What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-25 · 172 added, 200 removed, 478 unchanged (44% of the section changed)

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We generate our revenues before reimbursable expenses from providing professional services and software products under the following four types of billing arrangements:

fixed-fee (including software license revenue);

time-and-expense;

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and software support, maintenance and subscriptions.

• Fixed-fee (including software license revenue):

In fixed-fee billing arrangements, we agree to a pre-established fee in exchange for a predetermined set of professional services.

We set the fees based on our estimates of the costs and timing for completing the engagements.

Fixed-fee arrangements also include software licenses for our research administration and compliance software.

• Time-and-expense:

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• Software support, maintenance and subscriptions:

Clients that have purchased one of our software licenses can pay an annual fee for software support and maintenance.

We also generate subscription revenue from our cloud-based analytic tools and solutions including our cloud-based revenue cycle management software and research administration and compliance software.

We generate subscription revenue from our cloud-based analytic tools and solutions including our cloud-based revenue cycle management software and research administration and compliance software.

Additionally, clients that have purchased one of our software licenses can pay an annual fee for software support and maintenance.

Software support, maintenance and subscription revenues are recognized ratably over the support or subscription period.

These fees are generally billed in advance and included in deferred revenues until recognized.

These fees are generally billed in advance and included in deferred revenues until recognized as revenue.

Time-and-expense engagements do not provide us with a high degree of predictability as to performance in future periods.

Unexpected changes in the demand for our services can result in significant variations in utilization and revenues and present a challenge to optimal hiring and staffing.

Unexpected changes in the demand for our services can result in significant variations in utilization and revenues and present a challenge to optimal

hiring and staffing.

Moreover, our clients typically retain us on an engagement-by-engagement basis, rather than under long-term recurring contracts.

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Direct costs exclude amortization of intangible assets and software development costs and reimbursable expenses, both of which are separately presented in our consolidated statements of operations.

Selling, general and administrative expenses consist primarily of compensation costs for our support personnel, which includes salaries, performance bonuses, share-based compensation, signing and retention bonuses, payroll taxes, benefits and deferred compensation expense attributable to the change in market value of our deferred compensation liability.

Changes in the market value of our deferred compensation liability are offset with the changes in market value of investments that are used to fund our deferred compensation liability, which are recorded within other income (expense), net.

Also included in selling, general and administrative expenses are third-party professional fees, software licenses and data hosting expenses, rent and other office related expenses, sales and marketing related expenses, recruiting and training expenses, and practice administration and meetings expenses.

Selling, general and administrative expenses primarily consists of compensation costs for our support personnel, which includes salaries, performance bonuses, share-based compensation, signing and retention bonuses, payroll taxes, benefits and deferred compensation expense attributable to the change in market value of our deferred compensation liability.

Changes in the market value of our deferred compensation liability are offset with the changes in market value of the investments that are used to fund our deferred compensation liability, which are recorded within other income (expense), net.

Also included in selling, general and administrative expenses are third-party professional fees, software licenses and data hosting expenses, rent and other office-related expenses, sales and marketing-related expenses, recruiting and training expenses, and practice administration and meeting expenses.

Other operating expenses include restructuring charges, other gains and losses, depreciation expense, and amortization expense related to internally developed software costs and intangible assets acquired in business combinations.

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Our management uses the non-GAAP financial measures to gain an understanding of our comparative operating performance, for example when comparing such results with previous periods or forecasts.

These non-GAAP financial measures are used by management in their

financial and operating decision making because management believes they reflect our ongoing business in a manner that allows for meaningful period-to-period comparisons.

Management also uses these non-GAAP financial measures when publicly providing our business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions.

These non-GAAP financial measures are used by management in their financial and operating decision making because management believes they reflect our ongoing business in a manner that allows for meaningful period-to-period comparisons.

Management also uses these non-GAAP financial measures when publicly providing our business

outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and dispositions.

We believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Huron’s current operating performance and future prospects in the same manner as management does and in comparing in a consistent manner Huron’s current financial results with Huron’s past financial results.

