we think that theres more room to run on that metric and the final point I mean, when we're talking about expenses earlier I referenced the large T meeting that we had that was about 70.

John D. Kelly: So we think that there's more room to run on that metric. And the final point I made, when we were talking about expenses earlier, I referenced the large team meeting that we had that was about 70 basis points of expense during the quarter. That also has a utilization impact, and while we don't have precision around it, I think we can estimate that the impact on the consulting utilization related to that was about a percent and a half.

Speaker Change: Basis points of expense during the quarter and also as a utilization impact.

John D. Kelly: So I think that that's not a completely insignificant kind of one-time item that you'd see in the first quarter. Got it. The What's, what's, um... Did you guys talk about this in the prepared remarks? I had to step away for a second.

Speaker Change: And while.

Speaker Change: Well, we don't have precision around it I think we estimate that the impact for the consulting utilization related that was about a percent and a half. So I think that thats not really insignificant kind of a onetime item that you've seen in the first quarter.

Speaker Change: Got it.

Speaker Change: Yeah.

Speaker Change: The.

Speaker Change: What's what's some.

Speaker Change: Could you guys talk about this need.

Speaker Change: In the prepared remarks, I had to step away for a second kind of the.

William Sutherland: Kind of the... Your thoughts on capital allocation now that you've done or a significant share buyback. I know you're going to moderate, but how are you? Looking at perhaps the M&A environment, do there seem to be good opportunities, or can you, watch and see at this point? We like the M&A pipeline we have, and we've always had a pretty picky set of opportunities that we pursue often. We're getting to know them.

Speaker Change: Your thoughts on capital allocation now that you have.

Speaker Change: Bob.

Speaker Change: Done.

Speaker Change: Or a significant share buyback I know you are going to moderate but.

Speaker Change: How are you.

Speaker Change: Looking at.

Speaker Change: Perhaps the M&A environment does there.

Speaker Change: Seem to be good opportunities or.

Speaker Change: Got it.

Speaker Change: Kind of watching to see at this point.

Speaker Change: Well you know.

Speaker Change: We like the M&A pipeline, we have and.

Speaker Change: We've always had a.

Speaker Change: Pretty picky set of opportunities.

Speaker Change: Opportunities that we pursue often we're getting to know them, sometimes working in the market together, but often that's a precursor for us to move to the next step of an acquisition.

Mark Hussey: Sometimes we're working in the market together. But often, that's a precursor for us to move to the next step of an acquisition. We've looked at a lot of companies over the last year, and I would just say we continue to look at really good opportunities that we feel good about. I do think they fit in the tuck-in type category, but the range of size could be a little bit bigger than in gene DNA, and a few a little bit smaller than that, but I think that we'll continue to be. Obviously, you can't time exactly when those things happen, but I would expect us to be more active through the balance.

Speaker Change: We've looked at a lot of companies over the last year and I would just say we continue to look at it really good opportunities that we feel good about I do think there is good and the <unk>.

Speaker Change: In type categories, but you know the.

Speaker Change: The range of size could be a little bit bigger than in G&A.

Speaker Change: You were a little bit smaller than that but I think that will continue to be.

Speaker Change: You can't time, exactly when those happen, but I wouldn't expect us to be more active through the balance of the year.

William Sutherland: Oh, good. Okay. Thanks for all the calls, guys. Appreciate it. Thank you. Thanks, Bill. Our next question comes on the line from Kevin Steinke of Barrington Research and Associates. Your question, please, Kevin. Good afternoon.

Speaker Change: Okay. Okay. Thanks.

Speaker Change: Thanks for all the color guys I appreciate it.

Speaker Change: Thank you thanks Bill.

Speaker Change: Our next question.

Speaker Change: Come from the line up Kevin Stankey.

Kevin Mark Steinke: Barrington Research Associates your question please Kevin.

Operator: So you talked about continuing caution from clients in the commercial segment about, you know, moving forward with digital and Strategy and Innovation projects. I believe, you know, on your last call, the fourth quarter call, you talked about some, seeing some signs that those areas could pick up in 2024. Is that still the case, or do you think clients have, you know, become a little more cautious over the last, you know, three months or so here? Hey Kevin, it's John.

Kevin Mark Steinke: Good afternoon.

Kevin Mark Steinke: So you talked about.

Kevin Mark Steinke: Continuing caution.

Kevin Mark Steinke: From clients in the commercial segment.

Kevin Mark Steinke: About.

Kevin Mark Steinke: I'm moving forward with digital and.

Kevin Mark Steinke: Strategy and innovation projects.

Kevin Mark Steinke: I believe.

Kevin Mark Steinke: Last call the fourth quarter call you talked about some seeing some signs that those areas.

Kevin Mark Steinke: Could pick up.

Kevin Mark Steinke: In 2024 is that still the case or do you think.

Kevin Mark Steinke: Clients have become a little more cautious over the last.

Kevin Mark Steinke: Three months or so here.

Kevin Mark Steinke: We absolutely still see indications that suggest it could pick up as 2024 goes on. When we actually look at the size of the pipeline and some of the opportunities of the pipeline, we're really encouraged by it. There are some great projects in there, and I guess the underlying theme there is that there's a lot of need and demand from our clients for the services that we provide. I think what has ended up being a little bit of a cautionary factor for the mixed signal is, I think because of some of the general macroeconomic uncertainty that's in the market right now, you do see clients that are just a little bit more hesitant to get a project started, a little bit more deliberate in how they pace out projects and things like that.

Kevin Mark Steinke: Hey, Kevin It's Jon Al we absolutely still see indications that suggest it could pick up as 2020, Florida goes on when.

Jon: When we actually look at the size of the pipeline and some of the opportunities in the pipeline. We're really encouraged by it there's some great projects in there and I guess the underlying theme. There is there's a lot of need and demand for our <unk>.

Jon: Clients for the services that we provide I think what is ended up being a little bit of a cautionary factor for the mixed signal is I think because of some of the general macro economic uncertainty that's in the market right. Now you do see clients are just a little bit more hesitant to get projects started a little bit a more deliberate.

Kevin Mark Steinke: How they paced out projects and thinks about that and so that's kind of what we're fighting through but in terms of the needs that are out there in the market, we definitely see that and from our perspective, it's really just kind of a matter of when not a matter of if in terms of that coming back, but we're definitely going through a period right now it is a little bit of uncertainty.

Kevin Mark Steinke: So that's kind of what we're fighting through, but in terms of the needs that are out there in the market, we definitely see that, and from our perspective, it's really just kind of a matter of when, not a matter of if, in terms of that coming back. But we're definitely going through a period right now where there's a little bit. I think it's well said.

John D. Kelly: I think it's, you know, the inflationary environment, the economy. But, you know, when you look at the election year, obviously, it's on the minds of some of our clients as well. But, you know, I think that John said it right.

Speaker Change: I think that's well said I think it's you know.

Kevin Mark Steinke: The inflationary environment and the economy.

Kevin Mark Steinke: But you know when you look at the election year, obviously, it's on the minds of some of our clients as well, but you know I think John said it right. The pipeline is actually pretty good it's more a matter of how does the timing play out with respect to specific opportunities, but were definitely getting our share of that pass and I'm feeling good about our offerings will be competitive.

Mark Hussey: The pipeline is actually pretty good. It's a small matter of how the timing plays out with respect to specific opportunities, but we're definitely getting our share of that and feeling good about our offerings and being competitive in the market. Okay, thanks.

Kevin Mark Steinke: And the market.

Kevin Mark Steinke: Okay. Thanks, and then also on commercial.

Kevin Mark Steinke: You mentioned continued growth in financial advisory. Is that area as hot as it has been? You know, I know you're going to be coming up against some more difficult comparisons here, but is that slowing at all or as strong as it's been or strengthening? Just kind of wondering directionally how that's trending. I think it's the, so the context I'd give Kevin is last year that business was really light hot in terms of demand and in terms of a record revenue sort of year.

Kevin Mark Steinke: Insurance continued growth and financial advisory.

Kevin Mark Steinke: Does that area as hard as it has been you know I know you're gonna be.

Kevin Mark Steinke: Coming up but you get some more difficult comparisons here, but is that.

Kevin Mark Steinke: Slowing at all or as strong as it's been or strengthening just kind of wondering directionally, how that's trending.

Speaker Change: I think it is.

Kevin Mark Steinke: So the context I'd give Kevin is last year that business was really white hot in terms of demand and in terms of our record revenue sort of year I think the growth rate moderated or we expect it to moderate from what we saw last year, but it still was a robust demand environment, there's still significant amount of income.

Kevin Mark Steinke: I think the growth rate is moderated, or we expect it to moderate from what we saw last year, but it still is a robust demand environment. There's still a significant amount of inquiries for our services in that area, and our team is still having, quite frankly, a significant amount of success on some of those opportunities.

Kevin Mark Steinke: <unk> for our services in that area and our team is still having.

John D. Kelly: And so when that business is performing well, it's a really high-margin part of our portfolio. And we continue to feel very good about the prospects of that business as the year goes on, even if it's not growing at the kind of really high rate that it was growing in the 2023 interval. Okay, thank you. And then just lastly, Any change at the segment level in terms of the growth outlook for each segment that gets you to that consolidated number? I think it's probably a little too early to adjust the guide for Kevin.

Kevin Mark Steinke: Quite frankly, a significant amount of success in some of those opportunities. So.

Kevin Mark Steinke: When that business is performing well its really high margin part of our portfolio.

Kevin Mark Steinke: And we continue to feel very good about prospects for that business as the year goes on even if it's not growing at that kind of.

Kevin Mark Steinke: Really high.

Kevin Mark Steinke: High rate that it was growing in 2023 and a record year.

Speaker Change: Okay. Thank you and then just lastly.

Kevin Mark Steinke: Any.

Kevin Mark Steinke: I know you reiterated the full year of 2020 for revenue guidance, but.

Kevin Mark Steinke: Any change.

Kevin Mark Steinke: At the segment level in terms of the growth outlook.

Kevin Mark Steinke: And each segment that gets you to that.

Kevin Mark Steinke: Consolidated number.

Speaker Change: I think it's probably a little too early to.

Kevin Mark Steinke: Obviously, the health care business is off to a great start. I continue to feel really good about the pipeline there. So I think that might be an area where you could expect to see potentially a little bit of upside. And, you know, the first quarter for the commercial segment was a little bit slower. That was more flat during the quarter.

Kevin Mark Steinke: I got the guidance or Kevin obviously, the health care business is off to a great start continue to feel really good about the pipeline. There. So I think that might be an area, where you could expect to see potentially a little bit of upside.

Kevin Mark Steinke: In the first quarter for the commercial segment.

Kevin Mark Steinke: This slower that was more flat during the quarter, so that might be where you can see a little bit of pressure on the growth rate.

John D. Kelly: So that might be where you see a little bit of pressure on the growth rate. But we'll continue to execute throughout the year. And I would anticipate by the time we get the next call, we can refine that a little bit. But those would be, maybe, in broad strokes, where we see a little bit of increased demand versus where it's been a little bit soft. Okay, thank you.

Kevin Mark Steinke: But we'll.

Kevin Mark Steinke: <unk> continued to execute throughout the year and I would anticipate by the time, we get the next call. We can refine that a little bit but that doesn't mean that in broad strokes, where do we see a little bit of increased demand versus where it's been a little bit softer.

Kevin Mark Steinke: Lastly, John, I don't know if you called out the..., you know, the dollar amount of the legal expenses that you don't expect to recur after the first quarter. So there's always some level of legal expense in our SG&A, but I described, Kevin, the amount that was above and beyond what would be the normal run rate of a couple million dollars. Okay, great.

