Q1 2025 Huron Consulting Group Inc Earnings Call
Okay.
Speaker Change: Good afternoon, and welcome to Huron consulting group's webcast to discuss financial results for the first quarter 2025.
Speaker Change: This time all conference call lines are on a listen only mode.
Speaker Change: Later, we will conduct a question and answer session for our conference call participants and instructions will follow at that time.
Speaker Change: As a reminder, this conference call is being recorded.
Speaker Change: Before we begin I would like to point all of you to the disclosure at the end of the Companys news release for information about any forward looking statements that may be made or discussed on this call.
Speaker Change: The news release is posted on <unk> website.
Please review that information along with the filings with the SEC for a disclosure of factors that may impact subjects discussed in this afternoon's webcast.
Speaker Change: The company will be discussing one or more non-GAAP financial measures. Please look at the earnings release and on <unk> website for all of the disclosures required by the SEC, including reconciliations to the most comparable GAAP numbers and now I would like to turn the call over to Mark Hussey.
Speaker Change: Chief Executive Officer, and President of Huron Consulting group Mr. Hussey. Please go ahead.
Speaker Change: Good afternoon, and welcome to Huron consulting group's first quarter 2025 earnings call.
John Kelly: Me today are John Kelly, our Chief Financial Officer, and Ryan <unk>, Our Chief operating officer.
John Kelly: Driven by strong growth across all three operating segments.
John Kelly: Revenues before Reimbursable expenses, our RBR grew 11% over the first quarter of 2024, while we continue to expand our margins are.
John Kelly: Our first quarter results reflect our continued progress in executing our growth strategy, which we refreshed and shared at our Investor day in March.
John Kelly: We're encouraged by our performance in the first quarter in the face of dynamic external environment.
John Kelly: Today, we reaffirmed our annual guidance.
John Kelly: As we stated on our year end earnings call and reiterated at our Investor Day last month.
John Kelly: I'll leave the challenges and opportunities of the external environment are contemplated within our guidance range.
John Kelly: Strong client relationships.
John Kelly: <unk> talented team and industry expertise.
John Kelly: And breadth of capabilities, including our performance improvement operating effectively.
John Kelly: Collectively position us well to serve our clients as they navigate.
John Kelly: Following and complex regulatory landscape and continued market disruption.
John Kelly: I'll now share some additional insights into our first quarter performance.
John Kelly: The healthcare segment first quarter RBR grew 10% over the prior year quarter.
John Kelly: The increase in RBR in the first quarter of 2025 was primarily driven by continued strong demand.
John Kelly: <unk> improvement.
John Kelly: Advisory offerings.
John Kelly: Our health care business continues to perform exceptionally well.
John Kelly: As our clients respond to increasing financial pressures and potential regulatory changes.
John Kelly: Despite increased patient volumes many of our large health system clients continue to face operating expenses that are outpacing reimbursements.
John Kelly: We believe this is a trend that will continue for the foreseeable future.
John Kelly: In addition potential changes to Medicaid funding reductions in research funding changes to the $3 40, being drug pricing program and increases in the cost of imported drugs and medical devices are forcing health systems to evolve their clinical and administrative functions as they manage declining margins.
John Kelly: Providers are positioning their businesses to stay ahead of the evolving external environment.
John Kelly: Operating in an increasingly competitive landscape.
John Kelly: In some cases, our clients are responding to near term financial pressures, while others are executing strategic operational and digital initiatives to sustain or advance their market position, while preparing for a more challenging financial environment in the future.
John Kelly: To execute these initiatives providers are turning to Huron as their trusted adviser.
John Kelly: Long track record of delivering significant tangible results.
John Kelly: The pipeline continues to grow.
John Kelly: And the band for our health care offerings remained strong.
John Kelly: She is a testament to the investments we've made to diversify our portfolio.
John Kelly: Our offerings today meet the broad needs of the market focused on both accelerating growth.
<unk> markets and driving efficiency across their administrative and clinical operations.
John Kelly: Across the full range of market conditions, we are well positioned to address a wide array of opportunities and challenges facing a hospital physician group and health system clients.
John Kelly: Education segment RBR grew 10% in the first quarter of 2025 over the prior year quarter, driven by strong demand for our strategy and operations and advancement offerings and increased demand for our software product offerings.
John Kelly: Let me share some context on our education business.
John Kelly: While we have successfully diversified our client base over time.
John Kelly: <unk> public and private research universities have been and continue to be at the core of our business.