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We have excluded from our non-GAAP measures $11.7 million, which is the value of the settlement gain that exceeds the third-party legal costs of $3.3 million incurred during 2024 specific to this litigation matter, as this net gain is not indicative of the ongoing performance of our business.

Third-party legal costs incurred for this litigation matter in 2023 and 2022 were $4.0 million and $2.0 million, respectively.

Third-party legal costs incurred for this litigation matter in 2023 were $4.0 million.

Our third-party legal expenses are recorded as a component of selling, general and administrative expenses on our statement of operations.

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We exclude the effects of other losses and gains, which primarily relate to changes in the estimated fair value of our liabilities for contingent consideration related to business acquisitions and litigation settlement losses and gains, excluding the 2024 litigation settlement gain presented separately, to permit comparability with periods that are not impacted by these items.

These items are recorded as a component of other gains, net on our consolidated statement of operations.

These items are recorded as a component of other losses (gains), net on our consolidated statement of operations.

Transaction-related expenses :

To permit comparability with prior periods, we exclude the impact of third-party advisory, legal, and accounting fees and other corporate costs incurred directly related to the evaluation and/or consummation of business acquisitions.

Unrealized losses (gains) on preferred stock investment:

We exclude the effect of unrealized losses and gains related to changes in the fair value of our preferred stock investment in a hospital-at-home company arising from observable price changes or impairment losses.

These unrealized losses and gains are included as a component of other income (expense), net.

We believe that these unrealized losses and gains are not indicative of the ongoing performance of our business and their exclusion permits comparability with prior periods.

Losses (gains) on sale of business:

We exclude the impact of third-party advisory, legal, and accounting fees and other corporate costs incurred directly related to the evaluation and/or consummation of business acquisitions to permit comparability with prior periods as these costs are inconsistent in their amount and frequency and are significantly affected by the timing and size of our acquisitions.

Unrealized losses (gains) on long-term investments, net:

We exclude the effect of unrealized losses and gains related to our long-term investments, which include non-cash credit related impairment charges on our convertible debt investment in Shorelight Holdings, LLC and changes in the fair value of our equity investment in a hospital-at-home company arising from observable price changes or impairment charges.

These unrealized losses and gains are included as a component of other income (expense), net on our consolidated statement of operations.

We believe these unrealized losses and gains are not indicative of the ongoing performance of our business and their exclusion permits comparability with prior periods.

Losses (gains) on sales of businesses:

We exclude the effect of non-operating losses and gains recognized as a result of sales of businesses as they are infrequent, management believes that these items are not indicative of the ongoing performance of our business, and their exclusion permits comparability with periods that were not impacted by such items.

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We exclude the effects of income tax expense, interest expense, net of interest income, and depreciation and amortization in the calculation of EBITDA, as these are customary exclusions as defined by the calculation of EBITDA to arrive at meaningful earnings from core operations excluding the effect of such items.

We include, within the depreciation and amortization adjustment, the amortization of capitalized implementation costs of our ERP and other related software, which is included within selling, general and administrative expenses in our consolidated statements of operations.

We include, within the depreciation and amortization adjustment, the amortization of capitalized implementation costs of our enterprise resource planning (ERP) system and other related software, which is included within selling, general and administrative expenses in our consolidated statements of operations.

Revenue-Generating Professionals

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• Revenues before reimbursable expenses increased 11.9% to $1.66 billion in 2025 from $1.49 billion in 2024.

• Net income as a percentage of total revenues increased to 7.7% in 2024, compared to 4.5% in 2023.

• Net income as a percentage of total revenues was 6.2% in 2025, compared to 7.7% in 2024.

Results for 2025 include $7.7 million of non-cash impairment charges, net of tax, related to our convertible debt investment in a third-party.

Results for 2024 include an $11.1 million litigation settlement gain, net of tax, related to a completed legal matter in which Huron was the plaintiff.

• Adjusted EBITDA as a percentage of revenues before reimbursable expenses increased to 14.3% in 2025 from 13.5% in 2024.

