0001628280-25-046771
SEC filingRevenue before reimbursable expenses grew 16.8% to $432.4M; adjusted EBITDA margin expanded 80 bps to 15.6%.
In Q3 2025, Huron reported total revenues of $441.3 million, up 16.7% year-over-year, driven by a 16.8% increase in revenues before reimbursable expenses to $432.4 million. Organic growth, excluding acquisitions and divestitures, was 10.2%. Net income rose 12.0% to $30.4 million, while diluted EPS increased 16.3% to $1.71. Adjusted diluted EPS grew 25.0% to $2.10, benefiting from a reduction in share count due to aggressive share repurchases ($152.5 million in first nine months). Operating margin (based on revenues before reimbursable expenses) improved to 11.6% from 11.5%, reflecting operational leverage. Adjusted EBITDA margin expanded 80 basis points to 15.6%, driven by revenue growth outpacing cost increases.
Healthcare led with revenue growth of 19.9% to $219.5 million, driven by strong demand for performance improvement, financial advisory, and digital services. Operating margin expanded significantly to 30.9% from 27.1% as revenue growth outpaced cost increases, including a $6.5 million contribution from acquisitions. Education revenue grew 6.9% to $129.4 million, with operating margin improving slightly to 25.7% from 24.1%, supported by strategy/operations and research solutions. Commercial segment revenue surged 26.6% to $83.4 million, fueled by acquisitions (AXIA, Treliant, WP&C) and continued digital demand. However, operating margin contracted sharply to 16.4% from 24.5% due to higher compensation and contractor costs from acquisitions, partially offset by revenue growth.
Management's strategic focus remains on sustaining growth in Healthcare and Education, expanding Commercial and global digital capabilities, and pursuing margin expansion through operational efficiency and pricing initiatives. The company continues to execute tuck-in acquisitions (six in the past year) and returned $152.5 million to shareholders via buybacks in 2025. Liquidity is strong with $483.6 million undrawn under the revolver, though leverage increased to 2.30x from 1.39x at year-end 2024 due to acquisition debt. No specific forward guidance was provided, but the company's commentary emphasizes organic reinvestment and disciplined capital deployment.
As of September 30, 2025, total assets stood at $1.54 billion, up from $1.34 billion at year-end 2024, largely due to acquisition-related goodwill and intangibles. Cash and cash equivalents were $23.9 million, relatively flat. Total debt increased to $609.6 million (from $356.6 million), reflecting a $216 million revolver draw and a $395 million term loan under the new $1.1 billion credit facility (July 2025). The weighted average interest rate on borrowings was 5.6%. Unused revolver capacity was $483.6 million. The company remained in compliance with its leverage ratio (2.30x) and interest coverage ratio (8.86x).
The Notes disclose $0.4 million in outstanding letters of credit and contingent consideration liabilities of $18.7 million (fair value) related to 2025 acquisitions, with a maximum potential payout of $49.5 million. No material long-term purchase commitments or off-balance-sheet obligations were reported.
Huron repurchased 1.08 million shares for $152.5 million in the first nine months of 2025, exhausting most of the prior authorization. In Q1 2025, the board authorized a new $700 million buyback program through December 31, 2026, leaving $112.6 million remaining as of September 30, 2025. No dividends were paid. Net debt increased by $253 million, primarily to fund $107.2 million in acquisitions (net of cash) and share repurchases. Capital expenditures (not explicitly in Notes) are not detailed here but are disclosed in the cash flow statement.
Three reportable segments: Healthcare (51% of total revenues in Q3 2025), Education (30%), and Commercial (19%). Segment operating margins: Healthcare 30.2%, Education 25.2%, Commercial 16.1%. Healthcare and Commercial saw strong growth (19.5% and 26.7% YoY, respectively) driven by acquisitions. Digital services represent 41% of total revenues (Healthcare 25%, Education 49%, Commercial 70%). International operations are not material.
For the nine months ended September 30, 2025, Huron's operating cash flow (CFO) of $66.99M was 90% of net income ($74.39M), indicating reasonable conversion. However, CFO included $36.3M in non-cash share-based compensation and $23.5M in depreciation/amortization, partially offset by working capital outflows (e.g., increase in unbilled services of $32.1M).
Capital expenditures (PPE and software) totaled $23.27M, representing 35% of CFO. This moderate level suggests disciplined investment in fixed assets and intellectual property.
Share repurchases of $153.1M far exceeded CFO, highlighting reliance on debt financing. Net borrowings of $253.3M (proceeds $1,041.0M less repayments $787.7M) funded both repurchases and business acquisitions ($107.2M).
Significant cash outflows for acquisitions ($107.2M) and investments in life insurance ($2.9M) drove investing cash flow to -$133.2M. A credit-related impairment charge on convertible debt ($11.1M) was added back in operating adjustments. Operating working capital swings were mixed: client receivables improved slightly, but unbilled services and other assets consumed cash.