Kevin Mark Steinke: Okay.

Kevin Mark Steinke: Lastly.

Kevin Mark Steinke: Karen I don't know if you'd called out the.

Karen: The dollar amount of the legal expenses that you don't expect to recur.

Karen: After the first quarter.

Karen: So there's always some level of legal expenses and our SG&A, but I described Kevin the amount that was above and beyond will be the normal run rate would be.

Speaker Change: Couple of million dollars.

Kevin Mark Steinke: Thanks for taking the questions. I appreciate it. Yeah, thanks, Kevin. Thank you. Once again, to ask a question, please press star 11 on your telephone. Again, that's star 11 to ask a question. All right, once again, that's star 11 to ask a question. Please stand by. Our next question comes from the line of Moshe Kotri of Wedbush Securities. Please go ahead, Moshe.

Speaker Change: Okay, great. Thanks for taking the questions I appreciate it.

Speaker Change: Yeah. Thanks, Kevin.

Speaker Change: Thank you once again to ask a question. Please press star one on your telephone again, that's star one one to ask a question.

Speaker Change: Yeah.

Speaker Change: Alright, once again Thats star one wanted to ask a question. Please standby.

Speaker Change: Our next question comes from the line of Moshe Cotchery of Wedbush Securities. Please go ahead Moshe.

Operator: So, thanks. Congratulations on very, very strong results. I believe, I think... Huron is the only company in the space that's actually recruiting. So what's embedded in terms of organic headcount growth in your calendar 24 guidance? That's my first question.

Moshe Cotchery: Okay. Thanks.

Moshe Cotchery: Congrats on a very very strong results I believe.

Moshe Cotchery:

Moshe Cotchery: <unk>.

Moshe Cotchery: Sure and is the only company in the space that's actually recruiting.

Moshe Cotchery: So what's embedded in terms of organic headcount growth in your calendar 'twenty for guidance. That's my first question. Thanks.

Moshe Kotri: In terms of guidance, so our revenue growth rate. For the year, from a projection perspective, the midpoint gap was around 10%, and the range around that was 7-13%. So, in terms of us expanding our talent pool during the year, we're expecting that to basically be on a similar trajectory as the revenue growth, so around that 10% range.

Speaker Change: In terms of in terms of the guidance so are <unk>.

Speaker Change: Revenue growth rate.

Speaker Change: For the year from protection perspective at the midpoint gas was around 10% and the range around that was 7% to 13%. So in terms of us expanding our talent pool during the year, we're expecting that to basically be of a similar trajectory in the revenue growth so around that around that 10% range.

John D. Kelly: And then there's lots of questions about visibility, but then if I had to kind of look at visibility for healthcare, education, and commercial now versus early calendar 24, let's say, three months ago, has that changed, improved, got worse? How would you define it? I would say within the Healthcare Summit it's improved during the quarter. In a couple different aspects, we've had some really nice opportunities in the pipeline. We've had some strong conversion of those opportunities, sales conversion into backlog. And so I think those things have improved visibility.

Speaker Change: Understood and then.

Speaker Change: Lots of questions about visibility, but then if I had to kind of look at visibility for health care education commercial now versus early calendar 'twenty for let's say three months ago has that changed improved.

John D. Kelly: And then we also have projects that have performance-based fee elements to them to the extent that we're able to successfully deliver for our clients. And I think our teams are executing very strongly on some of those projects, which gives us confidence that there's the potential for some revenue upside related to those projects as the year goes on. So I think healthcare will be an area where it's improved. I think education is very consistent with where we were three months ago, which is a positive story for us.

Speaker Change: Worse, how do you how would you kind of define.

Speaker Change: Define it.

Speaker Change: I would say within the health care. So I mean, it's improved during the quarter.

Speaker Change: In a couple of different aspects of it.

Speaker Change: Had some really nice opportunities in the pipeline we've had some.

Speaker Change: Strong conversion of those opportunities sales conversion into backlog. So I think those things have improved visibility and then we also have projects.

Speaker Change: That have performance based fee elements to that to the extent that were able to successfully deliver for our clients and I think our teams are executing.

Speaker Change: Very strongly in some of those projects, which gives us confidence that there is the potential for some revenue upside related to those projects as the year goes on so I think health care being area, whereas improved I think education is very consistent with where we were three months ago, and I think that and which is a positive story for us. We continue to see strong demand there really broad based demand across our different offerings.

John D. Kelly: We continue to see strong demand there and really broad-based demand across our different offerings, but I think that's been fairly consistent. And then commercial might be the one where the size of the pipeline continues to be robust, but in terms of visibility in the short term, that's where we've seen a little bit slower conversion, particularly on some of the digital projects. And I described it as maybe an area where there's a little bit more caution than maybe where we were three months ago.

Speaker Change: That's been fairly consistent in that commercial might be the one where the size of the pipeline.

Speaker Change: Continues to be robust, but in terms of visibility in the short term, that's where we've seen a little bit slower conversion, particularly on some of the digital projects and described.

Speaker Change: Described there is maybe an area, where there's a little bit more caution than maybe where we were three months ago.

John D. Kelly: Yeah, one addition to that is, you know, when you look at our financial advisory offerings, which we talked a little bit about, tend to have a very, very short sales cycle. I mean, literally, could be within a week to when an engagement might start. So those are the kind of things in that environment where, you know, it's kind of a balance to some of the other areas where we've seen a little bit of delay in decision making or projects that are just pushed off. Yep, I understand. And then, basically, the pipeline for digital is strong, but it's just not converting. Is that the right way of looking at it? Or are they not converting on time?

Speaker Change: <unk>.

Speaker Change: Additionally on that is when you look at our financial advisory.

Speaker Change: Offerings, which we talked a little bit about tend to have a very very short sales cycle I mean literally it could be.

Speaker Change: Within a week to when an engagement might start so those are the kinds of things in that environment, where it's kind of a balanced to some of the other areas that we've seen a little bit of a delay in decision, making or projects that have just pushed off.

Speaker Change: Yeah understood and then so basically the the pipeline in digital is strong, but it's just not converting is that the right way of looking at it or not converting on time.

Moshe Kotri: In commercial, yes, I'd say the other parts of the business are either stronger or, pretty, you know, healthcare has been stronger, education has been fairly consistent. I'd say commercial for digital is the area where it's a good-looking pipeline, but where the conversion has just been slower than maybe historical numbers. And then final question about your involvement in the operation: can we get some, maybe some transparency in terms of the headcount, maybe where it was a year ago, and what do you expect it to be during the next year or two?

Speaker Change: In commercial yes, I'd say any other parts of the business, it's either stronger or.

Speaker Change: Health care, some stronger education, it's been fairly consistent assay in commercial for digital is the area, where it's a good looking pipeline, but where the conversion has been slower than historical norms.

Speaker Change: And then final question about your India operation can we get some maybe some transparency in terms of the head count.

Speaker Change: Maybe where was it a year ago and what do you expect it to be during the next year or two.

Moshe Kotri: So from a total headcount perspective, roughly 28% of our total workforce is in India. In the three areas that are most prominently delivered by our global team, India is our digital business, which has about 1,000 of those employees; our managed services business, which has, call it, 500 or 600 of those employees.

Speaker Change: So from a total head count perspective, it's roughly 28% of our of our total Workforces in India and.

Speaker Change: Three areas that are most prominently.

Speaker Change: <unk> delivered by our global team, India is our digital business, which has about 1000 of those employees are managed services business, which has call.

Speaker Change: Call it.

Speaker Change: Five or 600 of those employees and then we do support a corporate enterprise with our team members in that location as well, which makes up the remainder of the head count.

John D. Kelly: And then we do support our corporate enterprise with our team members in that location, which makes up the remainder of that. And from a growth perspective, that's been an area that's been growing very strongly. If you were to go a little further back than just last year, it's grown significantly. Five years ago, it was probably the low hundreds in terms of employees that we had there, up to the 2,000 rough number that we have now in India.

Speaker Change: And from a growth perspective, that's been an area. That's been growing very strongly if you were to go a little further back than just last year, it's grown significantly five years ago was probably low.

Speaker Change: Hundreds in terms of ways that we have theyre up to.

Speaker Change: The.

Speaker Change: 2000.

Speaker Change: Rough number that we have now in India, I would say year over year. It was still a strong growth area, but I think.

Speaker Change: Just matured a little bit, let's say over the course of the past year.

John D. Kelly: I'd say year over year it was still a strong growth area, but I think it's just matured a little bit on this. Thanks. Thank you. Seeing no more questions in the queue, I'd like to turn the call back to Mr. Husserl.

Speaker Change: Understood. Thanks.

Speaker Change: Thank you.

Mr. Hussey: Seeing no more questions in the queue I'd like to turn the call back to Mr. Hussey.

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

Hussey: Thanks for spending time with US this afternoon, and we look forward to speaking with you again in July when we announce our second quarter results have a good evening.

Operator: That concludes today's conference call. Thank you, everyone, for your participation. Steinke, William Sutherland, Tobey Sommer, Andrew Nicholas, John Kelly, Jack Wilson, Huron Consulting Group Inc, ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Thank you for watching! ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Good afternoon, and welcome to Huron Consulting Group's webcast to discuss financial results for the first quarter, 2024. At this time, all conference call lines are in a listen-only mode.

Speaker Change: That concludes today's conference call. Thank you everyone for your participation.

Operator: Later, we will conduct our question and answer session for conference call participants, and instructions will follow at that time. As a reminder, this conference call is being recorded. Before we begin, I would like to point all of you to the disclosure at the end of the company's news release for information about any forward-looking statements that may be made or discussed on this call. The news release is posted on Huron's website.

Speaker Change: Yeah.

Speaker Change: [music].

Mark Hussey: Good afternoon, and welcome to Huron Consulting Group's first quarter 2024 earnings call. With me today are John Kelly, our Chief Financial Officer, and Ronnie Dale, our Chief Property Officer. Our first quarter revenue, I'm sorry, our first quarter results reflect our ongoing focus on achieving consistent revenue growth and margin expansion. Revenues grew 12% in the first quarter of 2023, driven by strong growth in our healthcare segment, as well as continued growth in our education segment, which furthers the segment's multi-year growth trajectory.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

[music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: So at that time as a reminder, this conference call is being recorded.

Speaker Change: Four we began I would like to point all of you to the disclosure at the end of the company's news release for information about any forward looking statements that may be made or discussed on this call. The news release is posted on Hurons website.

Speaker Change: Please review that information along with the filings with the SEC for a disclosure of factors that may impact subjects.

Speaker Change: Scott in this afternoon's webcast the company will be discussing one or more non-GAAP financial measures. Please look at the earnings release and on Hurons website for all of the disclosures required by the SEC, including reconciliation to the most comparable GAAP numbers and now I would like to turn.

Speaker Change: The call over to Mark Hussey, Chief Executive Officer, and precedents of Huron Consulting group. Mr. Huseby. Please go ahead.

Mark Hussey: The first pillar of our strategy is to continue accelerating growth in our largest industries, healthcare and education, where we're focused on building upon our leading competitive position. In the healthcare segment, first quarter revenues grew 21% over the prior year quarter. The increase in revenues in Q1 of 2024 was driven by strong fraud-based demand across our performance improvement, digital strategy and innovation, and financial advisory offerings. The operating environments for many health care organizations have been mixed in recent months.

Mark Hussey: Good afternoon, and welcome to the Huron consulting group's first quarter 2024 earnings call.

Mark Hussey: With me today are John Kelly, our Chief Financial Officer, and Ryan <unk>, Our Chief operating officer.

