Huron Consulting Group (NASDAQ:HURN) reported strong fourth-quarter and full-year 2025 results, pointing to record revenue before reimbursable expenses (RBR), continued adjusted EBITDA margin expansion, and what management described as a strong start to 2026 supported by elevated backlog and a pipeline near record levels.
Fourth-quarter and full-year performance
CEO Mark Hussey said fourth-quarter 2025 RBR rose 11% year-over-year, driven by record RBR in the healthcare and commercial segments. He also highlighted adjusted EBITDA margin of 15.7% for the quarter and record adjusted diluted earnings per share for the full year, which increased 21% versus 2024.
On a GAAP basis, net income in the fourth quarter was $30.7 million, or $1.72 per diluted share, compared with $34.0 million, or $1.84 per diluted share, in the fourth quarter of 2024. Kelly said fourth-quarter 2025 results included $2.2 million of acquisition-related contingent consideration charges (net of tax), while fourth-quarter 2024 results included a $2.4 million gain (net of tax) tied to the Studer Education divestiture.
For the full year, GAAP net income was $105.0 million, or $5.84 per diluted share, compared with $116.6 million, or $6.27 per diluted share, in 2024. Kelly noted 2025 net income included $7.7 million of non-cash impairment charges (net of tax) related to a convertible debt investment in a third party, while 2024 included an $11.1 million litigation settlement gain (net of tax).
Adjusted profitability improved. Adjusted EBITDA was $68.0 million in the fourth quarter, or 15.7% of RBR, compared with $56.8 million, or 14.6% of RBR, a year earlier. Full-year adjusted EBITDA was $237.5 million, or 14.3% of RBR, compared with $201.2 million, or 13.5%, in 2024. Adjusted net income for 2025 was $140.8 million, and adjusted EPS was a record $7.83, up from $6.47 in 2024.
Segment results: Healthcare leads, commercial scales, education steadies
Huron’s healthcare segment generated 51% of total company RBR in the fourth quarter, with RBR of $221.7 million, up 9.6% year-over-year. Kelly said the increase was driven by demand for performance improvement, strategy and innovation, financial advisory, and revenue cycle managed services, plus $7.3 million of incremental RBR from acquisitions including Eclipse Insights, AXIA, and the consulting services division of AXIOM Systems. Organic healthcare growth was 7.8% excluding acquisitions and the Studer Education divestiture.
For the full year, healthcare RBR rose 10.7% to a record $837.5 million. Healthcare operating income margin improved to 32.4% in the fourth quarter (from 30.3%) and to 30.5% for the full year (from 27.6%). Kelly attributed the year-over-year improvement to several factors, including decreases in support personnel costs and other expenses, and revenue growth outpacing increases in compensation for revenue-generating professionals.
The education segment generated 28% of fourth-quarter RBR. Fourth-quarter education RBR was flat year-over-year, while full-year education RBR increased 5.5% to a record $500.2 million. Education operating income margin declined to 20.7% in the fourth quarter from 22.4%, driven by higher professional compensation, third-party fees, restructuring charges, and amortization tied to next-generation research suite software development. Full-year education operating margin was relatively flat at 22.6% versus 22.9% in 2024.
The commercial segment posted the fastest growth, generating 21% of fourth-quarter RBR. Fourth-quarter commercial RBR rose 36.6% to $91.9 million, including $18.5 million of incremental revenue from acquisitions (AXIA, Treliant, and Wilson Perumal) and “strong demand” for financial advisory offerings. Commercial organic growth was 9.1% in the quarter excluding acquisitions. Full-year commercial RBR increased 27.2% to a record $325.1 million, which Kelly said scaled the segment to about 20% of total company RBR.
Commercial operating income margin improved to 20.0% in the fourth quarter from 17.8% a year ago, but full-year commercial margin decreased to 17.2% from 20.0% due to a shift toward digital offerings and integration expenses associated with acquisitions.
