Earnings call transcript: Huron Consulting beats Q1 2025 forecasts, stock rises

Huron Consulting Group Inc. (HURN) reported robust financial results for the first quarter of 2025, surpassing analysts’ expectations. The company, which boasts a "GREAT" financial health score according to InvestingPro, posted an earnings per share (EPS) of $1.68, significantly higher than the forecasted $1.16, and revenue of $395.7 million, exceeding the anticipated $389.27 million. Following the earnings release, Huron’s stock rose by 0.78% in after-hours trading, reaching $137, continuing its impressive 45% gain over the past year.

Key Takeaways

• Huron reported a strong EPS beat, with a 44.8% surprise over forecasts.
• Revenue grew by 11.2% year-over-year, driven by all three operating segments.
• The stock price increased by 0.78% in after-hours trading.
• The company reaffirmed its full-year guidance for 2025.
• Strategic acquisitions and divestitures are shaping Huron’s market position.

Company Performance

Huron demonstrated strong performance in Q1 2025, with revenue before reimbursable expenses rising 11.2% from the same quarter last year. The company’s net income surged 36.3% to $24.5 million, or $1.33 per diluted share, underscoring its effective operational strategies and market positioning. Growth was evident across its Healthcare, Education, and Commercial segments, with digital capabilities in the commercial sector expanding by 12%.

Financial Highlights

• Revenue: $395.7 million, up 11.2% year-over-year
• EPS: $1.68, beating the forecast of $1.16
• Adjusted EBITDA: $41.5 million, representing 10.5% of revenue
• Net income: $24.5 million, up 36.3% from Q1 2024

Earnings vs. Forecast

Huron’s Q1 2025 EPS of $1.68 exceeded the forecasted $1.16 by 44.8%, marking a significant earnings surprise. The revenue of $395.7 million also surpassed expectations, suggesting strong demand and effective cost management. This performance reflects a positive trend compared to previous quarters, where earnings surprises were less pronounced.

Market Reaction

Following the earnings announcement, Huron’s stock rose by 0.78% in after-hours trading to $137. This movement is notable as it comes amid a broader market environment characterized by volatility. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value calculations, with analyst targets suggesting potential upside of 23%. The stock’s increase positions it closer to its 52-week high of $153.85, indicating investor confidence in the company’s growth trajectory. With a PEG ratio of just 0.2, the company trades at an attractive valuation relative to its growth prospects.

Outlook & Guidance

Huron reaffirmed its full-year 2025 guidance, projecting revenue between $1.58 billion and $1.66 billion and an adjusted EBITDA margin of 14-14.5%. The company anticipates an adjusted non-GAAP EPS of $6.80 to $7.60. This outlook builds on the company’s strong track record, with InvestingPro data showing consistent revenue growth at a 5-year CAGR of 11%. InvestingPro subscribers have access to 8 additional key insights about Huron, including management’s recent share buyback activities and detailed financial health metrics. The commercial segment is expected to maintain a full-year operating income margin of 21-23%, with positive free cash flow projected between $160 million and $190 million.

Executive Commentary

CEO Mark Hussey expressed optimism, stating, "We’re encouraged by our performance in the first quarter in the face of a dynamic external environment." CFO John Kelly noted, "We continue to expect full year headcount growth to largely flux with revenue," highlighting the company’s adaptive workforce strategy. Hussey also mentioned, "The nature of the work might shift a little bit. But again, it really has not had to from our perspective, any kind of dramatic effect."

Risks and Challenges

• Healthcare clients face financial pressures from rising operating expenses and potential Medicaid funding changes.
• The education sector is navigating a complex regulatory environment.
• The commercial segment is challenged by tariff uncertainties and volatile macroeconomic conditions.
• Potential changes in the 340B drug pricing program could impact healthcare revenues.

Q&A

During the earnings call, analysts inquired about business trends and project sizes. Executives reported no significant changes in new business or billings in April and noted an increase in project sizes due to client complexity. The healthcare segment continues to show a strong pipeline, with no major project cancellations observed.

This comprehensive performance and positive outlook position Huron Consulting Group as a resilient player in its industry, with strategic initiatives and market adaptability driving its growth.