Mark Hussey: First quarter revenue I'm, sorry, our first quarter results reflect our ongoing focus on achieving consistent revenue growth and margin expansion revenues grew 12% over the first quarter of 2023, driven by strong growth in our healthcare segment as well as continued growth in our education segment, which furthers the segment's multiyear growth trajectory.

Mark Hussey: Our strong growth in the first quarter of 2023 was achieved on top of strong growth in the year ago quarter with Q1 of 2023 growth of 22% over the first quarter of 2022.

Mark Hussey: Our first quarter results also demonstrate our commitment to delivering on our growth strategy and financial goals shared at our 2022 Investor day.

Mark Hussey: Listing a low double digit annual revenue growth and expanding our adjusted EBITDA margins to mid teen levels, leading to annual high teen percentage adjusted EPS growth.

Mark Hussey: We believe achieving our financial goals together with a balanced capital deployment strategy that prioritizes moderate leverage share repurchase and targeted M&A will drive strong returns for our shareholders over time.

Mark Hussey: I'll now share some additional insight into the progress we've made on our strategy, while providing color into our first quarter performance.

As a reminder to achieve our goals, we're committed to executing against five strategic pillars.

The first pillar of our strategy is to continue accelerating growth in our largest industries healthcare and education, where we're focused on building upon our leading competitive positions.

Mark Hussey: And the health care segment first quarter revenues grew 21% over the prior year quarter.

Mark Hussey: The increase in revenues in Q1 of 2024 was driven by strong broad based demand across our performance in program digital strategy and innovation and financial advisory offerings.

Mark Hussey: The operating environments for many healthcare organizations are mixed in recent months. Some health systems continue to face extreme financial positions driving continued demand for our performance improvement and distress focused financial advisory offerings.

Mark Hussey: Other health care providers are seeing margins improve and we're now seeking opportunities to evolve their strategies and advanced our competitive positions by making strategic and operational investments. These organizations are creating demand for our digital strategy and innovation and non distressed financial advisory offerings.

Mark Hussey: As part of <unk> growth strategy, we continue to diversify our healthcare service portfolio over time to meet the broader needs of the market, which has yielded greater consistency in this segment's financial performance.

Mark Hussey: We expanded the offerings within our performance improvement business, while growing our health care focused strategy innovation digital and financial advisory offerings.

Mark Hussey: If you look back to 2014 10 years ago, our performance improvement offerings represented virtually 100% of segment revenues.

Mark Hussey: Fast forward to 2023, we've diversified our portfolio so that performance improvement offerings represent 46% of health care segment revenues.

We're confident that these investments, we're making to expand our health care offerings are paying off.

Mark Hussey: And we believe we're well positioned to address a wide array of opportunities and challenges facing our hospital and health system clients. Education segment revenues grew 7% in the first quarter of 2024 over the prior year quarter, driven by strong demand for our digital services and products. The education industry continues to face wide-ranging pressures. Top-line challenges include difficulty meeting enrollment and fundraising goals. Including increased governmental scrutiny, workforce disruptions, and a need to make significant technology investments, clients require a broad array of services and products to help them address these issues.

And we believe we are well positioned to address a wide array of opportunities and challenges facing our hospital and health system clients.

Mark Hussey: Education segment revenues grew 7% in the first quarter of 2024 over the prior year quarter, driven by strong demand for our digital services and products <unk>.

Mark Hussey: The education industry continues to face wide ranging pressures from topline challenges, including difficulty meeting enrollment in fund raising goals more challenging research funding sources to cost and regulatory pressures, including increased government governmental scrutiny workforce disruptions and the need to make significant.

Mark Hussey: Technology investments.

Mark Hussey: It's required a broad array of services and products to help them address these issues.

Mark Hussey: We continue to strengthen and expand our offerings in the education industry to comprehensively address our clients' needs. We're the leading firm in research institutions. The challenges of managing the highly complex research enterprise are increasing due to declines in funding for federal and commercial research and increased costs to conduct research. The research mission is critical to our client base, and our research businesses continue to be a strong source of growth for our education segment and a differentiator for our services among the most prominent research institutions.

We continue to strengthen and expand our offerings in the education industry to comprehensively address our clients' needs or the leading firm in the industry serving research institutions. The challenges of managing a highly complex research enterprise are increasing due to declines in funding from federal and commercial research.

Mark Hussey: And increased cost to conduct research research mission is critical to our client base and our research businesses continue to be a strong source of growth for our education segment and a differentiator for our services among the most prominent research institutions.

Mark Hussey: We continue to invest in strengthening our offerings in this area, including our Huron Research Suite software, which is the preeminent product in the market with over 600,000 users and over 500 institutions. The strength of our offering has yielded a client retention rate of over 99% across our suite of products.

Mark Hussey: We continue to invest in strengthening our offerings in this area, including Heron Research suite software, which is the preeminent product in the market with over 600000 users.

Mark Hussey: 500 institutions.

Mark Hussey: Strength of our offering has yielded a client retention rate of over 99% across our suite of products.

Mark Hussey: We also continue to expand our offerings to serve the broader needs of our mission-driven clients, particularly in education. For example, a recent acquisition of GG&A, one of the top philanthropy consulting firms, is creating new opportunities, not only in education but also across healthcare and other non-for-profit clients. Another example of our expanded offerings is our athletics practice. We began to focus on university athletics in 2020, and today we have worked with over 50 institutions, ranging from the top Division I conferences to FCS and smaller institutions, many of which are facing increasingly complicated operating environments stemming from the dramatic changes taking place in intercollegiate athletics. We help these organizations evaluate and execute upon their conference and athletic department strategies.

Mark Hussey: We're also continuing to expand our offerings to serve the broader needs of our mission driven clients, particularly in education. For example, our recent acquisition of G. G&A one of the top philanthropy and consulting firms is creating new opportunities not only in education, but also across health care and other non for profit clients.

Mark Hussey: Another example of our expanded offerings as our athletics practice and began to focus on University Athletics and 2020 and today, we have worked with over 50 institutions ranging from the top division warm conferences to FCS and smaller institutions, many of which are facing increasingly complicated operating environment stemming from the <unk>.

Mark Hussey: Dramatic changes taking place in intercollegiate athletics.

Mark Hussey: We helped the organization to evaluate and execute upon their conference and Athletic Department strategies.

Mark Hussey: Often have an outsized impact on the financials enrollment and branding of our large academic clients.

Mark Hussey: Our healthcare and education businesses have market pillars, which continued to propel their growth.

Mark Hussey: Our leading competitive positions deep client relationships high quality delivery and wide array of offerings position us well to be the partner of choice for health system University and research focused clients.

Our second strategic pillar is focused on growing our commercial industry presence in the first quarter of 2024 commercial segment revenues were largely flat driven by increases in revenue for our financial advisory offerings, partially offset by declines in our strategy and innovation and digital offerings.

Mark Hussey: In the first quarter of 2024, commercial segment industry revenues were largely flat, driven by increases in revenue for financial advisory offerings, partially offset by declines in our strategy and innovation in digital offerings. We continue to see our commercial clients taking a more cautious approach to executing large-scale initiatives and strategy-related engagements as uncertainties in the macroeconomic environment persist.

Mark Hussey: To see our commercial clients, taking a more cautious approach to executing large scale initiatives and strategy related engagements as uncertainties in the macroeconomic environment persists.

Mark Hussey: Our distressed financial advisory business continues to have a solid outlook, although at a more moderate level than the strong record results achieved in 2023. With our focus strategy, we believe the commercial industries will create new avenues of growth for Huron. The mix of our digital strategy and financial advisory offerings has created a more balanced portfolio from which we can continue to grow our presence in financial services, industrials, and manufacturing, and energy and utilities, while providing more consistency in our financial performance through different market cycles.

Mark Hussey: Our distressed financial advisory business continues to have a solid outlook, although at a more moderate level than the strong record results achieved in 2023.

Mark Hussey: With our focused strategy, we believe the commercial industries will create new avenues of growth for hero.

Mark Hussey: The mix of our digital strategy and financial advisory offerings has created a more balanced portfolio from which we can continue to grow our presence in financial services, industrial and manufacturing and energy and utilities, while providing more consistency in our financial performance through different market cycles.

Speaker Change: In 2023, our digital capability grew to over <unk> 5 billion.

Speaker Change: A key milestone for that business and a testament to the collective investments we've made in technology data and analytics across all industries.

Speaker Change: <unk> to be a market leader and our digital offerings. We were named best in class in health care for our ERP business transformation and implementation leadership as well as consulting services in the payer market.

Mark Hussey: We remain best in class in healthcare for ERP business transformation and implementation leadership, as well as IT consulting services in the payer market. We've also been awarded recognition for driving innovation by other technology partners. And we're incredibly proud of the work we're doing and how we continue to expand our offerings to meet the rapidly evolving technology, data, and analytics needs of our clients. Intelligent automation, including the use of generative AI, is one area that is of great prominence and exploration in the market today.

Speaker Change: Also been awarded recognitions for driving innovation by other technology partners and we're incredibly proud of the work, we're doing and how we continue to expand our offerings to meet the rapidly evolving technology data and analytics needs of our clients.

Speaker Change: Intelligent automation, including the use of generative AI is one area that is of great prominence and exploration in the market today, our automation analytics and AI services revenues grew to over $50 million in 2023, demonstrating the value we bring to our clients and the growing significance of these advanced technology.

Speaker Change: He is in the market.

Speaker Change: Our work today spans advising clients on our intelligent automation strategies and roadmaps, including the data foundation needed to be successful through to the implementation of distinct use cases and comprehensive intelligent automation programs.

Speaker Change: Let me provide two brief examples of our working with clients to apply AI.

Speaker Change: First we're working with our commercial plan to establish a centralized AI capability center that will provide a platform to responsibly govern 30 on a program while also incubating high impact solutions across the business.

These are only two examples of many where we're leaning in to enable our clients businesses through the use of AI.

Mark Hussey: Expanding our digital capabilities, including our intelligent automation offerings through organic and inorganic investments, will continue to be an important driver of growth across our business for many years to come, as our clients focus on driving growth and productivity in their own highly competitive markets through the use of technology, data, and analytics. Now let me turn to our last two strategic pillars, which are more financially... First, we're executing our margin improvement levers to achieve enhanced profitability. As it relates to margin expansion, a company-wide focus on improving profitability has yielded solid results. 2020-2023, our full-year adjusted EBITDA margin is expected to increase 200 basis points. And full-year adjusted diluted earnings per share increased 128%.

Speaker Change: Expanding our digital capabilities, including our intelligent automation offerings offerings drove organic and inorganic investments will continue to be an important driver of growth across our business for many years to come.

Speaker Change: <unk> is focused on driving growth and productivity in their own highly competitive markets through the use of technology data and analytics.

Speaker Change: Now, let me turn to our last two strategic pillars, which are more financially photos first we're executing on our margin improvement levers to achieve enhanced profitability.

Speaker Change: As it relates to margin expansion, a companywide focus on improving profitability has yielded solid results.

Speaker Change: In 2020% to 2023% are full year adjusted EBITDA margin has increased 200 basis points in full year adjusted diluted earnings per share has increased 128%.

Mark Hussey: We continue to feel confident in our ability to improve our margins across our robust global platform, which will drive further efficiency as we scale, while continuing our focus on areas such as driving improved utilization, pricing utilization, and SG&A leverage. Our final pillar focuses on deploying capital to accelerate our strategy and return capital to our shareholders. Since our investor day in March of 2022, which is the quarter just ended, we've repurchased 3.6 million shares at a weighted average price of $78.36, representing 16.5% of our common stock outstanding as of December 31st, 2021.

Speaker Change: Continuing to feel confident in our ability.

