Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you unpack where the growth rates fit across PI, digital, strategy and innovation, financial adviser in the Healthcare segment?
A: (John D. Kelly - Huron Consulting Group Inc. - Executive VP, CFO & Treasurer) In the Healthcare business, we see strong growth, particularly in our consulting and performance improvement areas, with year-over-year growth north of 20%. Digital continues to show high-teen growth, reflecting investments in digital infrastructure by financially stable clients. Strategy and financial advisory, though smaller revenue bases, are growing over 25% year-over-year.
Q: How is the ability to expand margins despite lower utilization?
A: (John D. Kelly - Huron Consulting Group Inc. - Executive VP, CFO & Treasurer) We had some non-recurring expenses in the quarter that impacted margins, such as practice meetings and legal expenses. Despite these, we achieved a 20 basis point margin expansion. We expect to accelerate margin expansion throughout the year as these expenses are not expected to recur.
Q: What's assumed for Healthcare performance improvement growth in your '24 guidance?
A: (John D. Kelly - Huron Consulting Group Inc. - Executive VP, CFO & Treasurer) The guidance initially called for mid- to upper single-digit growth in performance improvement, considering it had a record performance in 2023. The growth in Q1 outpaced this, indicating potential for upside. The Studer Group is planned for modest, low single-digit growth.
Q: Any thoughts on the FTC's move to ban noncompetes and what that might mean for your business?
A: (C. Mark Hussey - Huron Consulting Group Inc. - President, CEO & Director) We are not overly concerned about the FTC's move to ban noncompetes. It's likely to be litigated for several months, and we see it potentially as more of an opportunity for us.
Q: How should we think about the pace of head count adds and the corresponding impact on utilization over the balance of the year?
A: (John D. Kelly - Huron Consulting Group Inc. - Executive VP, CFO & Treasurer) We're building out our managed services capabilities, particularly using our team in India, which skews to a lower expense item. We've also experienced record low attrition, affecting head count numbers. Generally, expect head count growth to align with revenue growth for the year.
Q: What are your thoughts on capital allocation now that you've done a significant share buyback?
A: (C. Mark Hussey - Huron Consulting Group Inc. - President, CEO & Director) We continue to look at good M&A opportunities and expect to be more active throughout the year. The acquisitions are likely to be in the tuck-in category, potentially a bit larger than GG+A or smaller, enhancing our competitive position.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