Full transcript - Huron Consulting Group Inc (HURN) Q1 2025:

Conference Call Operator, Huron Consulting Group: Good afternoon, and welcome to Huron Consulting Group’s webcast to discuss financial results for the first quarter twenty twenty five. At this time, all conference call lines are on a listen only mode. 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. Please review that information along with the filings with the SEC for a disclosure of factors that may impact subjects discussed in this afternoon’s webcast. The company will be discussing one or more non GAAP financial measures. Please look at the earnings release and on Huron’s website for all of the disclosures required by the SEC, including reconciliations to the most comparable GAAP numbers. And now, I would like to turn the call over to Mark Hussey, Chief Executive Officer and President of Huron Consulting Group.

Mr. Hussey, please go ahead.

Mark Hussey, Chief Executive Officer and President, Huron Consulting Group: Good afternoon, and welcome to Huron Consulting Group’s first quarter twenty twenty five earnings call. With me today are John Kelly, our Chief Financial Officer, and Ronnie Dale, our Chief Operating Officer. Driven by strong growth across all three operating segments, revenues before reimbursable expenses, or RBR, grew 11% over the first quarter of twenty twenty four, while we continue to expand our margins. Our first quarter results reflect our continued progress in executing our growth strategy, which we refreshed and shared at our Investor Day in March. We’re encouraged by our performance in the first quarter in the face of a dynamic external environment.

Today, we reaffirm our annual guidance. As we stated on our year end earnings call and reiterated at our Investor Day last month, we believe the challenges and opportunities of the external environment are contemplated within our guidance range. Our strong client relationships, incredibly talented team, industry expertise, and breadth of capabilities, including our performance improvement offerings, collectively position us well to serve our clients as they navigate an evolving and complex regulatory landscape and continued market disruption. I’ll now share some additional insights into our first quarter performance. In the healthcare segment, first quarter RBR grew 10% over the prior year quarter.

The increase in RBR in the first quarter of twenty twenty five was primarily driven by continued strong demand for our performance improvement financial advisory offerings. Our healthcare business continues to perform exceptionally well as our clients respond to increasing financial pressures and potential regulatory changes. Despite increased patient volumes, many of our large health system clients continue to face operating expenses that are outpacing reimbursements. We believe this is a trend that will continue for the foreseeable future. In addition, potential changes to Medicaid funding, reductions in research funding, changes to the 340B drug pricing program, and 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.

Providers are positioning their businesses to stay ahead of the evolving external environment, while operating in an increasingly competitive landscape. 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. To execute these initiatives, providers are turning to Huron as their trusted advisor, given our long track record of delivering significant tangible results. The pipeline continues to grow and demand for our healthcare offerings remains strong, which is a testament to the investments we’ve made to diversify our portfolio. Our offerings today meet the broad needs of the market, focused on both accelerating growth in our clients’ markets and driving efficiency across their administrative and clinical operations.

Across the full range of market conditions, we’re well positioned to address the wide array of opportunities and challenges facing hospital, physician group, and health system clients. Education segment RBR grew 10% in the first quarter of twenty twenty five 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. Let me share some context on our education business. While we have successfully diversified our client base over time, large public and private research universities have been and continue to be at the core of our business. Nearly every day, new headlines hit the press about potential regulatory impacts affecting the higher education industry.

It’s important to note that these recent regulatory initiatives and federal directives do not impact colleges and universities uniformly. While nearly all research universities are experiencing some impact related to the evolving regulatory environment, magnitude, timing, and strategic implications of these impacts vary significantly, depending on the unique attributes of the institution. The most significant and publicized policy changes have largely impacted a relatively small number of private universities. Incidentally, we have and continue to provide services. In the uncertainty that exists today, many of our clients are turning to Huron to understand potential scenarios, evaluate their options, and take preemptive actions to position their organizations for the best possible outcome during this period.

For example, helping clients understand the financial impacts of the federal directives, potential options, and mitigation strategies. More specifically, we’re helping them identify opportunities to improve liquidity, redesign their long range planning and budget models, and accelerate transformation of their operating models. We’re also analyzing clients’ funding mechanisms and expenses to determine how best to close potential operating deficits or future funding gaps. Similar to health care, the needs of our large and small public and private clients are wide ranging. The breadth of our diverse portfolio, deep understanding of the industry, as well as our clients and institutions is unmatched by our competition and positions us well to be their trusted partner as they navigate the current disruption.