Speaker Change: To improve our margins across our robust global platform, which will drive further efficiencies as we scale, while continuing our focus in areas such as driving improved utilization pricing utilization and SG&A leverage.

Speaker Change: Our final pillar focuses on deploying capital to accelerate our strategy and return capital to our shareholders.

Speaker Change: Since our Investor day in March of 2022 and through the quarter. Just ended we repurchased three 6 million shares at a weighted average price of $78 36.

Speaker Change: Representing 16, 5% of our common stock outstanding as of December 31, 2021.

Mark Hussey: In 2024, we expect to execute a balanced capital allocation strategy across share repurchases, debt repayment, and tuck-in acquisitions. We believe that combining the capabilities and talent from acquisitions to enhance our competitive position, such as a recent TG&A acquisition, will drive strong growth and returns for our shareholders. And finally, let me acknowledge the heart of our strategy, our people.

Speaker Change: In 2024, and we expect to execute a balanced capital allocation strategy across share repurchases debt repayment and tuck in acquisitions.

Speaker Change: Believe that combining the capabilities and talent from acquisitions to enhance our competitive position such as our recent <unk> acquisition will drive strong growth and returns for our shareholders.

Finally, let me acknowledge the heart of our strategy our people.

Mark Hussey: We have and will continue to invest in our incredibly talented team and strong collaborative cause. Our competitive advantage is driven by the strength and depth of our team and our company culture, which drives how we work together and delivers on the most complex challenges of our clients. It creates an environment where we're constantly innovating new offerings and advancing our business collectively as a unified team. Our ability to attract and retain top talent is demonstrated by our headcount growth of 41% from the end of 2021 to the end of 2023, coupled with consistently low attrition and high engagement scores.

Speaker Change: Have and will continue to invest in our incredibly talented team and strong collaborative culture a competitive.

Speaker Change: <unk> advantage is driven by the strength and depth of our team and our company culture, which drives how we work together and to deliver on the most complex challenges our clients creates an environment, where we're constantly innovating new offerings and advancing our business collectively as a unified team.

Speaker Change: Building to attract and retain top talent as demonstrated by our head count growth of 41% from the end of 2021 to the end of 2023, coupled with consistently low attrition and high engagement scores are distinct culture, coupled with strong career advancement and development opportunities provides a stable platform.

Mark Hussey: Our distinct culture, coupled with strong career advancement and development opportunities, provides a stable platform for ongoing growth, not only for our people but also for our business. Now, let me turn to our outlook for the year. Today, we affirm our 2024 revenue and adjusted EBITDA margin guidance, and we're raising our adjusted earnings per share guidance to a range of $5.60 to $6.10. We continue to believe our growth trajectory is strong, given the expected demand in our ed markets across healthcare, education, and commercial, our strong competitive positions, and our deep client relationships.

Speaker Change: Ongoing growth I believe.

Speaker Change: For our people, but also for our business.

Speaker Change: Now, let me turn to our outlook for the year today, we have affirmed our 2020 for revenue and adjusted EBITDA margin guidance and we're raising our adjusted earnings per share guidance to a range of $5 60.

Speaker Change: The $6 intensive.

Speaker Change: We continue to believe our growth trajectory is strong given the expected demand in our end markets across health care education, and commercial are strong competitive positions and our deep client relationships given our focus we have.

Mark Hussey: Given our focus, we have a unique breadth of our offerings, depth in our talent, and relevance in our subject matter expertise that allows us to be nimble and innovative, yet have the credentials and experience to compete and win against much larger competitors. Let me close by saying that our commitment to our growth strategy is evident in our recent performance, including our first quarter results. Our progress would not be possible without the focus and dedication of our entire team.

Breadth in our offerings depth in our talent and relevance and our subject matter expertise that allows us to be nimble and innovative yet have the credentials and experience to compete and win against much larger competitors.

Speaker Change: Let me close by saying that our commitment to our growth strategy as evidenced in our recent performance, including our first quarter results, our progress would not be possible without the focus and dedication of our entire team and I want to thank all of them for supporting each other our clients and our business as we strive to make a lasting impact and the work that we do each and every day.

Mark Hussey: And I want to thank all of them for supporting each other, our clients, and our business as we strive to make a lasting impact in the work that we do each and every day. Now, I will turn it over to John for a more detailed discussion of our financials. Thank you, Mark, and good afternoon, everyone. Before I begin, please note that I will be discussing non-GAAP financial measures, such as EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and Free Cash Flow. Our press release, 10-Q, and investor relations page on the Huron website have reconciliations of these non-GAAP measures, the most comparable GAAP measures.

Speaker Change: Now, let me turn it over to John for a more detailed discussion of our financials.

Speaker Change: John.

John D. Kelly: Thank you Mark and good afternoon, everyone.

John D. Kelly: Before I begin please note that I'll be discussing non-GAAP financial measures such as EBITDA adjusted EBITDA adjusted net income adjusted EPS and free cash flow.

John D. Kelly: Our press release, 10-Q, and Investor Relations page on the Huron website have reconciliations of these non-GAAP measures. The most comparable GAAP measures along with a discussion of why management uses these non-GAAP measures and why management believes they provide useful information to investors regarding our financial condition and operating results.

Speaker Change: Before discussing our financial results for the quarter I'd like to acknowledge two housekeeping items.

John D. Kelly: Along with the discussion of why management uses these non-GAAP measures and why management believes they provide useful information to investors regarding our financial condition and operating results. Before discussing our financial results for the quarter, I'd like to acknowledge two housekeeping items. First, our first quarter results reflect the acquisition of DG&A, which closed on March 1st, and as such, one month of DG&A's operating results are included within the education segment. Second, in conjunction with the continued refinement of our operating model. We reclassified certain revenue-generating professionals within our digital capability from our healthcare and education segments to our commercial segments, reflecting the flexibility of these professionals to provide services across all of our industries.

Speaker Change: First our first quarter results reflect the acquisition of <unk>, which closed on March one and as such one month of <unk> operating results are included within the education segment.

Second in conjunction with the continued refinement of our operating model.

Speaker Change: Classified certain revenue generating professionals within our digital capability of our healthcare and education segments to our commercial segment flooding flexibility of these professionals to provide services across all of our industries inclusive health care and education.

John D. Kelly: We have provided supplemental materials to provide additional details on this reclassification, which are posted in the investor relations section of our website. Now, I will share some of the key financial results of the first quarter. Revenues for the first quarter of 2024 were $356 million, up 12% from $317.9 million in the same quarter of 2023. The increase in revenues for the quarter is driven by strong growth in our health care segment and continued growth in our education sector.

We have provided supplemental materials to provide additional detail to this reclassification, which are posted on the investor Relations section of our website.

Speaker Change: Now I will share some of the key financial results for the first quarter.

Speaker Change: Revenues for the first quarter of 2024 were $356 million.

Speaker Change: Up 12% from $317 9 million in the same quarter of 2023.

Speaker Change: The increase in revenues for the quarter was driven by strong growth in our healthcare segment continued growth in our education segment.

Speaker Change: Net income for the first quarter of 2024 with $18 million for 95 per diluted share compared to net income of $13 4 million or <unk> 68 per diluted share in the first quarter of 2023.

Our effective income tax rate in the first quarter of 2024 with negative two 5% as we recognized an income tax benefit on our income before taxes, driven primarily by discrete tax benefits for share based compensation awards during the quarter and nontaxable gains on the investments used to fund our deferred.

Speaker Change: Compensation liability.

John D. Kelly: Justin Evenough earned $33.8 million in Q1 2024 for 9.5% of revenue, compared to $29.5 million for 9.3% of revenues in Q1 2023. The increase in adjusted EBITDA for the quarter was primarily due to the increase in segment operating income, partially offset by an increase in corporate expenses.

Speaker Change: Adjusted EBITDA was $33 $8 million in Q1, 2024, or nine 5% of revenues compared to $29 5 million or nine 3% of revenues in Q1 2023.

Speaker Change: The increase in adjusted EBITDA for the quarter was primarily due to the increase in segment operating income partially offset by an increase in corporate expenses, which included certain third party legal expenses that are not expected to continue at the same level in future quarters.

John D. Kelly: Including certain third-party legal expenses that are not expected to continue at the same level in future quarters. Adjusted net income was $23.3 million for $1.23 per diluted share in Q1 2024 compared to $17.1 million or $0.87 per diluted share in the first quarter of 2023, resulting in a 41% increase in adjusted diluted earnings per share over Q1 2023. Now we'll discuss the performance of each of our operating segments. The healthcare segment generated 51% of total company revenues during the first quarter of 2024.

Speaker Change: Adjusted net income was $23 3 million from $1 23 per diluted share Q1, 2024, compared to $17 1 million or <unk> 87 per diluted share in the first quarter of 2023, resulting in a 41% increase in adjusted diluted earnings per share over Q1 2020.

Speaker Change: Three.

Speaker Change: Now I'll discuss the performance of each of our operating segments.

Speaker Change: The healthcare segment generated 51% of total company revenues during the first quarter of 2024.

John D. Kelly: This segment boasts revenues of $180.7 million, up $31.7 million, or 21.3% from the first quarter of 2023. The increase in revenues in the quarter reflects strong demand for our performance improvement, digital, strategy, and innovation, and financial advisory offerings. Consulting and Managed Services and Digital Capabilities grew 22% and 19%, respectively, in the first quarter, reflecting the continued broad-based demand for our offering.

Speaker Change: The segment posted revenues of $187 million up $31 $7 million or 21, 3% in the first quarter of 2023.

Speaker Change: The increase in revenues in the quarter reflects strong demand for our performance improvement digital strategy and innovation and financial advisory offerings.

Speaker Change: Consulting and managed services and digital capabilities grew 22% and 19% respectively. In the first quarter, reflecting the continued broad based demand for our offerings.

John D. Kelly: Operating income margin for health care was 23.6% in Q1 2024 compared to 21.6% in Q1 2023. The increase in margin is primarily due to revenue growth and outpaced compensation costs for our revenue-generating professionals, partially offset by an increase in practice administration and meetings expenses, as a percentage of revenue. The education segment generated 31% of total company revenues during the first quarter of 2024.

Speaker Change: Operating income margin for healthcare was 23, 6% in Q1 2024 compared to 21, 6% in Q1 2023.

Speaker Change: The increase in margin is primarily due to revenue growth and outpaced compensation cost for our revenue generating professionals.

Really offset by an increase in practice administration meeting expenses as a percentage of revenues.

Speaker Change: The education segment generated 31% of total company revenues during the first quarter of 2024.

John D. Kelly: The education segment generated revenues of $111.6 million, up $7.4 million or 7.1% from the first quarter of 2023, and was achieved on top of strong growth in the year-ago quarter with Q1 2023 growth of 29% over Q1 2022. Revenues in the first quarter of 2024 included $1.3 million from our acquisition of GG&A. The increase in revenues in the quarter is driven by strong demand for our technology and analytics services and software products within our digital capability.

Speaker Change: The education segment posted revenues of $111 $6 million up $7 4 million or seven 1% from the first quarter of 2023 and.

Speaker Change: And was achieved on top of strong growth and a year ago quarter with Q1 2023 growth, 29% over Q1 2022.

Speaker Change: Revenues in the first quarter of 2024 included $1 $3 million from our acquisition of G&A.

Speaker Change: The increase in revenues in the quarter was driven by strong demand for our technology and analytics services and software products within our digital capability.

Speaker Change: The operating income margin for education was 19, 7% for Q1 2024 compared to 22, 2% the same quarter in 2023.

Speaker Change: The decrease in operating income margin in the quarter was primarily driven by increased compensation cost for our revenue generating professionals as.