• Diluted EPS increased 96.6% to $6.27 for 2024, compared to $3.19 for 2023.

Results for 2024 include a litigation settlement gain related to a completed legal matter in which Huron was the plaintiff, which had a favorable impact of $0.60 on diluted earnings per share in 2024;

and results for 2023 include a non-cash unrealized loss related to our investment in a hospital-at-home company, which had an unfavorable impact of $0.99 on diluted earnings per share in 2023.

• Diluted EPS was $5.84 for 2025, compared to $6.27 for 2024.

Results for 2025 include the non-cash impairment charge related to our convertible debt investment in a third-party, which had an unfavorable $0.43 impact on diluted earnings per share for the year.

Results for 2024 include the litigation settlement gain related to a completed legal matter in which Huron was the plaintiff, which had a favorable impact of $0.60 on diluted earnings per share in 2024.

• Adjusted diluted EPS increased 21.0% to $7.83 for 2025, compared to $6.47 for 2024.

• Net cash provided by operating activities increased 48.8% to $201.3 million for 2024, compared to $135.3 million for 2023.

• Returned $122.2 million shareholders by repurchasing 1,218,434 shares of our common stock in 2024.

• Returned $166.2 million to shareholders by repurchasing 1,166,077 shares of our common stock in 2025.

Revenues before reimbursable expenses increased $176.8 million, or 11.9%, to $1.66 billion for the year ended December 31, 2025 from $1.49 billion for the year ended December 31, 2024.

The overall increase in revenues before reimbursable expenses reflects continued strength in demand for both our Consulting and Managed Services capability and Digital capability within our Healthcare and Education segments, and reflects our focus on accelerating growth in our healthcare and education industries.

These increases in demand were partially offset by a decrease in demand for Commercial's Digital and Consulting and Managed Services capabilities.

The overall increase in revenues before reimbursable expenses reflects strength in demand for our Consulting and Managed Services capabilities within all three of our segments, as well as continued strength in demand for our Digital capabilities within our Commercial and Education segments.

The increase includes $86.0 million of incremental revenues before reimbursable expenses from our acquisitions completed since December 31, 2023.

These increases were partially offset by a decrease in demand for our Digital capability within our Healthcare segment.

Excluding the $86.0 million of incremental revenues before reimbursable expenses from our acquisitions and $13.7 million of revenues before reimbursable expenses in 2024 generated by the Studer Education business, which we divested at the end of 2024, revenues before reimbursable expenses grew 7.1% organically.

Revenues before reimbursable expenses within our Consulting and Managed Services capability increased 13.1% to $976.9 million in 2025, compared to $863.9 million in 2024;

and reflected strengthened demand in our Healthcare and Education segments, partially offset by a decrease in demand in our Commercial segment.

The utilization rate within our Consulting capability decreased to 73.6% in 2024, compared to 76.6% in 2023.

and reflected strengthened demand in all three of our segments.

The increase includes $38.2 million of incremental revenues before reimbursable expenses from our acquisitions of Eclipse Insights, Treliant, Advancement Resources, WP&C, GG+A and Halpin.

The utilization rate within our Consulting capability increased to 75.7% in 2025, compared to 73.6% in 2024.

Revenues before reimbursable expenses within our Digital capability increased 10.2% to $686.0 million in 2025, compared to $622.2 million in 2024;

and reflected strengthened demand in our Healthcare and Education segments, partially offset by a decrease in demand in our Commercial segment.

and reflected strengthened demand in our Commercial and Education segments, partially offset by a decrease in demand in our Healthcare segment.

The increase includes $47.8 million of incremental revenues before reimbursable expenses from our acquisitions of AXIA Consulting, Inc (“AXIA Consulting”) and AXIOM.

The utilization rate within our Digital capability increased to 78.2% in 2025, compared to 76.0% in 2024.

Our total number of revenue-generating professionals, excluding Managed Services professionals, increased 5.0% to 4,694 as of December 31, 2024, compared to 4,469 as of December 31, 2023, as a result of hiring to support the overall increase in demand for our services.

