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    HURN
    Earnings call· Jun 2026(Q2 FY26)

    Huron Consulting Group Q2 FY26 earnings call HURN

    Jul 28, 2026 Source

    Executive summary

    Huron Consulting Group Q2 FY26 — Record Revenue and Strong Organic Growth Driven by AI and Managed Services

    Huron Consulting Group delivered record Q2 FY26 revenue and strong organic growth, fueled by robust demand for its digital and managed services, significantly influenced by AI. The company raised its full-year guidance for RBR and EPS, driven by strong bookings and pipeline, while continuing to expand margins and strategically deploy capital, including share repurchases and debt reduction.

    Highlights

    5

    • Achieved record revenues before reimbursable expenses (RBR) of $465.6 million, increasing 15.7% year-over-year.

    • Delivered strong organic RBR growth of 10.8% in Q2 2026.

    • Adjusted EPS grew 30.2% year-over-year to $2.46 per diluted share.

    • Generated robust cash flow from operations of $120.5 million, up from $80.1 million in Q2 2025.

    • Reduced leverage ratio to 2.8x adjusted EBITDA from 3.1x in the prior quarter.

    Concerns

    3

    • Healthcare provider market financial challenges

    • Higher education market pressures

    • Commercial segment growth pressure in H2

    Guidance & targets

    17
    CategoryTargetConfidence
    Full-year RBR
    $1.85B to $1.89B
    high materiality
    High
    Full-year Adjusted EBITDA margin
    14.5% to 15% of RBR
    high materiality
    High
    Full-year Adjusted non-GAAP EPS
    $9 to $9.40
    high materiality
    High
    Full-year effective tax rate
    28% to 30%
    medium materiality
    High
    Full-year free cash flow
    $180M to $220M
    high materiality
    High
    Full-year weighted average diluted share count
    16.6M to 16.8M shares
    medium materiality
    High
    Healthcare segment RBR growth
    mid-teen percentage range
    medium materiality
    High
    Healthcare segment operating income margins
    30% to 32%
    medium materiality
    High
    Education segment RBR growth
    mid- to upper single-digit percentage range
    medium materiality
    High
    Education segment operating income margins
    24% to 26%
    medium materiality
    High
    Commercial segment RBR growth
    low-teen percentage range
    medium materiality
    High
    Commercial segment operating income margins
    19% to 21%
    medium materiality
    High
    Unallocated corporate expenses (excl. restructuring/deferred comp impact)
    low double-digit percentage increase
    low materiality
    High
    Leverage ratio
    2x to 2.5x adjusted EBITDA
    high materiality
    High
    Medium-term annual revenue growth
    double-digit percentage
    high materiality
    High
    Medium-term adjusted EBITDA margins
    15% to 17%
    high materiality
    High
    Medium-term adjusted EPS growth
    doubling
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Healthcare
    Record RBR, driven by strong demand for managed services, performance improvement, strategy, financial advisory, and digital offerings. Includes $10.1M incremental RBR from acquisitions (RelateCare, Eclipse Insights, Axiom). Operating income margin remained relatively flat year-over-year, maintaining strong performance.
    Organic RBR growth: 12%Managed services growth: 64%Organic managed services growth: 43%
    		$232.3M17.4%—30.1%
    Education
    Acceleration of growth rate, driven by strong demand for digital and managed services offerings. Operating income margin increased from 25% in Q2 2025, primarily due to revenue growth outpacing salary increases and decreased project costs.
    		$139.4M7.8%—26.8%
    Commercial
    Driven by $9.2M incremental RBR from acquisitions (Treliant and Wilson Perumal) and strong demand for financial advisory and strategy offerings. Operating income margin grew from 16.6% in Q2 2025, primarily due to decreases in contractor and support personnel expenses, and revenue growth outpacing increases in revenue-generating professional salaries.
    Organic RBR growth: 12.2%
    		$94M24.6%—21%

    Operational metrics

    22
    RBR
    $465.6MUp 15.7% from $402.5M in Q2 2025
    Q2 2026

    Record RBR for the quarter.

    Organic RBR growth
    10.8%YoY
    Q2 2026

    Company-wide organic RBR growth.

