Good afternoon, and welcome to Huron Consulting Group's webcast to discuss the financial results for the fourth quarter and full year of 2025. [Operator Instructions] As a reminder, this conference call is being recorded. Before we begin, I'd 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 on Huron's website for all of the disclosures required by the SEC, including reconciliation to the most comparable GAAP numbers. And now I'd like to turn the call over to Mark Hussey, Chief Executive Officer and President of Huron Consulting Group. Mr. Hussey, please go ahead.

Good afternoon, and welcome to Huron Consulting Group's Fourth Quarter and Full Year 2025 Earnings Call. With me today are John Kelly, our Chief Financial Officer; and Ronnie Dail, our Chief Operating Officer. We finished 2025 with strong fourth quarter results. Revenues before reimbursable expenses, or RBR, grew 11% in the fourth quarter of 2025, driven by record RBR in the Healthcare and Commercial segments. We also continued our trajectory of margin expansion, achieving 15.7% adjusted EBITDA margins in the quarter. Full year RBR grew 12% over 2024, resulting in record RBR and a fifth consecutive year of growth. We're also pleased with our progress increasing our margins in 2025, which marked our fifth consecutive year of adjusted EBITDA margin expansion. In addition, we achieved record adjusted diluted earnings per share in 2025, which grew 21% over 2024. Momentum we achieved in 2025 has carried forward into 2026 as we start the year with strong backlog and a pipeline at near record levels, even after strong sales conversions. Our market-tested strategy, balanced portfolio of offerings and strong execution by our highly talented team has delivered strong multiyear financial performance for Huron and its shareholders, consistent with the financial goals outlined at our Investor Day. I'll now share some additional insight into the progress we've made since last year's Investor Day while providing color into our fourth quarter and full year 2025 performance, along with our expectations for 2026. Please note, we placed supplemental materials on the Investor Relations page of our website with additional detail around our 2026 outlook as well as information about our AI strategy and the evolving opportunity that AI presents to drive impact for our clients and grow our business. We demonstrated that our growth strategy continues to deliver financial performance that has met or exceeded…

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-K and Investor Relations page on the Huron website have reconciliations of these non-GAAP measures to the most comparable GAAP measures, along with the 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, I'd like to discuss several housekeeping items. First, our fourth quarter 2025 results in the Healthcare segment exclude the operating results from the Studer Education business, which was divested on December 31, 2024. Second, our Commercial segment results do include a full quarter of operating results from our acquisition of Wilson Perumal, which closed in September of 2025. And finally, our Healthcare segment results do include a partial quarter of operating results from our acquisition of the Consulting Services division of AXIOM Systems, which closed on November 1. Now I'll share some of the key financial results for the fourth quarter and full year 2025. Fourth quarter of 2025 produced RBR of $432.3 million, up 11.3% from $388.4 million in the same quarter of 2024, driven by record RBR in the Healthcare and Commercial segments. For the full year 2025, RBR was $1.66 billion, up 11.9% from $1.49 billion in 2024. Excluding the impact of acquisitions and the Studer Education divestiture, full year 2025 RBR was 7.1% over 2024. Driven by growth across all 3 operating segments, we achieved record RBR in 2025, which also marked our fifth consecutive year of achieving high single-digit percentage or better RBR growth. Net income for the fourth quarter of 2025 was $30.7…

[Operator Instructions] Our first question comes from Andrew Nicholas with William Blair.

First one I wanted to ask was on Commercial. Strong quarter, total revenue growth and organic revenue growth. It looks to me like C&MS revenue was especially strong. So I was hoping you could flesh that out a little bit. Was there anything onetime in the quarter or lumpy? And what at the industry level is particularly strong in that segment?

Yes, Andrew, no, you're right. It was a good quarter for our Commercial team. And as we noted, it was a strong quarter for our distressed financial advisory team, as you suggested. Nothing that I would call out is lumpy there during the quarter. There were some low to mid-single-digit million success fees during the quarter, but that's reflective of the size of such fees that we get in any given quarter. So I wouldn't necessarily call it out. But I think overall, we saw good momentum in that part of the business, a lot of strength from our AXIA business, which really speaks to some of the supply chain challenges that our clients are seeing in the digital area and momentum from a strategy and innovation perspective, too, both in terms of the actual results during the quarter, but then when we look at the sale -- bookings conversions during the quarter and the backlog heading into next year. So it was a strong quarter from a Commercial perspective.

All right. And then on guidance, I guess I want to ask a question about the conservatism of guidance. It sounds like from looking at the slide deck in your prepared remarks here, that's the strongest hard backlog coverage in the last 5 years. So does that mean you just have a little bit more wiggle room to either side? Are you expecting maybe -- or giving yourself some room in the back half of the year? Just help me piece that comment together a little bit more, if you could.