John Kelly: Nearly every day the headlines hit the press about potential regulatory impacts affecting the higher education industry.
John Kelly: It's important to note that these recent regulatory initiatives and federal directors not impact colleges and universities uniformly.
John Kelly: While nearly all research universities are experiencing some impact related to the evolving regulatory environment Agnes two timing and strategic implications of these impacts vary significantly depending on the unique attributes of the institution.
John Kelly: The most significant and publicized policy changes have largely impacted a relatively small number of private universities.
John Kelly: As an entity, we have and continue to provide services.
John Kelly: Given the uncertainty that exists today many of our clients are turning to Huron to understand potential scenarios evaluate their options to take preemptive actions in positioning our organization for the best possible outcome. During this period.
John Kelly: For example.
John Kelly: Clients understand the financial impacts of the federal directives.
John Kelly: Options and mitigation strategies or.
John Kelly: Specifically, we are helping them identify opportunities to improve liquidity redesign their long range planning and budget models and accelerate transformation of their operating models.
John Kelly: We're also analyzing clients' funding mechanisms and expenses to determine how best to close potential operating deficits or future funding gaps.
John Kelly: Similar to healthcare the needs of a large and small public and private clients a wide range.
John Kelly: The breadth of our diverse portfolio, a deep understanding of the industry as well as our clients institutions is unmatched by our competition and positions as well.
To be their trusted partner as they navigate the current disruption.
John Kelly: Yes.
John Kelly: Now, let me turn to the commercial segment.
John Kelly: First quarter of 2025 commercial segment RBR grew 17% over the prior year quarter and grew 11% sequentially compared to the fourth quarter of 2024.
John Kelly: The year over year increase in RBR was driven.
John Kelly: By the incremental RBR from our acquisition of axiom and.
John Kelly: Strong demand for our digital offerings.
John Kelly: Partially offset by decreases in RBR from our strategy and innovation and financial advisory offerings.
John Kelly: Excluding the incremental RBR from our acquisition of <unk>, a commercial digital capability grew 12% over the prior year quarter.
John Kelly: Our commercial clients are also facing increased pressure from the dynamic external environment I mean from the uncertainty related to tariffs and a more volatile macroeconomic environment.
John Kelly: Similar to healthcare and education commercial clients are also turning to Huron as their partner of choice navigate the market disruptions.
John Kelly: For example, leveraging our supply chain offerings, we're building analytic models could stimulate the impact of global service on their financial position overtime and ripple effects that may arise.
John Kelly: Despite this volatile environment clients continue to advance their digital transformation imperatives.
John Kelly: Which in turn advance their competitive positions drive operational efficiency and leverage data to make better faster decisions.
John Kelly: As I mentioned at our Investor Day in March we believe we have a strong foundation to continue to grow this segment building on the scale, we've achieved to date and our digital capability, while selectively adding advisory capabilities capabilities, both organically and through programmatic M&A.
John Kelly: And now let me turn to our outlook for the year.
John Kelly: Today, we reaffirm our guidance for 2025.
John Kelly: And that includes RBR, adjusted EBITDA margin and adjusted diluting diluted earnings per share.
John Kelly: So let me close by saying that we're confident in our refreshed strategy.
John Kelly: <unk> ability to deliver upon the financial goals outlined at our Investor Day last month.
John Kelly: We're encouraged by our performance in the first quarter in the face of dynamic external environment.
John Kelly: The markets that we serve continue to be under increased pressure we.
John Kelly: We believe we are well positioned to help clients navigate the complex challenges.
John Kelly: Industry expertise the breadth of our portfolio, our strong competitive positions and our highly talented team.
John Kelly: And now let me turn it over to John for a more detailed discussion of our financials.
John Kelly: Doug.
Speaker Change: Thank you Mark and good afternoon, everyone.
Speaker Change: 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.
Speaker Change: Our press release, 10-Q, and Investor Relations page on our website reconciliations of these non-GAAP measures. The most comparable GAAP measures along with a discussion of why management uses these non-GAAP measures.
Speaker Change: And why management believes they provide useful information to investors regarding our financial condition operating results.
Speaker Change: Before discussing our financial results for the quarter I would like to discuss several housekeeping items.
Speaker Change: First our first quarter results exclude operating results total student education business, which was divested on December 31 2024.
Second our first quarter results do reflect a full quarter of operating results from the acquisition of axiom consulting primarily in the commercial segment.
Speaker Change: Closed effective December one 2024.