Our total number of revenue-generating professionals, excluding Managed Services professionals, increased 13.1% to 5,307 as of December 31, 2025, compared to 4,694 as of December 31, 2024, as a result of the acquisitions completed since December 31, 2024 and hiring to support the overall increase in demand for our services.

The number of Managed Services professionals increased 46.3% to 2,239 as of December 31, 2025 from 1,530 as of December 31, 2024.

We proactively plan and manage the size and composition of our workforce and take actions as needed to address changes in the anticipated demand for our services as employee compensation costs are the most significant portion of our operating expenses.

Net income increased $54.1 million, or 86.7%, to $116.6 million, or 7.7% of total revenues, for the year ended December 31, 2024 from $62.5 million, or 4.5% of total revenues, for the same period last year.

Results for 2024 include an $11.1 million litigation settlement gain, net of tax, recognized in the second quarter of 2024 related to a completed legal matter in which Huron was the plaintiff.

Results for 2023 include a non-cash impairment loss of $19.4 million, net of tax, related to our investment in a hospital-at-home company.

As a result of the increase in net income and a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan, diluted earnings per share increased 96.6% to $6.27 for 2024, compared to $3.19 for 2023.

Adjusted diluted earnings per share, which excludes the impact of the litigation settlement gain in 2024 and the non-cash impairment loss on our investment in 2023, increased 31.8% to $6.47 for 2024 from $4.91 for 2023.

Net income decreased $11.6 million, or 9.9%, to $105.0 million, or 6.2% of total revenues, for the year ended December 31, 2025 from $116.6 million, or 7.7% of total revenues, for the same period last year.

Results for 2025 include $7.7 million of non-cash impairment charges, net of tax, related to our convertible debt investment in a third-party.

Results for 2024 include an $11.1 million litigation settlement gain, net of tax, related to a completed legal matter in which Huron was the plaintiff.

As a result of the decrease in net income, and partially offset by a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan, diluted earnings per share decreased 6.9% to $5.84 for 2025, compared to $6.27 for 2024.

Adjusted diluted earnings per share, which excludes the impact of the non-cash impairment charges in 2025 and the litigation settlement gain in 2024, increased 21.0% to $7.83 for 2025 from $6.47 for 2024.

Adjusted EBITDA increased $36.3 million, or 18.1%, to $237.5 million, or 14.3% of revenues before reimbursable expenses, in 2025, compared to $201.2 million, or 13.5% of revenues before reimbursable expenses, in 2024.

Net cash provided by operating activities increased 48.8% to $201.3 million in 2024, compared to $135.3 million in 2023.

The increase in net cash provided by operating activities primarily related to an increase in cash collections in 2024, a $15 million litigation settlement received in 2024, and a decrease in payments for contractor expenses in 2024 compared to 2023;

partially offset by an increase in payments for salaries and related expenses for our revenue-generating professionals, an increase in the amount paid for annual performance bonuses in the first quarter of 2024 compared to the first quarter of 2023, and an increase in payments for selling, general and administrative expenses in 2024 compared to the prior year.

During 2025, we deployed $166.2 million of capital to repurchase 1,166,077 shares of our common stock, representing 6.6% of our common stock outstanding as of December 31, 2024.

Summary of Results

The following table sets forth, for the periods indicated, selected segment and consolidated operating results and other operating data, including non-GAAP measures.

The following tables set forth, for the periods indicated, selected segment and consolidated operating results and other operating data, including non-GAAP measures.

Segment and Consolidated Operating Results

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217,564 191,180 175,206

Other gains, net

(14,466) (444) (218)

Other losses (gains), net 2,968 (14,466) (444)

Restructuring charges 6,035 7,590 8,204

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Consulting 2,215 1,729 1,598

1,729 1,598 1,419

Managed Services (3)

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Digital 78.2% 76.0% 75.3%

(1) During the first quarter of 2024, we reclassified certain revenue-generating professionals within our Digital capability from our Healthcare and Education segments to our Commercial segment as these professionals are able to provide services across all of our industries.

