Huron Consulting Group Inc. (NASDAQ:HURN) Q2 2023 Earnings Conference Call July 27, 2023 5:00 PM ET

Company Participants

Mark Hussey - Chief Executive Officer and President

John Kelly - Chief Financial Officer and Treasurer

Conference Call Participants

Tobey Sommer - Truist Securities

Andrew Nicholas - William Blair

Bill Sutherland - Benchmark Company

Kevin Steinke - Barrington Research

Operator

Good afternoon. And welcome to Huron Consulting Group's webcast to discuss the financial results for the Second Quarter of 2023. [Operator Instructions] As a reminder, this conference call is being recorded.

Before we begin, I would 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 and on Huron's website for all of the disclosures required by the SEC, including reconciliations to the most comparable GAAP numbers.

And now I would like to turn the call over to Mark Hussey, Chief Executive Officer and President of Huron Consulting Group. Mr. Hussey, please go ahead.

Mark Hussey

Good afternoon, and welcome to Huron Consulting Group's Second Quarter 2023 Earnings Call. With me today are John Kelly, our Chief Financial Officer; and Ronnie Dail, our Chief Operating Officer.

We continue to drive strong organic growth in each of our three operating segments while expanding our company wide operating margin, consistent with our growth strategy. Revenues in the second quarter of 2023 grew 27% over the prior year quarter and for the first half of 2023, revenues grew 25% over the same period last year, reflective of the ongoing strength and demand for both our consulting and managed services and digital capabilities. Adjusted EBITDA margin increased to 130 basis points in the first half of 2023, compared with the same period in ‘22. As we make solid progress toward a goal of expanding companywide profitability. We are pleased that our performances outpaced the financial objectives shared at a 2022 Investor Day. And we remain confident in our ability to deliver at our above these goals in the years ahead.

I'll now share some additional insights into our second quarter performance. In the healthcare segment, second quarter revenues grew 35% over the prior year quarter. The increase in revenues in the quarter was driven by strong demand for our performance improvement, financial advisory and digital offerings. As the federal and state pandemic relief funding has waned, hospitals and health systems face ongoing financial and operational challenges. Many organizations have experienced workforce shortages, increased cost of labor and supplies, and increased competitive pressures in their markets, collectively leading to the margin pressures and in many cases, net operating losses. Healthcare organizations are focused on addressing these challenges and doing so in a matter the best physicians is going to stabilize near term performance and enables them to achieve their broader strategic goals.