Speaker Change: And finally, our acquisitions of advancement resources, and helping towards the March one and 17th respectively and as such a partial period of their operating results are included within the education segment.
Speaker Change: The operating result of advancement resources, helping or not material to our first quarter results.
Speaker Change: Now I will share some of the key financial results for the first quarter.
Speaker Change: RBR for the first quarter of 2025 with $395 7 million up.
Speaker Change: Up 11, 2% from $356 million in the same quarter of 2024.
Speaker Change: The increase in RBR for the quarter was driven by strong growth across all three operating segments.
Speaker Change: Net income for the first quarter of 2025 increased 36, 3% $24 5 million.
Speaker Change: The $1 33 per diluted share compared to net income of $18 million.
Speaker Change: 95 per diluted share in the first quarter of 2024.
Speaker Change: As a result.
Speaker Change: As a percentage of total revenues net income increased to six 1% in the first quarter of 2025 compared to 5% in the first quarter of 2024.
Speaker Change: The increase in net income was driven by revenues that outpaced expenses.
Speaker Change: And an increase in the discrete tax benefit for share based compensation awards that vested during the quarter.
Speaker Change: As a result of this discrete tax benefit our effective income tax rate in the first quarter of 2025 was negative 14, 4%.
Speaker Change: We recognized income tax benefit on our pretax income.
Speaker Change: Adjusted EBITDA was $41 $5 million in Q1, 2025, or 10, 5% of RBR compared to $33 8 million.
Speaker Change: The nine 5% of RBR in the first quarter of 2024.
Speaker Change: The increase in adjusted EBITDA for the quarter, primarily due to increases in segment operating income in our healthcare and education segments.
Speaker Change: Excluding the impact of segment, depreciation and amortization and segment restructuring charges.
Speaker Change: Partially offset by a decrease in segment operating income and commercial segment.
Speaker Change: Increased unallocated corporate expenses to support the growth of our business.
Speaker Change: Adjusted net income was $31 1 million from $1 68 per diluted share in Q1 2025.
Speaker Change: Third to $23 3 million or $1 23 per diluted share in the first quarter of 2024.
Resulting in a 36, 6% increase in adjusted diluted earnings per share over Q1 2024.
Speaker Change: Now I'll discuss the performance of each of our operating segments.
Speaker Change: Healthcare segment generated 50% of total company RBR during first quarter of 2025.
Speaker Change: The segment posted RBR of $198 5 million up $17 $7 million or nine 8% from the first quarter of 2024.
Speaker Change: The first quarter of 2024 included $3 $4 million of RBR from the student education business, which was divested in the fourth quarter of 2024.
Speaker Change: Excluding the results for student Education Healthcare segment Q1 revenues grew 12% over the first quarter of 2024.
Speaker Change: The increase in the segment's RBR in the quarter reflects continued strong demand for our performance improvement and financial advisory offerings.
Speaker Change: Operating income margin for healthcare was 28, 4% for Q1 2025 compared to 23, 6% of Q1 2024.
Speaker Change: The increase in margin was primarily due to revenue growth that outpaced the increase in salary and related expenses for our revenue generating professionals.
The decreases in contractor expenses practices.
Speaker Change: Practice administration of meeting expenses salaries and related expenses for our support personnel.
Speaker Change: The education segment generated 31% total company RBR during the first quarter of 2025.
Speaker Change: The education segment posted <unk> $122 7 million up $11 2 million, 10% from the first quarter of 2024.
Speaker Change: The increase in RBR in the quarter was driven by strong demand for our strategy and operations advancement offerings.
Speaker Change: Increased demand for our software product offerings within our digital capability.
Speaker Change: The inorganic RBR contribution from our acquisitions, including G&A, which closed on March one 2024 as.
Speaker Change: As well as axiom advancement resources, helping the $3 9 million in the first quarter of 2025.
Speaker Change: The operating income margin for education was 18, 8% for Q1 2025.
Speaker Change: Year to 19, 7% for the same quarter in 2024.
Speaker Change: The decrease in operating income margin in the quarter was primarily driven by expenses related to a team wide leadership meeting during the quarter.
Speaker Change: <unk> bonus expenses for our revenue generating professionals.
Speaker Change: Salaries and related expenses for our support personnel.
Speaker Change: Amortization of our internally developed software.
Speaker Change: As percentages of RBR harsher.
Speaker Change: Partially offset by revenue growth that outpaced the increase in salaries and related expenses for our revenue generating professionals.