Sure, Andrew. I can start there. I wouldn't say that there's really any change in our guidance approach than we have in any given year. I think when we're at this call in February at the beginning of the year, we're always a little bit cautious because we still have a full year to project out. And so we don't like to get ahead of ourselves. So I think there was kind of the normal amount of caution from us in terms of the range, just reflecting the fact that we have to execute through the rest of the year. But certainly, based on the backlog coverage that you cited, the bookings conversions that we saw during the back half of last year as well as the start that we've had this year, plus just the overall size of the pipeline, those are all things that give us confidence in being able to achieve that guidance. And to the extent that we're able to execute as we expect, it's the type of stuff that could have the potential to push us towards the upper end of the guidance as the year goes on.

Understood. And if I could just squeeze one more in, just on the AI topic. Is there any way to kind of quantify the number of projects or the revenue that is currently tied to or incorporates AI in some fashion? And then relatedly, anything from an economics perspective or a pricing perspective or even like a duration perspective that you've seen AI projects be different from your traditional work to the extent that more work is tied to AI or implementing AI or helping your clients with AI? Just wondering how that evolves the model, if at all?

Sure, Andrew. Yes, happy to provide some color there. It's difficult to quantify across the entire business because we are deploying AI really across the business and in different areas. There's -- at this point, the large majority of our projects have some element of AI embedded in them. And this is not just speaking of digital projects, this is consulting projects as well as digital projects. As we look at sales conversions, thinking about it comparatively this year versus last year, there's been a noticeable shift in terms of projects that do have either how we would characterize a high component or a moderate component of AI-related delivery. And maybe the way to think about that is if you go back towards the first part of last year, maybe that was 25% of projects or something in that neighborhood that was around that size. This year, that's closer to 50%. If you look within our digital business and our data analysis business and our AI offerings specifically, that's up about 40% at this point year-over-year, which is one of the drivers of our confidence in digital growth as we head into 2026.

Our next question comes from Tobey Sommer with Truist.

I was interested by your comment about having the highest backlog coverage of initial RBR guidance in 5 years. Could you frame that? I understand it's a high watermark, but I don't know what would be typical or an average and how this recent snapshot would compare to what those -- what would be typical?

Tobey, yes, I can start there from a quantification perspective. So as you're familiar, typically at the beginning of the year, during the first quarter, you've got really high visibility. By the time you get out of the quarter into the second quarter, you've got significant visibility, but we still have work to do to close out the year. And then when you get to the back half of the year is typically when you're more in that, call it, 40% visibility range of the guidance. I would say this year, it's several percentage points higher than that really across the board. And one characteristic of some of the work that we've sold over the back half of last year are larger sorts of projects that span over multiple quarters. So it's not only giving us better visibility for the immediate quarters, that's kind of the first half of this year, but it also meaningfully improves our visibility as we get towards the back half of the year. So that's how I would quantify it, Tobey.

Yes. The only point I would add to what John said is just the breadth of the businesses and the coverage that it applies to, it's not that we have it equally across the board every single year, but in this particular year, it is actually quite solid across all 3 segments.

What are the areas in your portfolio where you're anticipating adding headcount the fastest here in 2026?

Well, Tobey, I think the first thing I'd comment on is, from a Healthcare perspective, we actually made a lot of that investment in headcount in the back half of last year, and you'll see that come through in the metrics. So I think we really kind of set the stage for growth in Healthcare for next year, the guidance that we talked about with primarily the headcount that we added in the back half of last year, which doesn't mean that we won't have some additional adds, but I think a lot of that was already accomplished by the end of the year. I'd say outside of that area, two areas I'd look at would be our strategy and innovation business. We're both in the Healthcare segment as well as the Commercial segment. Right now, we're seeing a significant amount of pipeline as well as recent bookings in both of those areas where we're actively hiring to bring people in, to help support our growth there as well as within our digital capability. And I think that within digital, probably no surprise to hear, but I think employees with skills in advanced technologies and AI continue to be an area that we're investing in and to help both grow our digital business, but also to support the consulting business. And then another one that you'd see in the metrics is our managed services business, where we've added significant managed services heads towards the back half of last year and where I think you're going to see that trend continue into 2026 based on some of our recent sales in that area.

When you're talking to hospital customers, particularly those maybe in the pipeline for PI projects, what are they most focused on over the next 6, 12, 18 months to -- that influences their decision to go down that path with you or sort of hold off?