Speaker Change: As a percentage of revenue, partially offset by a reduction in contractor expenses.

John D. Kelly: The Commercial segment generated 18% of total company revenues during the first quarter of 2024, posting revenues of $63.6 million compared to $64.7 million in the first quarter of 2023. However, revenues were largely flat in the quarter, with increases in demand for our financial advisory offerings. Offset by declines in revenue within our strategy and innovation in digital online. Operating Income Margin for the Commercial Segment. 22.1% for Q1 2024, compared to 21.7% for the same quarter in 2023.

The commercial segment generated 18% of total company revenues during the first quarter of 2024.

Speaker Change: <unk> posted revenues of $63 $6 million compared to $64 $7 million in the first quarter of 2023.

Speaker Change: Revenues were largely flat in the quarter increases in demand for our financial advisers financial advisory offerings offset by declines in revenue within our strategy and innovation and digital offerings.

Speaker Change: Operating income margin for the commercial segment was 22, 1% for Q1 2024 compared to 21, 7% for the same quarter in 2023 the.

Speaker Change: The increase in operating income margin in the quarter was primarily driven by decreases in compensation costs for our revenue generating professionals.

Speaker Change: Corporate expenses not allocated at the segment level and excluding restructuring charges were $52 $5 million in Q1, 2024 compared to $44 $1 million in Q1 2023.

John D. Kelly: Allocated corporate expenses in the first quarter of 2024 and 2023 included $2.4 million and $1.9 million, respectively. The following is a list of expenses related to the increase in the liability of our Deferred Compensation Plan, which is offset by the investment gain and the assets used to fund that plan collected on other acres. Excluding the impact of the Deferred Compensation Plan in both periods, unallocated corporate expenses increased $8 million, primarily due to increases in legal expenses.

Speaker Change: Unallocated corporate expenses in the first quarter of 2024, and 2023, including $2 $4 million and $1 $9 million, respectively of expense related to the increase in the liability or deferred compensation plan.

Speaker Change: It is offset by investment gains on the assets used to fund that plan reflected in other income.

Speaker Change: Excluding the impact of the deferred compensation plan in both periods, our unallocated corporate expenses increased $8 million, primarily due to increases in legal expenses.

John D. Kelly: Compensation expense for our support personnel and other losses. Legal expenses, which are not expected to continue at the same level in future quarters, primarily relate to professional fees for a legal matter where Huron is a plaintiff and M&A-related expenses. Now turning to the balance sheet and casting. Total debt as of March 31st, 2024 was $574 million, consisting of our $275 million term loan and $299 million of borrowings on our revolving credit facility.

Speaker Change: Compensation expense for our support personnel and other losses.

Speaker Change: Legal expenses, which are not expected to continue at the same level in future quarters, primarily relates to professional fees for legal matter, where youre headed the plaintiff M&A related expenses.

Speaker Change: Now turning to the balance sheet and cash flows.

Speaker Change: Total debt as of March 31, 2024 was $574 million, consisting of our $275 million term loan and $299 million of borrowings on our revolver.

John D. Kelly: We finished the quarter with cash of $19 million for net debt of $555 million. This was a $243 million increase in net debt compared to Q4 2023, primarily due to the payment of our annual cash bonuses, share repurchases, and the acquisition of GG&A all during the quarter. Regarding share reports During the quarter, we used $62.3 million to repurchase approximately 625,000 shares, representing 3.4% of our common stock outstanding as of December 31st, 2023. As of March 31, 2024, $24 million remained available for share repurchases under our current share repurchase program.

Speaker Change: We finished the quarter with cash of $19 million for net debt of $555 million.

Speaker Change: This was a $243 million increase in net debt compared to Q4 2023, primarily due to the payment of our annual cash bonuses share repurchases and the acquisition of G&A all during the quarter.

Speaker Change: Regarding share repurchases during the quarter, we used $62 $3 million.

Speaker Change: Approximately 625000 shares representing three 4% of our common stock outstanding as of December 31, 2023.

Speaker Change: As of March 31, 2024, $24 million remained available for share repurchases under our current share repurchase program.

Speaker Change: The pace of share repurchase activity to moderate through the remainder of the year.

Speaker Change: Our leverage ratio as defined in our senior Bank agreement was two seven times adjusted EBITDA as of March 31, 2024, compared to two eight times adjusted EBITDA as of March 31 2023.

As a reminder, our first quarter typically represents a seasonal high leverage ratio given the payout of our annual bonuses in March.

Speaker Change: Cash flow used in operations in the first quarter of 2024 was $137 million.

Speaker Change: At $8 $8 million to invest in capital expenditures.

Speaker Change: Of internally developed software costs and purchases of property and equipment.

John D. Kelly: Purchases of property and equipment, resulting in a negative free cash flow of $139.5 million. We continue to expect full-year free cash flow to be in a range of positive $115 to $145 million. DSO came in at 91 days for the first quarter of 2024, compared to 87 days for the fourth quarter of 2023 and 83 days for the first quarter. DSO was elevated during the first quarter of 2024 relative to the other periods due to certain larger health care and education industry projects with contractual payment terms that will result in cash payments in the second and third quarters of 2024.

Speaker Change: <unk>, a negative free cash flow of $139 $5 million.

Speaker Change: We continue to expect full year free cash flow to be in a range of positive $115 million to $145 million.

Speaker Change: DSO came in at 91 days for the first quarter of 2024 compared to 87 days for the fourth quarter of 2023, and 83 days for the first quarter of 2023.

Speaker Change: DSO was elevated during the first quarter of 2024 relative to the other periods due to certain larger health care and education industry projects with contractual payment terms that will result in cash payments in the second and third quarters of 2024.

Speaker Change: We expect DSO to normalize in the 75 to 85 day range by the end of the year.

John D. Kelly: Finally, let me turn to our guidance for the full year 2024. As Mark mentioned, we are affirming our revenue and adjusting EBIT accounts, revenues before reimbursable expenses in a range of 1.46 billion dollars to 1.54 billion dollars, and adjusted EBITDA in a range of 12.8% to 13.3% of revenue. Today we are raising our adjusted non-GAAP EPS to a range of $5.60 to $6.10.

Speaker Change: Finally, let me turn to our guidance for the full year 2024.

Speaker Change: As Mark mentioned, we are affirming our revenue and adjusted EBIT guidance with revenues before Reimbursable expenses in a range of $1 $46 billion to $1 five $4 billion.

Speaker Change: Adjusted EBITDA in a range of 12, 8% to 13, 3% of revenues.

Speaker Change: Today, we are raising our adjusted non-GAAP EPS to a range of $5 60.

Speaker Change: $6 10, that's.

John D. Kelly: The following slide is a summary of the results of the 2018-2019 fiscal year. The fiscal year was reflective of a now lower anticipated full-year effective tax rate in the range of 26 to 28 percent and a lower weighted average diluted share base for the year based on the accelerated pace of share repurchases during the first quarter.

Speaker Change: Reflective of a now lower anticipated full year effective tax rate in the range of 26% to 28% and a lower weighted average diluted share base for the year based on the accelerated pace of share repurchases during the first quarter.

Operator: Thanks, everyone. I would now like to open the call for questions. Operator?

Speaker Change: Thanks, everyone I would now like to open the call for questions.

Speaker Change: Later.

Operator: Thank you. Ladies and gentlemen, if you have a question at this time, please press star one, one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, you may do so by pressing star one, one again.

Speaker Change: Thank you ladies and gentlemen, if you have a question at this time. Please press star one on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. You may do so by pressing star one again.

Speaker Change: One moment for our first question.

Speaker Change: Which comes from the line of Andrew Nicholas of William Blair <unk> Company. Your question. Please Andrew.

Andrew Owen Nicholas: I wanted to start with the health care segment's growth. A really strong quarter on that front. Mark, you alluded to kind of broad-based demand across that segment, but I was hoping you could unpack, you know, where the growth rate sits across PI, digital, strategy, and innovation, financial advisor, just kind of getting a sense for under the hood, kind of where the strength is, if there is a rotation between the different segments as, you know, the end market seems to get a bit healthier with time. That would be really helpful to kind of understand.

Andrew Owen Nicholas: Thank you good afternoon everybody.

Andrew Owen Nicholas: I wanted to start on the healthcare segment's growth.

Andrew Owen Nicholas: Really strong quarter on that front.

Andrew Owen Nicholas: Mark you alluded to kind of broad based demand across that segment, but I was hoping you could unpack.

Andrew Owen Nicholas: Where the growth rates that are cross <unk>.

Andrew Owen Nicholas: Digital strategy and innovation financial adviser, but just kind of getting a sense for under the hood kind of where the strength is if there is a rotation.

Andrew Owen Nicholas: Between the different segments as you know the end market seems to get a bit healthier with time.

Speaker Change: That would be really helpful to kind of understand.

John D. Kelly: Yeah, John, why don't you, why don't you get some color into some of the some of the trends by area? Yeah, I'm happy to do that. I'll start there. And then Mark, you can give the color commentary from a breakout within the healthcare business. Then you see a lot of strength, Andrew, within our consulting part of the business, and particularly our performance improvement part of the business. Year over year, that was up north of 20% between the two years.

Speaker Change: John Why don't you why don't you give some color into some of the some of the trends by area.

John D. Kelly: Yes, I'm happy to do that I'll start there and then mark can give the color commentary.

John D. Kelly: Yeah.

John D. Kelly: Breakout within the healthcare business continue to see a lot of strength Andrew within our.

John D. Kelly: Consulting part of the business and particularly our performance improvement part of the business.

John D. Kelly: Year over year that was up.

John D. Kelly: North of north of 20%.

John D. Kelly: Between the two years, so consistent with marks comments, that's a part of the business where even though.

John D. Kelly: So consistent with Mark's comments, that's a part of the business where, even though, year over year, we've seen some improvement in the industry in terms of average profit margins and things like that, there are still a number of clients that are facing financial strain right now, and we see continued demand for those types of projects. From a digital perspective, we continue to see really good growth overall, tied team growth from a digital perspective. I think that's reflective of the other part of the market, where we see clients that have reached more financial stability now turning around and really starting to execute on some of their investment plans, which oftentimes includes improving their digital infrastructure. So we've seen good growth there. And then you referenced strategy and financial advisory as well.

John D. Kelly: Year over year, we've seen some improvement in the industry in terms of average profit margins and things like that there's still a number of clients that are facing financial strained right now and we see continued demand for those types of projects.

John D. Kelly: From a digital perspective, we continue to see.

John D. Kelly: Really good growth overall.

John D. Kelly: High teen growth from a digital perspective, I think that's reflective of really the other apartment market, where we see clients that have reached more financial stability now turning around and really starting to execute on some of their investment plans, which oftentimes includes improving the digital infrastructure. So we've seen good growth there and then you referenced as well.

John D. Kelly: In financial Advisory and those are two smaller basis of revenue within the business, but areas that are really performing well and so from a percentage perspective there off.

John D. Kelly: Those are two smaller bases of revenue within the business but areas that are really performing well. And so from a percentage perspective, they're up, call it north of 25% year over year, but they're starting from a smaller base, but I think those are both areas where we see a lot of demand with our clients right now, in terms of working on the strategies, as well as starting to think about balance sheet considerations, where our financial advisory team plays really well with those clients. So hopefully, that gives you some color.

John D. Kelly: Call it north of 25% year over year, but they're starting from a smaller base, but I think those are both areas, where we see a lot of demand with our clients right now in terms of.

John D. Kelly: Working on our strategies as well as starting to think about balance sheet considerations, where our financial advisory team plays really well to those clients. So that hopefully that gives some color yeah, I would say Andrew to them onto my comment on the.