This reclassification did not impact the total Digital capability headcount for any period.

The prior period headcount has been revised for consistent presentation.

(1) The majority of our revenue-generating professionals within our Commercial segment can provide services across all of our industries, including healthcare and education.

(2) The increase in the number of revenue-generating professionals within our Commercial segment includes our acquisition of Treliant in 2025.

This acquisition added approximately 180 revenue-generating professionals, of which approximately 65 are consultants who work variable schedules as needed by clients.

(3) We have separately presented the total number of revenue-generating professionals within our Managed Services capabilities of our Healthcare and Education segments.

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Our Education Managed Services professionals provide research administration managed services and outsourcing at our education and research-focused clients.

See footnote 7 below for additional information on the number of Managed Services professionals within our Healthcare and Education segments.

(4) During the first quarter of 2024, we reclassified one of the offerings within Education's Consulting capability to Education's Managed Services capability.

This reclassification did not impact the aggregate revenues before reimbursable expenses for any period, and the prior period Education Managed Services capability revenues before reimbursable expenses and headcount in the following footnotes have been revised for consistent presentation.

(5) Managed Services capability revenues before reimbursable expenses within our Healthcare segment was $77.5 million, $70.1 million and $67.6 million for the years ended 2024, 2023 and 2022, respectively.

Managed Services capability revenues before reimbursable expenses within our Education segment was $28.2 million, $29.6 million and $30.6 million for the years ended 2024, 2023 and 2022, respectively.

(6) During the fourth quarter of 2024, we revised the presentation of our revenue-generating professionals by capability to separately present our revenue-generating professionals in our Consulting capability from our revenue-generating professionals in our Managed Services capability.

This change in presentation did not impact the headcount by capability for any period, and the prior period headcount has been revised for consistent presentation.

The number of Managed Services professionals within our Healthcare segment was 2,117, 1,420 and 924 as of December 31, 2025, 2024 and 2023, respectively.

The number of Managed Services professionals within our Education segment was 122, 110 and 126 as of December 31, 2025, 2024 and 2023, respectively.

(4) Managed Services capability revenues before reimbursable expenses within our Healthcare segment was $90.1 million, $77.5 million and $70.1 million for the years ended 2025, 2024 and 2023, respectively.

Managed Services capability revenues before reimbursable expenses within our Education segment was $29.3 million, $28.2 million and $29.6 million for the years ended 2025, 2024 and 2023, respectively.

(5) Utilization rates are presented for our revenue-generating professionals who primarily bill on an hourly basis.

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Transaction-related expenses 8,521 2,861 357

Unrealized loss (gain) on preferred stock investment — 26,262 (26,964)

Unrealized losses on long-term investments, net

15,396 — 26,262

Gain on sale of business — (3,597) —

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Transaction-related expenses 8,521 2,861 357

Unrealized loss (gain) on preferred stock investment — 26,262 (26,964)

Unrealized losses on long-term investments, net

15,396 — 26,262

Gain on sale of business — (3,597) —

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Revenues before reimbursable expenses increased $176.8 million, or 11.9%, to $1.66 billion for the year ended December 31, 2025 from $1.49 billion for the year ended December 31, 2024.

These increases in demand were partially offset by a decrease in demand for our Digital and Consulting and Managed Services capabilities within our Commercial segment.

The increase includes $86.0 million of incremental revenues before reimbursable expenses from our acquisitions completed since December 31, 2023.

These increases were partially offset by a decrease in demand for our Digital capability within our Healthcare segment.

Additional information on our revenues before reimbursable expense by segment follows.

• Healthcare revenues before reimbursable expenses increased $82.3 million, or 12.2%, driven by continued strength in demand for our performance improvement, revenue cycle managed services, culture and organizational excellence and strategy and innovation solutions within our Consulting and Managed Services capability and our technology and analytics services within our Digital capability.

These increases in demand were partially offset by a decrease in demand for our financial and capital advisory solution within our Consulting and Managed Services capability.

Revenues before reimbursable expenses for the year ended December 31, 2024 included $0.6 million of incremental revenues before reimbursable expenses from our acquisition of Roundtable Analytics completed in September 2023.