Speaker Change: The commercial segment generated 19% of total company RBR during the first quarter of 2025 and posted RBR of $74 $5 million up $10 million.
Speaker Change: 17% from the first quarter of 2024.
Speaker Change: The increase in RBR was driven by $11 2 million of incremental RBR from our acquisition of <unk>, which we closed.
Speaker Change: In December 2024.
Speaker Change: The strong demand for our digital offerings, partially offset by decreases in RBR from our strategy and innovation financial advisory offerings.
Speaker Change: Operating income margin for the commercial segment was 15, 2% for Q1 2025 compared to 22, 1% for the same quarter in 2024.
Speaker Change: The decrease in operating income margin reflects the mix of RBR during the quarter was driven by increases in compensation costs for our revenue generating professionals and support personnel and contractor expenses as percentages of RBR.
Speaker Change: We continue to expect full year operating income margin.
Speaker Change: A 21% to 23% for the commercial segment.
Speaker Change: Corporate expenses not allocated at the segment level.
Speaker Change: Excluding corporate restructuring charges were $52 4 million in Q1 2025.
Speaker Change: Turning to $50 9 million in Q1 2024.
Speaker Change: Unallocated corporate expenses in the first quarter of 2025 included $900000 of income.
Speaker Change: Due to the decrease in the liability or deferred compensation plan.
Speaker Change: <unk> expense of $2 $4 million in the first quarter of 2024.
Speaker Change: These amounts are offset by the change in market value of the investment assets used to fund the plan reflected in other income.
Speaker Change: Excluding the impact of the deferred compensation plan in both periods unallocated corporate expenses increased $4 $8 million in the first quarter of 2025.
Speaker Change: Clearly driven by increases in compensation costs for our support personnel.
Speaker Change: Topline data hosting expenses.
Speaker Change: We offset by a decrease in legal expenses.
Speaker Change: Now turning to the balance sheet and cash flows.
Speaker Change: Cash flow used in operations in the first quarter of 2025 was $106 $8 million, reflecting our annual incentive payments during the quarter.
Speaker Change: Cash flow used in operations during the first quarter of 2024, it was $137 million.
Speaker Change: During the quarter, we used $8 $5 million to invest in capital expenditures inclusive of internally developed software costs.
Speaker Change: Resulting in negative free cash flow of $115 4 million.
Speaker Change: Continue to expect full year free cash flow to be in a range of positive $106 million to $190 million.
Speaker Change: Cash taxes, and interest and excluding noncash stock compensation.
Speaker Change: DSO came in at 79 days for the first quarter of 2025.
Speaker Change: Third to 91 days for the first quarter of 2024 <unk>.
Speaker Change: A decrease in DSO reflects the impact of collection on certain larger health care and education projects the alignment with the contractual payment schedules.
Speaker Change: Total debt at March 31, 2025 was $576 $3 million.
Speaker Change: Entirely of our senior bank debt.
Speaker Change: We finished the quarter with cash of $23 $4 million for net debt of $552 $9 million.
Speaker Change: This was a $217 $1 million increase in net debt compared to Q4 2024, primarily due to the payment of our annual cash bonuses and share repurchases during the quarter.
Speaker Change: In the quarter, we used $72 9 million.
Speaker Change: We repurchased approximately 509000 shares representing two 9% of our common stock outstanding as of December 31, 2024.
Speaker Change: As of March 31, 2025, $191 $7 million remained available for share repurchases under the current share repurchase authorization from our board of directors.
Speaker Change: Our leverage ratio as defined in our senior Bank agreement was two two times adjusted EBITDA as of March 31, 2025, compared to two seven times adjusted EBITDA as of March 31 2024.
Speaker Change: As a reminder, our first quarter typically represents a seasonal high leverage ratio given the payout of our annual bonuses in March.
Speaker Change: Finally, let me turn to our guidance for full year of 2025.
Speaker Change: Mark mentioned today, we reaffirm our annual RBR.
Speaker Change: And adjusted EPS guidance, which includes.
Speaker Change: We are in a range of one $5 $8 billion to $1 $66 billion.
Speaker Change: Adjusted EBITDA in a range of 14.
Speaker Change: 14% to 14, 5% of RBR.
Speaker Change: And adjusted non-GAAP EPS in a range of $6 87.
Speaker Change: $7 60.
Speaker Change: Thanks, everyone I would now like to open the call to questions.
Speaker Change: <unk>.
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 one again, one moment for our first question.
Speaker Change: And our first question comes from the line of Andrew Nicholas of William Blair <unk> Company. Please go ahead Andrew.