Mark Hussey: And I would say, Andrew, to my comment on the... Next view of margins within the sector really depends a little bit on market-specific situations, but I would tell you that, you know, collectively, it's, you know, in those systems that are having performance improvement issues, there are also aspects that address every one of the businesses. So, it's not as if performance improvement is only on one side and not on the other, so it really is just maybe leaning more heavily on one side of that mix. And I'd say our power in the market right now is really our ability to bring that team together very collectively in coordination and seamlessly across each client situation, which has really enabled us to differentiate and have a very strong offering for clients in terms of driving value. And maybe, Andrew, I'll jump in with one last.

John D. Kelly: Mixed view of margins within within the sector.

Speaker Change: It really depends a little bit on market specific situations, but I would tell you that.

Speaker Change: So collectively it's.

Speaker Change: Some of it in those systems that are having performance improvement issues are also aspects that address every one of the businesses. So it's not as if performance improvement is only on one side and not on the other.

So it really is just maybe leaning heavily more heavily on one side of that mix and I would say our power in the market right now is really our ability to bring that team together very collectively and coordination and seamlessly across each client's situation, which has really enabled us to differentiate and have a very strong offering.

Speaker Change: For for clients in terms of driving value.

Speaker Change: Maybe Andrew I'll jump in with one last one.

Mark Hussey: I just want to make a point as it relates to the strategy business and as it relates to our healthy financial advisor business. The percentages probably aren't as helpful to think of, but if you look at a year ago at this time, those were low single-digit million-dollar businesses for us that are now operating more at the mid-team million-dollar level, and we continue to see, and we're investing in that growth that we' So that's an area within the portfolio that we're pretty excited about in terms of adding growth to the healthcare business. No, that's really helpful.

Andrew Owen Nicholas: As it relates to the strategy business and areas as it relates to our pulp healthy financial advisory business, the percentages, probably arent as helpful to think of.

Andrew Owen Nicholas: But if you look at a year ago at this time those were low single digit million dollar businesses for US right now are operating more in that mid teen million dollar level and we continue to see we are investing in that growth that we've seen and continue to see demand.

Andrew Owen Nicholas: Trajectory like that so that's an area within the portfolio that we're pretty excited about in terms of adding growth to the health care business.

Speaker Change: No. That's really helpful. I guess I would've thought maybe a little bit more of a rotation, but it sounds like.

Everything is still very much hitting on all cylinders I appreciate that and then maybe for my follow up on the margin front.

Pretty encouraged by the margin expansion, even with a little bit lower utilization in the quarter and some really strong head count growth. So can you talk about kind of the ability to expand margins despite lower utilization and then.

Speaker Change: Somewhat relatedly I think it's up about 20 basis points year over year in the first quarter you stuck to the full year margin expansion guidance, so what what dynamics.

Speaker Change: Allow you to expect.

Speaker Change: Maybe more more margin expansion on year over year basis through the rest of the year in the second half as opposed to the start to the year. Thank you.

Andrew Owen Nicholas: I can start there. We had a few items during the quarter that were not expected to repeat as the year went on that added some extra expense. So we're actually very pleased with the 20 basis points of margin expansion in the quarter, given that we had some of those expenses. And one such item was that one of our larger teams had a practice meeting during the quarter. We typically do one of those a year, not necessarily the same team every year, but the corresponding large event like that was during the fourth quarter of this year.

Speaker Change: Sure Andrew I can start there.

Speaker Change: A few items during the quarter.

Speaker Change: That were.

Speaker Change: Not expected to repeat in the year goes on that add some extra expense. So we're actually very pleased with the 20 basis points of marketing expansion in the quarter given that we had some of those expenses and one such item was on one of our larger teams had a practice meeting during the quarter. We typically do one of those a year not necessarily the same team every year.

Speaker Change: But the corresponding large event like that was during the fourth quarter of this year. It was during the first quarter. This year. So that was a little bit of an unfavorable comparison that alone had about a 70 basis point impact on margins during the quarter.

John D. Kelly: It was during the first quarter of this year, so that was a little bit of an unfavorable comparison. That alone had about a 70 basis point impact on margins during the quarter. We also, as I referenced in my remarks, had some deal-related expenses that came through during the quarter. We were aware of the closing of the GG&A acquisition.

Speaker Change: We also as I referenced in my remarks.

Speaker Change: Had some deal related expenses.

Speaker Change:

Speaker Change: That came through during the quarter Youre aware of the closing of the G&A acquisition we.

John D. Kelly: We had some one-time items related to earn out valuations that also came through during the quarter. And then, one final item that we referenced, we did have an uptick in legal expenses during the quarter that we're not expecting to repeat at that level as the year goes on. So there were some headwinds during the quarter related to some of those factors that are either things that I dropped out like the, for value.

We got some one time items related to earn out valuations.

Speaker Change: That also came through during the quarter.

Speaker Change: And then one final item that we referenced was we did have an uptick in legal expenses during the quarter that were not expecting to repeat at that level of the year goes on so there was some.

Speaker Change: Headwinds during the quarter related to some of those factors that are either things that have been.

Speaker Change: Hi.

Adjusted out like the.

Speaker Change: Right.

Speaker Change: Fair value.

John D. Kelly: Thank you. Thank you. The Earn Out Fair Value Adjustment and then one-time items that we don't expect to repeat later in the quarter. So, despite the 20 basis points of improvement during the first quarter, that's what gives us confidence that we'll be able to accelerate that margin expansion. Thank you. Our next question comes from the line of Tobey Sommer of Truist Securities. Your question, please, Tobey. Hey, good afternoon. This is Jasper Bibon for Tobey.

The earn out fair value adjustments and then onetime type items that we don't expect to repeat later in the quarter. So despite the 20 basis points of improvement during the first quarter and Thats, what gives us confidence that we'll be able to accelerate that margin expansion as the year goes on.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Tobey Sommer.

Tobey O'Brien Sommer: Sure with Securities. Your question. Please Toby.

Tobey O'Brien Sommer: Can you maybe frame for us, let's assume, for health care performance improvement growth in your 24 guidance? And maybe I missed it in the earlier discussion about different practice groups within health care, but how's the student group doing right now? So from a performance improvement perspective during the year, I think that's an area of the business where the guidance initially at the beginning of the year called for more mid to upper single-digit growth within that business, just because they had such a record performance in 2023.

Tobey O'Brien Sommer: Hey, good afternoon. This is jasper bibb on for Tobey.

Jasper Bibb: Could you maybe frame for us what's assumed for healthcare performance improvement growth near 24 guidance and.

Jasper Bibb: Maybe I missed it in the earlier discussion about.

Jasper Bibb: Different practice groups within health care, but how's the Studer group doing right now.

Okay.

Jasper Bibb: Yes, so from a performance improvement perspective during the year I think that's an area of the business, where the guidance initially beginning year called more.

Jasper Bibb: Mid to upper single digit growth within that business, just because they had such a record performance in 2023, obviously, we're off to a good start in that business with the growth that I described in the first quarter, that's outpacing that and so that's an area where there's some potential for upside as the year goes on.

Tobey O'Brien Sommer: Obviously, we're off to a good start in that business with the growth that I described in the first quarter that's outpacing it. So that's an area where there's some potential for upside if the year goes on. But, you know, these functions were relatively conservative in the original plan. And then as far as the People business goes with the old student group business they referred to, that's an area of the business where we're planning for modest, you know, call it low single district or health care and care. I got it.

Jasper Bibb: But the assumptions were relatively conservative in the original plan and then as far as the.

Jasper Bibb: People business go with the old Studer group business that you referred to.

Jasper Bibb: That's an area of the business, where we're planning for a modest call it low single digit growth occurring here.

Mark Hussey: That's helpful. I guess maybe stepping back, any thoughts on the FTC's move to ban non-competes and what that might mean for your business? Yeah, this is Mark. We're, you know, at this point. First of all, we all know it's going to get litigated. So I don't think we really will know the outcome for several months. But having said that, we are not overly concerned about it in our business. It is certainly something we use and manage all the time. And, you know, Candling might be more of an opportunity as an example for us.

Speaker Change: Got it that's helpful.

Speaker Change: I guess, maybe stepping back any thoughts on the T. Six moved to ban non competes and what that might mean for your business.

Mark Hussey: But it's not something that right now is paramount in terms of our concern. Got it. Last one for me, headcount growth came in a lot faster than we expected this quarter, and maybe some of that was GGNA.

Speaker Change: Yeah. This is this is mark.

Mark: At this 0.1st of all we all know what's going to get litigated. So I don't think we really know the outcome for several months, but having said that we are not overly concerned about it in our business, we certainly something we use and manage all the time.

And candidly it might be more of an opportunity as an example for us.

Mark: But it's not something that right now is paramount in terms of our concern list.

Yeah.

Speaker Change: Got it.

Speaker Change: Last one for me like head count growth came a lot faster than we expected in this quarter and maybe some of that was G&A, but.

Jasper Bibbon: But how should we think about the pace of headcount increases and the corresponding impact on utilization over the balance of the year? Yeah, there's a couple things to think about as you think about headcount. As you referenced, you've got the addition of DG&A, which is, think of that as about 100 FTEs.

Speaker Change: How should we think about the pace of head count adds and the corresponding impact on utilization over the balance of the year.

Speaker Change: Yes, there's a couple of things to think of as you think about the head count because you referenced <unk> got the addition of <unk>, a which is think of that as about 100 ftes.

Speaker Change: We've also been building out our managed services capabilities from global deliveries back to global delivery perspective, I'm, using our India team as a base there and so we've had some more.

Speaker Change: More aggressive head count adds there as we continue to win new assignments in that area and build out that part of our business, but that tends to skew too.

Speaker Change: Hi.

Speaker Change: Lower expense item than in some other areas and then the other thing that's prevalent in the numbers as we.

Speaker Change: We haven't really record low attrition during the first quarter. This year and that's on top of what was low attrition in 2023 as well. So I think it's all of those factors that you see generally low attrition environment and that's been focused at some of the areas that we're investing for growth.

John D. Kelly: We've also been building out our managed services capabilities from a global delivery perspective, using our India team as a base there, and so we've had some more aggressive headcount adds there as we continue to win new assignments in that area and build out that part of our business, but that tends to skew to a lower expense item than in some other areas. And then the other thing that's prevalent in the numbers, We had record low attrition during the first quarter this year, and that's on top of what was low attrition in 2023 as well. So I think it's all those factors that you see, a generally low attrition environment, and then some focused ads in some of the areas that we're investing in for growth. It makes sense.

Jasper Bibbon: Thanks for taking the questions. Thank you. All right, next question comes from the line of Bill Sutherland of Benchmark. Your line is open, Bill. Thank you. Thank you all for joining us. Thank you. Mark and John, hey, I just want to make sure I got the speaker on. Can you hear me?

Speaker Change: Makes sense, thanks for taking the questions.

Speaker Change: Thank you.

Speaker Change: Our next question.

Speaker Change: Comes from the line of Bill Sutherland of Benchmark. Your line is open.

William Sutherland: Thank you.

William Sutherland:

William Sutherland: Mark Shawn Hey, I'm, just want make sure I got the speaker off can you hear me.

William Sutherland: Yes, sounds good, Bill. Okay, cool. So, just to follow up, I guess, on that headcount question, it was particularly strong in health care quarter on quarter, and it was like 11%. So, I guess all those factors, John, you just referred to apply to health care. Is there any other color, particularly for the segment?

William Sutherland: Yes.

William Sutherland: Cool.

Mark Shawn: Is there any other color, particularly for the segment and then how do we think about.