    Adjusted EBITDA
    $72.6MUp from $60.6M in Q2 2025
    Q2 2026

    Increase primarily attributable to increased segment operating income, partially offset by unallocated corporate expenses.

    Adjusted Net Income
    $40.2MUp from $33.7M in Q2 2025
    Q2 2026

    Non-GAAP measure.

    Adjusted EPS
    $2.46Up 30.2% YoY from $1.89 in Q2 2025
    Q2 2026

    Non-GAAP measure.

    Capital Expenditures
    $9.1M
    Q2 2026

    Investment in capital expenditures.

    DSO
    79 daysDown from 82 days in Q1 2026
    Q2 2026

    Decrease primarily attributable to collections on certain healthcare and education projects.

    Share Repurchases
    $53.1M
    Q2 2026

    Amount used for share repurchases during the quarter.

    Year-to-date Share Repurchases
    $208.6M
    YTD Q2 2026

    Total year-to-date repurchases, representing 9% of outstanding shares as of the beginning of the year.

    Total Debt
    $834M
    As of June 30, 2026

    Consisting entirely of senior bank debt.

    Cash Balance
    $31.2M
    As of June 30, 2026

    Cash on hand at quarter end.

    Net Debt
    $802.8MDecreased $26.8M compared to Q1 2026
    As of June 30, 2026

    Decrease despite share repurchases and acquisition payments.

    Leverage ratio
    2.8xDown from 3.1x as of March 31, 2026
    As of June 30, 2026

    Improved leverage ratio.

    Unallocated Corporate Expenses
    $65.4MUp from $54.3M in Q2 2025
    Q2 2026

    Increased due to reclassification of certain sales and operations functions and other compensation/technology costs.

    Digital capability bookings with AI scope
    >60%Up from ~35% in H1 2025
    H1 2026

    Percentage of total digital bookings that have either direct AI scope or AI-enabled delivery.

    Healthcare segment RBR contribution
    50%
    Q2 2026

    Contribution to total company RBR.

    Education segment RBR contribution
    30%
    Q2 2026

    Contribution to total company RBR.

    Commercial segment RBR contribution
    20%
    Q2 2026

    Contribution to total company RBR.

    Commercial segment RBR contribution
    21%
    H1 2026

    Contribution to total business RBR.

    Effective tax rate
    27.2%
    Q2 2026

    Effective tax rate for the quarter.

    Consulting headcount growth
    high single-digit percentage
    Full year

    Expected headcount growth for the full year, less than revenue growth.

    Utilization
    over 80%
    Q2 2026

    Current utilization is above the typical target, triggering more hiring.

    Industry KPIs

    3
    MetricValueDetails
    Retention rateoutstandingqualitative
    Revenue model mixoutcome-based modelsqualitative
    New business bookings growth>20%%

    Orderbook & backlog

    2
    Client bookingsup across all 3 segmentsH1 2026

    acceleration during Q2

    Digital capability bookingsincreased by more than 20%H1 2026

    compared to the same period a year ago

    Product announcements

    2
    ProductTypeDetails
    Clinical intelligent automation solutionlaunch
    AI-enabled research administration toolslaunch

    Deals & partnerships

    1
    RelateCareAcquisition of a leading provider of AI-enabled clinical and patient access managed services solutions.

    Acquisition closed on June 3, 2026. Strengthens services around the patient journey by improving access and throughput, elevating patient/clinician experiences, and delivering measurable operational/financial performance.

    Risks & headwinds

    3
    Healthcare provider market financial challengesNext 10 years and beyond

    OBBBA legislation estimated to reduce federal health care spending by over $1 trillion over the next 10 years; rising labor, supplies, and pharmaceutical costs faster than reimbursements.

    Mitigation: Huron's portfolio of offerings (performance improvement, strategy, digital, financial advisory, managed services) provides solutions for organizations assessing financial and operational impacts, creating growth tailwinds for Huron.

    Higher education market pressures

    Declining enrollments, reduced research revenue, pressure on net tuition, increasing operating costs, challenging regulatory environment.

    Mitigation: Huron's comprehensive portfolio of strategy, operations, technology, and research offerings helps institutions navigate challenges and pursue broader enterprise transformation initiatives, creating continued opportunities for Huron's Education segment.