Now let me turn to commercial segment. In the first quarter of twenty twenty five, commercial segment RBR grew 17% over the prior year quarter and grew 11% sequentially compared to the fourth quarter of twenty twenty four. The year over year increase in RBR was driven by the incremental RBR from our acquisition of Axia and strong demand for our digital offerings, partially offset by decreases in RBR from our strategy and innovation and financial advisory offerings. Excluding the incremental RBR from our acquisition of Axia, our commercial digital capability grew 12% over the prior year quarter. Our commercial clients are also facing increased pressure from the dynamic external environment, coming from the uncertainty related to tariffs and a more volatile macroeconomic environment.

Similar to healthcare and education, commercial clients are also turning to Huron as their partner of choice to navigate the market disruptions. For example, leveraging our supply chain offerings, we’re building analytic models to simulate the impact of global tariffs on their financial position over time and the ripple effects that may arise. Despite this volatile environment, clients continue to advance their digital transformation imperatives, which in turn advance their competitive positions, drive operational efficiency, and leverage data to make better, faster decisions. 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 in our digital capability, while selectively adding advisory capabilities, both organically and through programmatic M and A. And now let me turn to our outlook for the year.

Today, we reaffirm our guidance for 2025, and that includes our RBR, adjusted EBITDA margin, and adjusted diluted earnings per share. Let me close by saying that we’re confident in our refreshed strategy and in our ability to deliver upon the financial goals outlined at our Investor Day last month. We’re encouraged by our performance in the first quarter in the face a dynamic external environment. For markets that we serve continue to be under increased pressure, and we believe we’re well positioned to help clients navigate through the complex challenges, with industry expertise, with breadth of our portfolio, our strong competitive positions, and our highly talented team. And now let me turn it over to John for a more detailed discussion of our financial results.

John?

John Kelly, Chief Financial Officer, Huron Consulting Group: 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 Adjeron website have reconciliations of these non GAAP measures to 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. Before discussing our financial results for the quarter, I would like to discuss several housekeeping items. First, our first quarter results exclude the operating results from the student education business, which was divested on 12/31/2024.

Second, our first quarter results do reflect a full quarter of operating results from the acquisition of Axia Consulting, primarily in the commercial segment, which closed effective 12/01/2024. And finally, our acquisitions of Advancement Resources and Halpin closed on 03/01/2017 respectively. And as such a partial period of their operating results are included within the education segment. The operating results of advancement resources and Halpin are not material to our first quarter results. Now I will share some of the key financial results for the first quarter.

RBR for the first quarter of twenty twenty five was $395,700,000 up 11.2% from $356,000,000 in the same quarter of 2024. The increase in RVR for the quarter was driven by strong growth across all three operating segments. Net income for the first quarter of twenty twenty five increased 36.3% to $24,500,000 to $1.33 per diluted share compared to net income of $18,000,000 to $0.95 per diluted share in the first quarter of twenty twenty four. As a result, or as a percentage of total revenues, net income increased to 6.1% in the first quarter of twenty twenty five compared to 5% in the first quarter of twenty twenty four. The increase in net income was driven by revenues that outpaced expenses and an increase in the discrete tax benefit for share based compensation awards that vested during the quarter.

As a result of this discrete tax benefit, our effective income tax rate in the first quarter of twenty twenty five was negative 14.4% as we recognized the income tax benefit on our pretax income. Adjusted EBITDA was $41,500,000 in Q1 twenty twenty five for 10.5% of RBR compared to $33,800,000 from 9.5% of RVR in the first quarter of twenty twenty four. The increase in adjusted EBITDA for the quarter was primarily due to increases in segment operating income in our healthcare and education segments, excluding the impact of segment depreciation and amortization and segment restructuring charges, partially offset by a decrease in segment operating income in the commercial segment and increased unallocated corporate expenses to support the growth of our business. Adjusted net income was $31,100,000 or $1.68 per diluted share in Q1, twenty twenty five compared to $23,300,000 or $1.23 per diluted share in the first quarter of twenty twenty four, resulting in a 36.6% increase in adjusted diluted earnings per share over Q1 twenty twenty four. Now I’ll discuss the performance of each of our operating segments.