John D. Kelly: And then how do we think about, kind of sequentially for the rest of the year, the headcount trend there? Well, to the broader point, so a lot of that talent growth that you see there, Bill, is the additions to our managed services team over the course of the past year. I will say, you know, from the numbers, this is an area where we continue to see excellent growth potential in the business.

Mark Shawn: Kind of sequentially for the rest of the year.

The head count trend there.

Well.

Mark Shawn: To the broader point, so a lot of a lot of the head count growth that you see there.

Mark Shawn: <unk> is the additions to our managed services team.

Mark Shawn: During spring over the course of the past year I will say CEO comes through in the numbers. This is an area, where we continue to see excellent growth potential. This business. So it's definitely still an area of the business, where we're hiring we're adding talent in order to.

John D. Kelly: So it's definitely still an area of the business where we're hiring and adding talent in order to meet the needs of our clients and continue to see growth for the remainder of the year. And so, from a modeling perspective, I think when you look at it longer term over the course of the year, it's still safe to think of an expectation that headcount growth is going to ultimately kind of land in line with revenue growth for the year. I think that's a safe assumption.

Mark Shawn: If you need that our clients continues to grow.

Mark Shawn: Year over year.

Mark Shawn: And so from.

Mark Shawn: A modeling perspective, I think when you look at it longer term over the course of the year I think it still safe to think of an expectation that head count growth is going to ultimately kind of land in line with revenue growth for the year I think that's a safe assumption now there may be areas as the year progresses, where we do some additional investments or there may be areas, where we end up with.

John D. Kelly: Now, there may be areas of the year ahead where we do some additional investments, or there may be areas where we end up with higher utilization and a little bit less headcount. But generally speaking, I think thinking of headcount percentage growth and revenue percentage growth is probably being insane for the remainder of the year. So we can look at it.

Higher.

Mark Shawn: Ovation and a little bit less headcount add but generally speaking I think thinking of head count percentage growth in revenue percentage growth is probably being saying for the remainder of the year. When you look at it.

William Sutherland: Okay. I know utilization can bounce around quarter to quarter, pretty big moves in digital and consulting, digital up. I'll just hold them down.

Mark Shawn: Yes.

Mark Shawn: I know that utilization can bounce around quarter to quarter.

Mark Shawn:

Mark Shawn: Pretty big moves in digital and consulting digital App.

Mark Shawn: Holding down.

William Sutherland: Consulting, I assume, is basically just catching up with the hiring, including the acquisition. I'm not sure what their... utilization levels were, but is that fair to say? And then on digital, is that sustainable?

Mark Shawn:

Mark Shawn: Consulting I assume it's basically just catching up with the hiring including the acquisition I'm not sure what there.

Mark Shawn: Utilization levels were but.

Is that fair to say and then on digital is that sustainable.

John D. Kelly: I'll offer two things, Bill, on the consulting side. There was a little bit of pressure on the utilization metric related to the acquisition just in the first month of onboarding some of those employees. Again, the low attrition environment in general is another factor that when you have a very low attrition environment, that can put a little bit of pressure on the utilization metric from a digital perspective. But I think that we actually have room to improve that metric if the year goes on after we land in the first quarter. So it was up year over year, but it was actually down a little bit sequentially in the fourth quarter compared to the first quarter.

Oh I'll offer two things bill on the consulting side, there was a little bit of pressure on the utilization metric related to the acquisition engine.

First model of Onboarding some of those employees.

Again, the low attrition environment in general there's another factor but.

Mark Shawn: When you have a very low attrition environment that can put a little bit of pressure on the utilization metric.

From a digital perspective.

Mark Shawn: I think that we actually have room to improve that metric as the year goes on from Atlanta in Atlanta in the first quarter. So it was up year over year was actually down a little bit sequentially. If you look at for the fourth quarter versus the first quarter. So we think that theres more room to run on that metric.

William Sutherland: So we think that there's more room to run on that metric. And the final point I made when we were talking about expenses earlier, I referenced the large team meeting that we had that was about 70 basis points of expense during the quarter. That also has a utilization impact, and while we don't have precision around it, I think we can estimate that the impact on the consulting utilization related to that was about a percent and a half.

Mark Shawn: The final point I mean, when we're talking about expenses earlier I referenced the large T meeting that we had that was about 70 basis points of expense during the quarter that also is a utilization impact.

Mark Shawn: And.

Mark Shawn: Well, we don't have precision around it I think.

Mark Shawn: We estimate the impact for the consulting utilization related that was about.

William Sutherland: So I think that that's not a completely insignificant kind of one-time item that you see in the first quarter and get it. The What's, what's, um... Did you guys talk about this in the prepared remarks? I had to step away for a second.

Mark Shawn: For second half, so I think that thats, not really a significant kind of one time item that you've seen in the first quarter.

Speaker Change: Got it.

Speaker Change: The.

Speaker Change: What's what some.

Speaker Change: Could you guys talk about this need.

Speaker Change: In the prepared remarks, I had to step away for a second kind of the.

William Sutherland: Kind of the... Your thoughts on capital allocation now that you've done or a significant share buyback. I know you're gonna moderate, but how are you? Looking at, perhaps, the M&A environment. Do there seem to be good opportunities, or you can... to watch and see at this point? Bill and Mark, we like the M&A pipeline we have, and we've always had a pretty picky set of opportunities that we pursue. Often, we're just getting to know them.

Speaker Change: Your thoughts on capital allocation now that you have.

Speaker Change: Bob.

Done.

Speaker Change: A significant share buyback I know you are going to moderate but.

Speaker Change: How are you.

Speaker Change: Looking at perhaps.

Speaker Change: Perhaps the M&A environment does there seem to be good opportunities or you.

Speaker Change: Okay.

Speaker Change: Kind of watching to see at this point.

Speaker Change: It's.

Speaker Change: We like the M&A pipeline, we have and.

Speaker Change: We've always had.

Speaker Change: Pretty picky.

Speaker Change: Opportunities that we pursue often we're getting to know them, sometimes working in the market together.

Mark Hussey: Sometimes we're working in the market together, but often that's a precursor for us to move to the next step of an acquisition. We've looked at a lot of companies over the last year, and I would just say, you know, we continue to look at really good opportunities that we feel good about. I do think they fit in the tuck-in type category, but, you know, the range of size could be a little bit bigger than in-gene DNA and, you know, a little bit smaller than that.

Speaker Change: But often that's a precursor for us to move to the next step of an acquisition.

Speaker Change: We've looked at a lot of companies over the last year and I would just say we continue to look at is really.

Speaker Change: Really good opportunities that we feel good about I do think there's good tuck in type categories, but you know.

Speaker Change: The range of size can be a little bit bigger than G&A.

William Sutherland: But I think that will continue to be, you know, obviously, you can't time exactly when those things happen, but I would expect us to be more active through the balance. Oh, good. Okay. Thanks for all the color, guys.

Speaker Change: You were a little bit smaller than that is what I think.

Speaker Change: We continue to be obviously, you can't time exactly when those happen, but I wouldn't expect us to be more active through the balance of the year.

Okay.

Speaker Change: Thanks for all the color guys I appreciate it.

Speaker Change: Yeah.

Speaker Change: Thank you thanks Bill.

Kevin Mark Steinke: I appreciate it. Thank you. Our next question comes on the line from Kevin Steinke of Barrington Research & Associates. Your question, please, Kevin. Good afternoon.

Our next question.

Speaker Change: Coming from the lineup Kevin Stankey.

Barrington Research Associates your question please Kevin.

Kevin Mark Steinke: So you talked about continuing caution from clients in the commercial segment about, you know, moving forward with digital and Strategy and Innovation projects. I believe, you know, on your last call, the fourth-quarter call, you talked about some things, some signs that those areas could pick up in 2024. Is that still the case, or do you think clients have, you know, become a little more cautious over the last, you know, three months or so here? Hey Kevin, it's John.

Kevin Mark Steinke: Good afternoon.

Kevin Mark Steinke: So you talked about.

Kevin Mark Steinke: Continuing caution.

Kevin Mark Steinke: From clients in the commercial segment.

About.

I'm moving forward with digital.

Kevin Mark Steinke: Strategy innovation projects.

Kevin Mark Steinke: I believe.

Kevin Mark Steinke: Last call the fourth quarter call you talked about some <unk>.

Kevin Mark Steinke: Some signs that those areas.

Kevin Mark Steinke: Could pick up.

Kevin Mark Steinke: In 2024 is that still the case or do you think.

Kevin Mark Steinke: <unk> become a little more cautious over the last you know.

Kevin Mark Steinke: Three months or so here.

John D. Kelly: We absolutely still see indications that suggest it could pick up as 2024 goes on. When we actually look at the size of the pipeline and some of the opportunities in the pipeline, we're really encouraged by it. There are some great projects in there, and I guess the underlying theme there is that there is a lot of need and demand from our clients for the services that we provide. But I think what has ended up being a little bit of a cautionary factor for the mixed signal is, I think, because of some of the general macroeconomic uncertainty that's in the market right now, you do see clients that are just a little bit more hesitant to get a So that's kind of what we're fighting through.

Kevin Mark Steinke: Hey, Kevin It's Jon Al we absolutely still see indications that suggest it could pick up as 2020, Florida goes on.

John D. Kelly: We actually look at the size of the pipeline and some of the opportunities in the pipeline.

John D. Kelly: Really encouraged by it there's some great projects in there and I guess the underlying theme. There is there's a lot of need and demand for our clients for the services that we provide I think what is ended up being a little bit of a cautionary factor for the mixed signal is I think because of some of the general macro economic uncertainty that's in the market right now you do.

John D. Kelly: Clients are just a little bit more hesitant to get a project started a little bit.

John D. Kelly: More deliberate in how they paced out projects and thinks about that and so that's kind of what we're fighting through but in terms of the needs that are out there in the market, we definitely see that.

John D. Kelly: But in terms of the needs that are out there in the market, we definitely see that, and from our perspective, it's really just kind of a matter of when, not a matter of if, in terms of that coming back. But we're definitely going through a period right now where there's a little bit. I think it's well said.

John D. Kelly: From our perspective, it's really just kind of a matter of when not a matter of if in terms of that coming back, but we're definitely going through a period right now where there's a little bit of uncertainty.

Mark Hussey: I think it's, you know, the inflationary environment, the economy. But, you know, when you look at the election year, obviously, it's on the minds of some of our clients as well. But, you know, I think that John said it right.

Speaker Change: I think that's well said I think it's you know the inflationary environment and the economy.

Speaker Change: But you know when you look at the election year, obviously southern lines instead of our clients as well, but I think John said it right. The pipeline is actually pretty good. It's all a matter of how does the timing played out with respect to specific opportunities, but were definitely getting our share of SaaS and feeling good about our offerings to be competitive.

Speaker Change: Market.

Speaker Change: Okay. Thanks, and then also on commercial.

Kevin Mark Steinke: You mentioned continued growth in financial advisory. Is that area as hot as it has been? You know, I know you're going to be coming up against some more difficult comparisons here, but is that slowing at all or as strong as it's been or strengthening? Just kind of wondering directionally how that's trending. I think the context I give Kevin is last year that business was really light hot in terms of demand and in terms of a record revenue sort of year.

Speaker Change: You mentioned continued growth and financial advisory.

Speaker Change: Is that area as hard as it has been I know youll youre going to be.

Speaker Change: Coming up but you've got some more difficult comparisons here, but.

Speaker Change: Is that.

Speaker Change: Slowing at all or as strong as it's been or strengthening just kind of wondering directionally, how that's trending.

I think it is.

Speaker Change: So the context I'd give Kevin is last year that business was really white hot in terms of demand and in terms of our record revenue sort of year I think the growth rate has moderated or we expect it to moderate from what we saw last year, but it still was a robust demand environment, there's still significant.