Yes. I think probably the best way to summarize it would be the descriptor of financial health transformation, which is a pretty broad encompassing description of a full range of things that we do, and we kind of outlined them in some of the areas of the script, but it ranges from performance improvement across all the various sub elements of performance improvement as well as the balance sheet and financial advisory, bringing better liquidity, visibility to decisions, around those kinds of things. It can lead into managed services as well as the strategy for growth aspects as well. So it's pretty all-encompassing. And I think we made a comment pretty clear that the time of incremental change to solve the bigger challenges they have, we're well past those days. We are now seeing a lot more transformational-type thinking that it spans across the full enterprise or the full institution.

If I could sneak in one housekeeping question. What do you expect performance fees to look like this year compared to last?

I expect a little bit of an uptick there, Tobey. And so by way of providing some historical context, if you look over the past 2 years, 2024, if you look at our Healthcare segment revenues, the component of those revenues that was contingent based, was in the mid-20% range, a little bit north of 25%. This past year, in 2025, it skewed a little bit lower. It was in the low 20% range. I think our expectation at this point, which is still subject to the types of projects that we sell as the year goes on is that, that's going to probably return to more of the levels that we saw in 2024, more in that mid-20% range.

[Operator Instructions] Our next question comes from Kevin Steinke with Barrington Research Associates.

Great. I wanted to follow up about your comment of selling larger projects and ask about specifically within Healthcare. I know you noted greater demand for integrated solutions. So when we're talking about larger projects in Healthcare, is it just that the performance improvement piece is larger upfront? Or are you selling more integrated work upfront? And if it's just performance improvement upfront, is the demand for integrated solutions then creating kind of a longer tail at clients as you maybe do follow-on projects in other areas with them?

It's a good question, Kevin. The typical way we start is we're just presented with a challenge or a business problem that we're looking for our thoughts on how we can solve it. And when we start off, sometimes they start with single areas of solution because that's what the client is bringing into focus and they can lead to other opportunities that are adjacent over time. That's very typical of what we see is that we expand as we gain relationships and understanding of their business and bring our expertise and suggestions to other areas of focus that can be impactful to them. Occasionally started on a more integrated full-scale basis, but it is really, as I said, a combination of full range of things that we do, pretty much we cover every element of their operation today. And so we're -- that I think is one of the things that makes us distinct in the market versus our competitors that we have just so many levers in multiple dimensions that we can help them, which is effective what leads to larger engagement sizes and candidly probably extend a little bit over time for longer stays at those clients.

All right. Great. John, you mentioned just the acquisition contingent consideration adjustment in the quarter. I believe you mentioned due to outperformance of certain acquisitions. Are there any particular that you would highlight there that have been outperforming expectations?

What we've talked about, this isn't -- I probably won't get into specifics, Tobey (sic) [ Kevin ], of the earn-out considerations for those acquisitions. But certainly, we talked a lot about AXIA, which was in the fourth quarter of 2024, which has been one of the business units that -- or one of the areas of the business that's been really hot. Eclipse Insights, which we closed in June of 2025. That's been a really strong performer for us. I think as we talked about at the time, that -- the capabilities of that team in the middle revenue cycle area was just a perfect fit with what we do from a performance improvement consulting perspective. And we worked with them previously, so we knew it would be a good cultural fit. So that one is off to a great start. And then Wilson Perumal would be one more that I would highlight, and that was in September of last year, but they really bring some great strategy and performance improvement capabilities to our commercial team that together with Innosight, their capabilities and IP has really been resonating with clients together along with our digital capabilities that we have in the Commercial segment. So I think that -- if you think about that vertically from strategy to performance improvement to digital, we're seeing a lot of demand for those integrated capabilities right now in the Commercial segment.

Okay. Yes, sounds good. That's helpful. Appreciate that. And just lastly, given the recent dislocation you've seen in your stock price, I know it's your target to return about 50% of annual free cash flow to shareholders that's being accomplished through share repurchases. Is that -- are there any thoughts to maybe even accelerating the pace of repurchase based on recent movements in the stock? Or do you just kind of stick to that formula you've laid out?

Kevin, it is dynamic. And so we do look at valuation considerations, quite frankly, both on the share repurchase and the M&A side. And certainly, when you do see the dislocation in the stock price, from our expectations, that does make it an attractive entry point for us, from our perspective, to buy shares. So I think I would expect to see more aggressive buybacks of shares at this price, and that's consistent with both what we've already done in the first quarter, but then as well as the Board authorization that we discussed in my remarks.

Seeing no further questions in the queue. I'd like to turn the call back over to Mr. Hussey.

Thanks for spending time with us this afternoon, and we look forward to speaking with you again in May when we announce our first quarter results. Good evening.

This concludes today's conference call. Thank you, everyone, for participation. You may now disconnect.