The healthcare segment generated 50% of total company RBR during the first quarter of twenty twenty five. This segment posted RBR of $198,500,000 up $17,700,000 or 9.8% from the first quarter of twenty twenty four. The first quarter of twenty twenty four included $3,400,000 of RBR from the student education business, which was divested in the fourth quarter of twenty twenty four. Excluding the results for student education, health care segment Q1 revenues grew 12% over the first quarter of twenty twenty four. The increase in the segment’s RBR in the quarter reflects continued strong demand for our performance improvement and financial advisory offerings.

Operating income margin for healthcare was 28.4% in Q1 twenty twenty five, compared to 23.6% in Q1 twenty twenty four. The increase in margin was primarily due to revenue growth that outpaced the increase in salaries and related expenses for our revenue generating professionals and decreases in contractor expenses, practice administration and meeting expenses, salaries and related expenses for our support personnel. The education segment generated 31% total company RBR during the first quarter of twenty twenty five. The education segment posted RVR $122,700,000 up $11,200,000 10 percent from the first quarter of twenty twenty four. The increase in RVR in the quarter was driven by strong demand for our strategy and operations advancement offerings, increased demand for our software product offerings within our digital capabilities.

The inorganic RVR contributions from our acquisitions, including GG and A, which closed on 03/01/2024, as well as Axia, Advancement Resources and Halpin, for $3,900,000 in the first quarter of twenty twenty five. The operating income margin for education was 18.8% for Q1 twenty twenty five compared to 19.7% for the same quarter in 2024. The decrease in operating income margin in the quarter was primarily driven by expenses related to a team wide leadership meeting during the quarter, performance bonus expenses for our revenue generating professionals, salaries and related expenses for our support personnel, and amortization of our internally developed software, all as percentages of RBR, partially offset by revenue growth that outpaced the increase in salaries and related expenses for our revenue generating professionals. Commercial segment generated 19% of total company RBR during the first quarter of twenty twenty five and posted RBR of $74,500,000 up $10,800,000 17 percent from the first quarter of twenty twenty four. The increase in RBR was driven by $11,200,000 of incremental RBR from our acquisition of Axia, which we closed in December of twenty twenty four.

Strong demand for our digital offerings, partially offset by decreases in RBR from our strategy and innovation and financial advisory offerings. Operating income margin for the commercial segment was 15.2% for Q1 twenty twenty five compared to 22.1% for the same quarter in 2024. The decrease in operating income margin reflects the mix of RBR during the quarter, which was driven by increases in compensation costs for our revenue generating professionals and support personnel and contractor expenses as percentages of RBR. We continue to expect full year operating income margin in the range of 21% to 23% for the commercial segment. Corporate expenses not allocated to the segment level, excluding corporate restructuring charges were $52,400,000 in Q1 twenty twenty five, compared to $50,900,000 in Q1 twenty twenty four.

Unallocated corporate expenses in the first quarter of twenty twenty five included $900,000 of income related to the decrease in the liability of our deferred compensation plan compared to expense of $2,400,000 in the first quarter of twenty twenty four. These amounts are offset by the change in market value of the investment assets used to fund the plan reflected in other income. Excluding the impact of the deferred compensation plan in both periods, unallocated corporate expenses increased $4,800,000 in the first quarter of twenty twenty five, primarily driven by increases in compensation costs for support personnel, software and data hosting expenses, partially offset by a decrease in legal expenses. Now turning to the balance sheet and cash flows. Cash flow used in operations in the first quarter of twenty twenty five was $106,800,000 reflecting our annual incentive payments during the quarter.

Cash flow used in operations during the first quarter of twenty twenty four was $130,700,000 During the quarter, we used $8,500,000 to invest in capital expenditures, inclusive of internally developed software costs, resulting in negative free cash flow of $115,400,000 We continue to expect full year free cash flow to be in a range of positive $160,000,000 to $190,000,000 debt of cash taxes and interest and excluding the non cash stock compensation. DSO came in at seventy nine days for the first quarter of twenty twenty five compared to ninety one days for the first quarter of twenty twenty four. The decrease in DSO reflects the impact of collections on certain larger healthcare and education projects in alignment with their contractual payment schedules. Total debt as of 03/31/2025 was $576,300,000 consisting entirely of our senior bank debt. We finished the quarter with cash of $23,400,000 for net debt of $552,900,000 This was a $217,100,000 increase in net debt for Q4 twenty twenty four, primarily due to the payment of our annual cash bonuses and share repurchases during the quarter.