    Commercial segment growth pressure in H2H2 2026

    Impact of annualizing M&A from last year and wind-down of a couple of distressed financial advisory projects.

    Mitigation: Not explicitly stated, but the company maintains its low-teen percentage RBR growth guidance for the full year for the Commercial segment, implying these factors are incorporated into the outlook.

    What to watch in Q3 FY26

    5

    Consulting headcount growth

    Next quarter
    CurrentHigh single-digit percentage expected for FY26
    TargetContinued hiring to ease utilization

    Why it matters

    Indicates capacity to meet demand and manage high utilization, crucial for sustaining organic growth.

    I probably think of the headcount growth for the full year landing somewhere less than that. So think of it as probably high single-digit percentage headcount growth in consulting.

    Q&A highlights

    7

    Given high utilization rates, what are the company's plans for hiring to manage capacity over the next couple of quarters?

    Management confirmed active hiring, especially in high-utilization areas, with the goal of bringing utilization back down to the upper 70% range (77%-79%) from its current level above 80%.

    “Yes, we're definitely still in market hiring right now. You're right, once we get over the 80% threshold, that's typically when we're doing more hiring in order to help ease that a little bit.”

    asked by Andrew Nicholas · answered by John Kelly

    2 min read6 chapters

    Detailed Narrative

    01

    AI as a Growth Driver

    AI is significantly driving demand for Huron's digital services, with over 60% of digital bookings in H1 2026 having direct AI scope or AI-enabled delivery, a substantial increase from approximately 35% in H1 2025. The company is embedding AI into proprietary solutions, such as the clinical intelligent automation tool in healthcare, which compresses the time to deliver insightful recommendations from days/weeks to hours. This creates new and expanded opportunities for implementation services, leading to higher revenue and margin opportunities for Huron.

    02

    Managed Services Momentum

    Huron is experiencing strong growth in its managed services capability, particularly in the Healthcare segment, which grew 64% in Q2 2026, with 43% organic growth. This success is attributed to the company's differentiated expertise, consistent delivery of financial benefits, and investments in AI and automation, all built upon an outcomes-based model. The recent acquisition of RelateCare further enhances these offerings, and similar traction is observed in Education managed services, focused on university research functions.

    03

    Segment Performance & Market Dynamics

    The Healthcare segment's RBR grew 17% (12% organic) in Q2, benefiting from the financially challenged healthcare provider market and new regulations like OBBBA, which create demand for Huron's performance improvement and advisory services. The Education segment's RBR accelerated to 8% growth, driven by digital and managed services as universities pursue enterprise transformation. The Commercial segment's RBR increased 25% (12% organic), supported by strong demand for financial advisory and strategy in a complex operating environment.

    04

    Digital Capability Strength

    Strategic investments in Huron's digital business since 2013 have culminated in record RBR in Q2 2026. The digital business within the Healthcare segment achieved strong double-digit percentage growth, driven by client investments in modernized digital platforms, data foundations, and distinct AI/automation projects. The company anticipates continued double-digit growth in Healthcare digital in the second half of the year, leveraging its operations-led, data, and AI-enabled offerings.

    05

    Capital Allocation & Financial Strength

    Huron generated robust free cash flow of $111.3 million in Q2 2026. This enabled the company to repurchase approximately 438,000 shares for $53.1 million during the quarter, contributing to year-to-date repurchases of $208.6 million (1.6 million shares). Net debt decreased by $26.8 million quarter-over-quarter to $802.8 million, and the leverage ratio improved to 2.8x adjusted EBITDA, with a commitment to reach 2x-2.5x by year-end.

    06

    Programmatic M&A Strategy

    Huron continues to execute a programmatic M&A strategy, targeting 2% to 4% growth over time⏳ through deals that expand capabilities and deepen expertise. These acquisitions, like RelateCare, are typically proprietary, lower risk, accretive to EBITDA multiples, and help retain talent. The company remains active in seeking opportunities that fill gaps and complement its existing offerings, focusing on smaller, strategic deals rather than large transformational ones.

    AI-generated summary of the company’s earnings call. Not investment advice.