Andrew Nicholas: Thanks, and good afternoon.
Andrew Nicholas: Wanted to ask first about the commercial segment outlook.
Andrew Nicholas: Obviously, it gives us quite a bit happened since the March Investor day could you speak a little bit more specifically to the pipeline for that business, whether or not youre seeing any kind of pockets of indecision or pullback on discretionary projects and maybe relatedly. If you have any.
Andrew Nicholas: And changes to the segment level growth expectations for that business.
John Kelly: Hey, Andrew it's John.
John I'll start no no changes to our guidance at the segment level.
Speaker Change: Actually if you look at the first quarter.
Speaker Change: We had record levels of sales conversion during the first quarter in our commercial segment and that was primarily driven by the digital business.
Speaker Change: So if you look at the results for the first quarter, you've got the <unk>.
Speaker Change: Inorganic contribution from axiom that we talked about our commercial digital business as Mark referenced.
Speaker Change: Was up 12% during the quarter, which I think correspond to that pipeline and backlog strength.
Speaker Change: On the consulting side, Thats, where we did see.
Speaker Change: Negative growth during the quarter.
Speaker Change: With that to a couple of buckets I think on the.
Speaker Change: Strategy part.
Speaker Change: I think that is an area, where you do see some impact from the current macro environment and there is just a lot of disruption there and I'd say strategy within commercial is an area that we've got a little bit of caution on is we will continue to look at it year goes on.
Speaker Change: In terms of the financial advisory part of the business. It's really a case of that team was very busy during the quarter, but it happened to be that a lot of our work came in healthcare segment for some of our clients are going through distress within health care.
Speaker Change: As we turn the corner into.
Speaker Change: April.
Speaker Change: Lot of these inquiries that we're seeing now are more weighted back towards the commercial segments. So I think that we'll see increased demand there from a financial advisory in the commercial segment during the second quarter, a little bit of a watch item on that strategic part of the business, which even there for that team I'd note. They will also very busy in the health care part of the business.
Speaker Change: During the quarter. It was just on the commercial side that was a little bit.
Speaker Change: And then we feel really good about the way things are shaping up from a digital perspective.
Speaker Change: Yes, Andrew the only additional comment I'll make is just that I think would be balanced between pro and counter cyclical offerings in that segment. It gives us.
Speaker Change: Higher degree of confidence that the outlook for the year is intact and will be we'll be in fine shape. We certainly have a lot of <unk>.
Speaker Change: Orders ahead of us to get through but we feel good about the year.
Speaker Change: Great that's helpful and encouraging I guess for my follow up I, just wanted to ask specifically on head count growth.
Speaker Change: I think sequentially it was relatively flat.
Speaker Change: Take out some of the inorganic adds.
Speaker Change: And I'm looking just at the revenue generating professionals not not diminished.
Speaker Change: The managed services employees. So could you just maybe speak to that and how you're thinking about head count growth in this current <unk>.
Speaker Change: Market environment, where are you prioritizing new head count growth.
Speaker Change: If your expectation for that too.
Speaker Change: Great example, head count or excuse me revenue growth still thank you.
Speaker Change: Yes, Andrew it's John I can start.
Speaker Change: When we look out at the full year, we still expect headcount growth to largely and again similar to you I'm answering excluding managed services head count.
Speaker Change: But excluding that population, we expect head count to largely flux with revenue as the year goes on.
Speaker Change: What you saw here in the first quarter was there some really good execution by our teams in terms of utilization and you probably noticed that utilization for both our consulting capability as well as our digital capability was up roughly 400 basis points in each of those areas in the first quarter of this year versus last year. So I think the team did a really good job.
Speaker Change: <unk>.
Speaker Change: Using the talent that we have to execute on the revenue that we had during the first quarter, but as we continue to grow throughout the year, we're certainly going to need to be hiring and adding more talent.
Speaker Change: Say.
Speaker Change: In particular within our health care business, that's an area, where we just continue to see strong demand from a pipeline perspective strong sales conversion and Thats, an area, where I think youll see us continue to add head count to support the growth we're expecting as the year goes on.
Speaker Change: Very helpful. Thanks again.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Tobey Sommer of <unk> Securities. Please go ahead Tobey.
Tobey Sommer: Thank you good afternoon.
Tobey Sommer: How would you characterize the new business and billings in education and health care broadly during April any any kind of change versus.
Tobey Sommer: The first quarter trend.
Tobey Sommer: No nothing nothing notable.