In the quarter, we used $72,900,000 to repurchase approximately 509,000 shares, representing 2.9% of our common stock outstanding as of 12/31/2024. As of 03/31/2025, dollars ’1 hundred and ’90 ’1 point ’7 million remained available for share repurchases under the current share repurchase authorization from our board of directors. Our leverage ratio is defined in our senior bank agreement with 2.2 times adjusted EBITDA as of 03/31/2025 compared to 2.7 times adjusted EBITDA as of 03/31/2024. As a reminder, our first quarter typically represents a seasonal high leverage ratio given the payout of our annual bonuses in March. Finally, me turn to our guidance for full year 2025.

Mark mentioned, today we reaffirm our annual RBR, margin, and adjusted EPS guidance, which includes RBR in a range of 1,580,000,000 to $1,660,000,000 adjusted EBITDA in a range of 14% to 14.5% for RBR, and adjusted non GAAP EPS in a range of $6.8 to $7.6 Thanks, everyone. I’d now like to open the call to questions. Operator?

Conference Call Operator, Huron Consulting Group: Thank One moment for our first question. And our first question comes from the line of Andrew Nicholas of William Blair and Company. Please go ahead, Andrew.

Andrew Nicholas, Analyst, William Blair and Company: Thanks and good afternoon. I wanted to ask first about the commercial segment outlook. Obviously, it feels like 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 you’re seeing any kind of pockets of indecision or pullback on discretionary projects? And maybe relatedly, if you have any kind of changes to the segment up level growth expectations for that business?

John Kelly, Chief Financial Officer, Huron Consulting Group: Andrew, it’s John. I’ll start. No changes to our guidance at the segment level. Actually, if you look at the first quarter, we had record levels of sales conversion during the first quarter in our commercial segment, and that was primarily driven by the digital business. So if you look at the results for the first quarter, you’ve got the inorganic contribution from Axia that we talked about.

Our commercial digital business, as Mark referenced, was up 12% during the quarter, which I think corresponds to that pipeline in backlog strength. On the consulting side, that’s where we did see negative growth during the quarter. I’d probably put that to a couple of buckets. I think on the strategy part, I think that is an area where you do see some impact from the current macro environment. There is just a lot of disruption there.

And I’d say strategy within commercial is an area that we’ve got a little bit of caution on as we continue to look at it as the year goes on. I think in terms of the financial advisory part of the business, it’s really a case of that team was very busy during the quarter, but it happened to be that a lot of the work came in the healthcare segment for some of our clients that were going through distress within healthcare. As we turn the corner into April, a lot of the inquiries that we’re seeing now are more weighted back towards the commercial segment. So I think that we’ll see increased demand there from a financial advisory in the commercial segment during the second quarter. A little bit of a watch item on the strategic part of the business, which even there for that team, I’d note they were also very busy in the healthcare of the business during the quarter.

It was just on the commercial side that was a little bit softer. And then we feel really good about the way things are shaping up from a digital perspective.

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

Andrew Nicholas, Analyst, William Blair and Company: Great, that’s helpful and encouraging. I guess for my follow-up, I just wanted to ask specifically on headcount growth. I think sequentially it was relatively flat, if I take out some of the inorganic ads, and I’m looking just at the revenue generating professionals, not not the managed, the managed services, employees. So could you just maybe speak to that and how you’re thinking about headcount growth in this current market environment? Where are you prioritizing new headcount growth?

And is the expectation for that to resemble headcount or excuse me, revenue growth still? Thank you.

John Kelly, Chief Financial Officer, Huron Consulting Group: Andrew, it’s John, I can start. When we look out at the full year, we still expect headcount growth to largely, again, similar to you, I’m answering excluding managed services headcount. Excluding that population, we expect headcount to largely flux with revenue as the year goes on. I think what you saw there in the first quarter was just some really good execution by our teams in terms of utilization. You probably noticed that utilization for both our consulting capability, as well as our digital capability was up roughly 400 basis points in each of those areas in the first quarter of this year versus last year.