Demand drivers and bookings momentum
Management repeatedly pointed to strong bookings and sales conversion momentum in the second half of 2025 and into January 2026 across segments. Hussey said healthcare bookings in the second half of 2025 exceeded the same period in 2024 by more than 20%, and education bookings rose more than 10% over the same timeframe. He also cited a 20%+ increase in second-half bookings in commercial.
On the healthcare end market, Hussey described “uneven” financial performance among health systems due to reimbursement pressure, rising operating costs, and workforce constraints. He said providers are prioritizing initiatives that deliver near-term financial impact while supporting longer-term sustainability, which is driving demand for Huron’s offerings. In Q&A, management characterized customer priorities broadly under “financial health transformation,” spanning performance improvement, balance sheet and financial advisory work, managed services, and growth strategy.
AI focus and technology expansion
Hussey said the company posted supplemental materials detailing a 2026 outlook and AI strategy, emphasizing that AI must be paired with process reengineering and change management to create value. He said Huron has deployed over 100 AI and automation solutions for health systems and has formed strategic collaborations with select healthcare-focused AI companies, including a newly formed collaboration with Hippocratic AI.
In response to an analyst question, management said it is difficult to quantify AI-related revenue across the business because AI is being deployed broadly, adding that a large majority of projects include some AI component. Management also described a shift in the mix of projects: projects with a high or moderate AI component were described as moving from roughly 25% in the earlier part of the prior year to closer to 50% “this year.” Hussey added that within digital, the company’s data management, analytics, and AI business grew RBR by over 40% in 2025 versus 2024.
Capital allocation, balance sheet, and 2026 guidance
Kelly reported 2025 operating cash flow of $193.4 million and free cash flow of $162.3 million after $31.1 million of capital expenditures. Days sales outstanding were 73 days at year-end, down from 76 days in both the third quarter of 2025 and the fourth quarter of 2024. Total debt at December 31, 2025 was $511 million, with cash of $24.5 million for net debt of $486.5 million. The leverage ratio was 1.9x adjusted EBITDA under the company’s senior bank agreement.
Huron repurchased approximately 1.2 million shares for $166 million during 2025 and spent $112 million on tuck-in acquisitions. Kelly also said that on February 20, 2026, the company repurchased about 500,000 shares for $70 million. The board authorized an additional $200 million under the repurchase program, leaving $229 million remaining. In Q&A, management said repurchases can be “dynamic” and suggested buybacks could be more aggressive when the stock price is dislocated from the company’s expectations.
For 2026, management guided to:
- RBR: $1.78 billion to $1.86 billion
- Adjusted EBITDA margin: 14.5% to 15% of RBR
- Adjusted diluted EPS: $8.35 to $9.15
- Operating cash flow: $220 million to $260 million
- Free cash flow: $180 million to $220 million
Kelly said the company is starting 2026 with the “strongest hard backlog coverage” of its initial annual RBR guidance in the past five years, aided by larger projects sold in the back half of 2025 that extend across multiple quarters. Segment expectations include low double-digit healthcare RBR growth, mid-single-digit education growth, and low-teen commercial growth, along with segment operating margin ranges of approximately 29%-33% (healthcare), 22%-26% (education), and 18%-22% (commercial).
Looking longer term, Hussey reiterated the company’s goal of reaching 15%-17% adjusted EBITDA margins by 2029 and said Huron expects AI and automation-driven productivity gains to be among the margin improvement levers over time.
About Huron Consulting Group (NASDAQ:HURN)
Huron Consulting Group (NASDAQ:HURN) is a global professional services firm that advises organizations across a range of industries on strategy, operations and technology. Founded in 2002 and headquartered in Chicago, the company helps clients address complex business challenges such as performance improvement, digital transformation and organizational change. Huron’s consultants work alongside executive leadership teams to develop and implement tailored solutions that drive growth, increase efficiency and manage risk.
Huron’s service offerings encompass business and financial advisory, healthcare performance improvement, life sciences consulting, higher education and research lifecycle support, as well as legal and regulatory consulting.