Tobey Sommer: That Atwood <unk>.
Tobey Sommer: Pointing everybody in fact, if you look at our.
Tobey Sommer: I know you were asking about EBIT as we progressed into the second quarter here, but if you look at our first quarter sales conversion. It was up meaningfully from where it was a year ago. So that was a good indicator of a lot of that pipeline conversion came through in February and March.
Tobey Sommer: But there was significant growth in terms of conversions during those couple of months as well so no change that I would point to in April.
Speaker Change: We're not even in Ottawa.
Tobey Sommer: All the way through that month yet.
Tobey Sommer: Getting there we're not quite there.
Speaker Change: Right.
Speaker Change: One thing I'd add.
Speaker Change: I was going to say on the flip side, we haven't seen cancellations either things that we've already sold so we continue to progress so it's.
Speaker Change: So I think it's pretty much a fairly normal environment for us from what we would typically see.
Speaker Change: Absolutely.
Speaker Change: Disruptions going on.
Speaker Change: Great.
Speaker Change: Kind of goes to my follow up was going to be interim resuming in a bit so in that select group of private universities.
Speaker Change: That are most impacted by policy changes.
Speaker Change: <unk>.
Speaker Change: You've seen in your.
Speaker Change: In your business there with them in projects and I understand you made of.
Speaker Change: Preemptively answered part of that already.
No really we continue to work with them.
Speaker Change: Many of these go back for from the founding of the company in terms of just the length of time with the relationships and so we've been a trusted advisor for them in various situations that have come along the nature of the work might shift a little bit but again it really is.
Speaker Change: Add to that from our perspective.
Speaker Change: <unk> got a dramatic effect as a result of.
Speaker Change: The headlines open out there.
Speaker Change: Thank you.
Speaker Change: Our assessment activity trended in for performance improvement.
Speaker Change: Projects.
Speaker Change: Is there any shift that you can share with us in terms of.
Speaker Change: Customers' propensity to.
Speaker Change: Include performance fees.
Tobey Sommer: I would I would say Tobey it continues to be a robust environment in terms of assessment activity.
Speaker Change: Think that's characterized by.
Speaker Change: Some of the trend lines that we saw coming into the year for many of our clients are going through financial strain related to new.
Speaker Change: Constrained revenue was at the same time that cost continuing to escalate. So I think that's still been a theme.
Speaker Change: And then I think some of the recent regulatory.
Speaker Change: Changes are the evolving environment there has caused some clients.
Speaker Change: To continue to be concerned about on revenue constraints.
Speaker Change: Funding sources, which then is a oftentimes something that causes clients to look at performance improvement type projects is way too.
Speaker Change: Address potential budgetary gaps in that sort of environment. So the pipeline and the assessments, we see a continued to be busy in that area in terms of contingent based fees versus royalties I would say no I don't think we've seen any real shift in terms of mix in that regard.
Speaker Change: Okay and then.
Speaker Change: Just wanted to ask one more question on.
Speaker Change: Project size in duration.
Speaker Change: If you zoom out here and you think about what youre seeing in the business. What you have in your backlog already.
Speaker Change: Do you think the size and duration of your projects is changing at all.
Speaker Change: So in which direction.
Tobey Sommer: Overtime Tobey.
Tobey Sommer: When I say that through last year and the early part of this year I think we are.
Tobey Sommer: Being.
Tobey Sommer: The average shop site increase.
Tobey Sommer: I think that's reflective of some of the challenges that our clients have been facing in.
Tobey Sommer: That's really across the industry too in terms of just scope and complexity. The other big thing there too is with the change in our operating model.
Tobey Sommer: Number of projects, where we're bringing in different capabilities, whether that's bringing in our digital capability our strategy capability, our financial advisory capability.
Tobey Sommer: <unk> project size as well so that's been a trend that's been.
Tobey Sommer: Increasing for us.
Tobey Sommer: Thank you very much I'll get back in the queue.
Tobey Sommer: Thank you.
Tobey Sommer: Once again to ask a question. Please press star one wanting your telephone Thats star one wanting a telephone to ask a question.
Tobey Sommer: Okay.
Speaker Change: Seeing no more questions in the queue I'd like to turn the call back to Mr. IFC Sir.
Tobey Sommer: Okay.
Speaker Change: Thank you very much for spending time with us. This afternoon, we look forward to speaking with you again in July when we announce our second quarter results have a good evening.
Speaker Change: That concludes today's conference call. Thank you everyone for your participation.
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