So I think the team did a really good job of using the talent that we have to execute on the revenue that we 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. I’d say in particular within our healthcare business, that’s an area where we just continue to see strong demand from a pipeline perspective, strong sales conversion. And that’s an area where I think you’ll see it continue to add headcount to support the growth we’re expecting as the year goes on.

Andrew Nicholas, Analyst, William Blair and Company: Very helpful. Thanks again.

Conference Call Operator, Huron Consulting Group: Thank you. Our next question comes from the line of Toby Sommer of Truist Securities. Please go ahead, Toby.

Toby Sommer, Analyst, Truist Securities: Thank you. Good afternoon. How would

John Kelly, Chief Financial Officer, Huron Consulting Group: you

Toby Sommer, Analyst, Truist Securities: characterize the new business and billings in education and healthcare broadly during April? Any kind of change versus the first quarter trend?

John Kelly, Chief Financial Officer, Huron Consulting Group: No, nothing notable that I would point to. In fact, if you look at our I know you were asking about even as we progressed into the second quarter here, but if you look at our first quarter sales conversion, it was up meaningfully from where it was a year ago. So that was a good indicator. A lot of that pipeline conversion came through in February and March, there was significant growth in terms of conversions during those couple of months as well. So no change that I’d point to in April.

It’s just, we’re not even all the way through that month yet. Getting there, but not quite there.

Mark Hussey, Chief Executive Officer and President, Huron Consulting Group: Maybe the thing I’d add is I was going to say, and on the flip side, we haven’t seen cancellations either, things that we’ve already sold, so we continue to progress. I think it’s pretty much a fairly normal environment for us from what we would typically see, passing all the disruptions going on.

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

Mark Hussey, Chief Executive Officer and President, Huron Consulting Group: No, really, we continue to work with them. Many of these go back from the founding of the company in terms of just the length of time of the relationships. And so you’ve been a trusted advisor for them in various situations that have come along. The nature of the work might shift a little bit. But again, it really has not had to from our perspective, any kind of dramatic effect as a result of the headlines that have been out there.

Toby Sommer, Analyst, Truist Securities: Thank you. How has assessment activity trended in for performance improvement projects? And is there any shift that you could share with us in terms of customers’ propensity to include performance fees?

John Kelly, Chief Financial Officer, Huron Consulting Group: I would say, Toby, it continues to be a robust environment in terms of assessment activity. I think that’s characterized by some of the trend lines that we saw coming into the year where many of our clients are going through financial strain related to constrained revenue, at the same time the costs have continued to escalate. So I think that’s still been a theme. And then I think some of the recent regulatory changes or the evolving environment there has caused some clients to continue to be concerned about revenue constraints and funding sources, which then is oftentimes something that causes clients to look at performance improvement type projects as a way to address potential budgetary gaps in that sort of environment. So the pipeline and the assessments we see continue to be busy in that area.

In terms of contingent based fees versus normal fees, I would say no. I don’t think we’ve seen any real shift in terms of mix in that regard.

Toby Sommer, Analyst, Truist Securities: Okay. And then I just wanted to ask one more question on project size and duration. If you zoom out here and you think about what you’re seeing in

Mark Hussey, Chief Executive Officer and President, Huron Consulting Group: the business, what you have in your backlog already,

Toby Sommer, Analyst, Truist Securities: Do you think the size and duration of your projects is changing at all? And if so, in which direction?

John Kelly, Chief Financial Officer, Huron Consulting Group: Over time, Toby, and when I say that through last year into the early part of this year, I think we are seeing the average job size increase. I think that’s reflective of some of the challenges that our clients have been facing. And I think that’s really across industries too, terms of just scope and complexity. The other big thing there too is with the change in our operating model, the number of projects where we’re bringing in different capabilities, whether that’s bringing in our digital capability, our strategy capability, our financial advisory capability. I think that adds to project size as well.

So that’s been a trend that’s been increasing for us.

Toby Sommer, Analyst, Truist Securities: Thank you very much. I’ll get back in the queue.

Conference Call Operator, Huron Consulting Group: You. Seeing no more questions in the queue, I’d like to turn the call back to Mr. Hassi. Sir?

Mark Hussey, Chief Executive Officer and President, Huron Consulting Group: 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.

Conference Call Operator, Huron Consulting Group: That concludes today’s conference call. Thank you everyone for your participation.

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