Kevin Mark Steinke: I think the growth rate is moderated, or we expected it to moderate from what we saw last year. But it still was a robust demand environment; there's still a significant amount of inquiries for our services in that area. And our team is still having, quite frankly, a significant amount of success on some of those opportunities.

Speaker Change: Amount of inquiries for our services in that area and our team is still having quite.

Quite frankly, a significant amount of success in some of those opportunities. So.

John D. Kelly: And so when that business is performing well, it's a really high-margin part of our portfolio. And we continue to feel very good about prospects for that business as the year goes on, even if it's not growing at the kind of really high rate that it was growing in 2023 and around. Okay, thank you.

Speaker Change: When that business is performing well its really high margin part of our portfolio.

And we continue to feel very good about prospects of that business as the year goes on even if it's not growing at that kind of.

Speaker Change: Really.

Speaker Change: High rate that it was growing in 2023 and a record year.

Kevin Mark Steinke: And then just lastly, Any change at the segment level in terms of the growth outlook in each segment that gets you to that consolidated number? I think it's probably a little too early to adjust the guide for Kevin.

Speaker Change: Okay. Thank you and then just lastly.

Speaker Change: Any.

Speaker Change: I know you reiterated the full year 2020 for revenue guidance, but.

Speaker Change: Any change.

Speaker Change: At the segment level in terms of the growth outlook.

Speaker Change: And each segment that gets you to that.

Speaker Change: Consolidated number.

John D. Kelly: Obviously, the healthcare business is off to a great start. I continue to feel really good about the pipeline there, so I think that might be an area where you could expect to see potentially a little bit of upside. And, you know, the first quarter for the commercial segment was a little bit slower. It was more flat during the quarter, so that might be where you can see a little bit of pressure on the growth rate.

Speaker Change: I think it's probably a little too early to.

Speaker Change: I got the guidance there Kevin obviously, the health care business is off to a great start continue to feel really good about the pipeline. There. So I think that might be an area, where you could expect to see potentially a little bit of upside.

Speaker Change: In the first quarter for the commercial segment.

Speaker Change: The slower that was more flat during the quarter, so that might be where you can see a little bit of pressure on the growth rate, but will.

John D. Kelly: But we'll continue to execute throughout the year, and I would anticipate that by the time we get the next call, we can refine that a little bit. But those would be maybe the broad strokes where we see a little bit of increased demand versus where it's been a little bit soft. Okay, thank you. Lastly, John, I don't know if you called out the... you know, the dollar amount of the legal expenses that you don't expect to recur after the first quarter. So there's always some level of legal expense in our SG&A, but I described to Kevin the amount that was above and beyond what would be the normal run rate would be a couple million dollars. Okay, great.

Continue to execute throughout the year and I would anticipate by the time, we get the next call. We can refine that a little bit but that those would be maybe in.

In broad strokes, where do we see a little bit of increased demand versus where it's been a little bit softer.

Speaker Change: Okay. Thank.

Speaker Change: Thank you lastly.

Speaker Change: Can I don't know if you'd called out the.

Speaker Change: The dollar amount of the legal expenses that you don't expect to recur.

Speaker Change: After the first quarter.

Speaker Change #100: So there's always some level of legal expenses and our SG&A, but I'd describe kind of the amount that was above and beyond will be the normal run rate would be.

Speaker Change #101: A couple of million dollars.

Kevin Mark Steinke: Thanks for taking the questions. I appreciate it. Yeah, thanks, Kevin.

Speaker Change #101: Okay.

Speaker Change #102: Thanks for taking the questions I appreciate it.

Speaker Change #103: Yeah. Thanks, Scott.

Operator: Thank you. Once again, to ask a question, please press star 11 on your telephone. Again, that's star 11 to ask a question. All right, once again, that's star 11 to ask a question. Please stand by. Our next question comes from the line of Moshe Kotri of Wedbush Securities. Please go ahead, Moshe.

Thank you once again to ask a question. Please press star one on your telephone again Thats Star one one to ask a question.

Yeah.

Speaker Change #103: Yeah.

Speaker Change #103: Alright, once again Thats star one one to ask a question. Please standby.

Speaker Change #103: Our next question comes from the line of Moshe Katsav of Wedbush Securities. Please go ahead Moshe.

Moshe Kotri: So thanks. Congratulations on very, very strong results. I believe, I think.

Moshe Katsav: Okay. Thanks.

Moshe Katsav: Congrats on a very very strong results I believe.

Moshe Katsav: I think.

Moshe Kotri: Huron is the only company in the space that's actually recruiting. So what's embedded in terms of organic headcount growth in your calendar 24 guidance? That's my first question.

Moshe Katsav: Hey, Ron is the only company in the space that's actually recruiting.

Moshe Katsav: So what's embedded in terms of organic head count growth in your calendar 'twenty for guidance. That's my first question. Thanks.

John D. Kelly: In terms of guidance, so our revenue growth rate. For the year, from a projection perspective, the midpoint gap was around 10%, and the range around that was 7-13%. So, in terms of us expanding our talent pool during the year, we're expecting that to basically be on a similar trajectory as revenue growth, so around that 10% range. Understandable. And then there were lots of questions about visibility, but then if I had to kind of look at visibility for healthcare, education, and commercial now versus early calendar 24, let's say three months ago, has that changed, improved, or got worse? How would you kind of define it?

Moshe Katsav: In terms of in terms of the guidance so our.

Moshe Katsav: Revenue growth rate.

Moshe Katsav: For the year from protection perspective at the midpoint gas was around 10% and the range around that was 7% to 13%. So in terms of us expanding our talent pool. During the year, we are expecting that to basically be of a similar trajectory of the revenue growth so around that around that 10% range.

Understood and then the.

Lots of questions about visibility, but then if I had to kind of what that visibility for health care education commercial now versus early calendar 'twenty for let's say three months ago has that changed improved Scott.

Moshe Katsav: Worse, how do you how would you kind of.

Moshe Katsav: Find it.

John D. Kelly: I would say within the healthcare segment, things have improved during the quarter in a couple different aspects. We've had some really nice opportunities in the pipeline, and we've had some strong conversion of those opportunities, sales conversion into backlog, and so I think those things have improved visibility. And then we also have projects that have performance-based fee elements to them to the extent that we're able to successfully deliver for our clients, and I think our teams are executing very strongly on some of those projects, which gives us confidence that there's the potential for some revenue upside related to those projects as the year goes on. I think education is very consistent with where we were three months ago, which is a positive story for us.

Speaker Change #105: I would say within the health care. So I mean, it's improved during the quarter.

Speaker Change #105: A couple of different aspects, we've had some really nice opportunities in the pipeline we've had some.

Speaker Change #105: Strong conversion of those opportunities sales conversion into backlog.

Speaker Change #105: Those things have improved visibility and then we also have projects.

Speaker Change #105: Our that have performance based fee elements to that to the extent that were able to successfully deliver for our clients and I think our teams are executing.

Speaker Change #105: Strongly at some of those projects, which gives us confidence that there's the potential for some revenue upside related to those projects as the year goes on so I think health Caribbean area, whereas improved I think education is very consistent with where we were three months ago, and I think that and which is a positive story for us. We continue to see strong demand there really broad based demand across our different offerings, but I think.

John D. Kelly: We continue to see strong demand there, really broad-based demand across our different offerings, but I think that's been fairly consistent. And then commercial, maybe the one where the size of the pipeline continues to be robust, but in terms of visibility in the short term, that's where we've seen a little bit slower conversion, particularly on some of the digital projects, and I described that as maybe an area where there's a little bit more caution than maybe where we were three months ago.

That's been fairly consistent in that commercial might be the one where the size of the pipeline.

Speaker Change #105: Continues to be robust, but in terms of visibility in the short term, that's where we've seen a little bit slower conversion, particularly on some of the digital projects and.

Speaker Change #105: Describe there is maybe area, where theres a little bit more caution than maybe where we were three months ago.

Speaker Change #105: One <unk>.

Speaker Change #105: Additionally on that is when you look at our financial advisory.

Speaker Change #105: Offerings, which we talked a little bit about tend to have a very very short sales cycle literally it could be.

Speaker Change #105: Is it a week two went and engaged quite start so those are the kinds of things in that environment, where it is.

Speaker Change #105: It's kind of a balanced to some of the other areas that we've seen a little bit of delay in decision, making or projects that were just pushed off.

Speaker Change #106: Yep understood and then so basically the the pipeline in digital is strong, but it's just not converting is that the right way of looking at it or not converting on time.

Moshe Kotri: In commercial, yes, I'd say in the other parts of the business, it's either stronger or, pretty, you know, healthcare has been stronger, education has been fairly consistent. I'd say in commercial for digital is the area where it's a good-looking pipeline, but where the conversion has just been slower than maybe historical numbers. And then, final question about your Indy operation. Can we maybe get some transparency in terms of the headcount? Maybe where it was a year ago, and what do you expect it to be during the next year or two?

Speaker Change #106: In commercial yes, I'd say any other parts of the business, it's either stronger or.

Speaker Change #106: Health care, some stronger education, it's been fairly consistent assay in commercial for digital is the area, where it's a good looking pipeline, but where the conversion has been slower than historical norms.

Speaker Change #106: And then final question about your India operation can we get some maybe some.

Unsparingly in terms of their head count.

Speaker Change #106: Maybe where was it a year ago and what do you expect it to be during the next year or two.

Moshe Kotri: So from a total headcount perspective, roughly 28% of our total workforce is in India. And the three areas that are most prominently delivered by our global team in India are our digital business, which has about 1,000 of those employees; our managed services business, which has, call it, 500 or 600 of those employees. And then we do support our corporate enterprise with our team members in that location, which makes up the remainder of that.

Speaker Change #106: So from a total head count perspective, it's roughly 28% of our of our total workforce is in India.

Speaker Change #106: Three areas that are most prominently.

Speaker Change #106: <unk> delivered by our global team, India is our digital business, which has about 1000 of those employees are managed services business, which has.

Speaker Change #106: Call it.

Speaker Change #106: Five or 600 of those employees and then we do support a corporate enterprise with our team members in that location as well, which makes up the remainder of the head count.

Moshe Kotri: And from a growth perspective, that's been an area that's been growing very strongly. If you were to go a little further back than just last year, it's grown significantly. Five years ago, it was probably the low hundreds in terms of employees that we had there, up to the 2,000 rough number that we have now in India. I'd say year over year it was still a strong growth area, but I think it's just matured a little bit on this.

Speaker Change #106: And from a growth perspective, that's been an area. That's been growing very strongly if you were to go a little further back and just last year, it's grown significantly five years ago was probably low.

Speaker Change #106: Hundreds in terms of ways that we have theyre up to.

Speaker Change #106: The.

Speaker Change #106: 2000.

Speaker Change #106: Rough number that we have now in India, I would say year over year. It was still a strong growth area, but I think.

Speaker Change #106: Just matured a little bit, let's say over the course of the past year.

Speaker Change #107: Understood. Thanks.

Speaker Change #108: Thank you.

John D. Kelly: Seeing no more questions in the queue, I'd like to turn the call back to Mr. Husker. Thanks for spending time with us this afternoon. We look forward to speaking with you again in July when we announce our second quarter results. Have a good evening. That concludes today's conference call. Thank you, everyone, for your participation.

Speaker Change #109: Seeing no more questions in the queue I'd like to turn the call back to Mr. F C.

F C: Thanks for spending time with us. This afternoon, we look forward to speaking with you again in July when we announce our second quarter results have a good evening.

Speaker Change #111: That concludes today's conference call. Thank you everyone for your participation.

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