On December 31, 2024, we completed the divestiture of our Studer Education practice within our Healthcare segment.

This business generated revenues before reimbursable expenses of $13.7 million and $12.3 million in 2024 and 2023, respectively.

The Studer Education practice was not significant to our consolidated financial statements and did not qualify as a discontinued operation for reporting under GAAP.

The number of revenue-generating professionals within our Healthcare segment, excluding Managed Services professionals, grew 8.2% to 1,218 as of December 31, 2024, compared to 1,126 as of December 31, 2023.

• Education revenues before reimbursable expenses increased $44.6 million, or 10.4%, and includes $18.6 million of incremental revenues from our acquisition of Grenzebach Glier and Associates, Inc.

(“GG+A”) completed in March 2024.

The increase in Education revenues before reimbursable expenses was also driven by continued strength in demand for our technology and analytics services and software products within our Digital capability and our strategy and operations solution within our Consulting and Managed Services capability.

The number of revenue-generating professionals within our Education segment, excluding Managed Services professionals, grew 5.6% to 1,141 as of December 31, 2024, compared to 1,080 as of December 31, 2023.

Our acquisition of GG+A in March 2024 added approximately 70 revenue-generating professionals.

• Commercial revenues before reimbursable expenses decreased $2.8 million, or 1.1%.

Revenues before reimbursable expenses for the year ended December 31, 2024 included $3.1 million of incremental revenues before reimbursable expenses from our acquisition of AXIA Consulting, Inc.

(“AXIA Consulting”), which was completed in December 2024.

The decrease in revenues before reimbursable expenses was primarily due to the decreases in demand for our strategy and innovation solution within our Consulting and Managed Services capability and our technology and analytics services within our Digital capability, partially offset by an increase in demand for our financial advisory solutions within our Consulting and Managed Services capability.

The number of revenue-generating professionals within our Commercial segment, the majority of which provide services across all of our industries, grew 3.2% to 2,335 as of December 31, 2024, compared to 2,263 as of December 31, 2023, including our acquisition of AXIA Consulting in December 2024 which added approximately 130 revenue-generating professionals.

• Healthcare revenues before reimbursable expenses increased $81.3 million, or 10.7%, driven by continued strength in demand for our performance improvement, financial advisory, revenue cycle managed services and strategy and innovation solutions within our Consulting and Managed Services capability.

These increases were partially offset by a decrease in revenues before reimbursable expenses due to the divestiture of our Studer Education practice in the fourth quarter of 2024 and a decrease in revenues before reimbursable expenses for our technology and analytics services within our Digital capability.

The Studer Education business generated $13.7 million of revenues before reimbursable expenses in 2024.

Revenues before reimbursable expenses for the year ended December 31, 2025 included $14.5 million of incremental revenues before reimbursable expenses from our recent acquisitions of Eclipse Insights, AXIA Consulting and AXIOM.

The number of revenue-generating professionals, excluding Managed Services professionals, within our Healthcare segment grew 22.6% to 1,493 as of December 31, 2025, compared to 1,218 as of December 31, 2024.

Our acquisitions of Eclipse Insights and AXIOM in 2025 added approximately 75 revenue-generating professionals.

• Education revenues before reimbursable expenses increased $26.0 million, or 5.5%, driven by strengthened demand for our strategy and operations and research solutions within our Consulting and Managed Services capability and software products within our Digital capability, as well as $9.9 million of incremental revenues from our recent acquisitions of Advancement Resources, GG+A, AXIA Consulting and Halpin.

The number of revenue-generating professionals, excluding Managed Services professionals, within our Education segment grew 0.4% to 1,145 as of December 31, 2025, compared to 1,141 as of December 31, 2024.

• Commercial revenues before reimbursable expenses increased $69.5 million, or 27.2%, which reflects $61.6 million of incremental revenues before reimbursable expenses from our recent acquisitions of AXIA Consulting, Treliant and WP&C and continued strength in demand for our technology and analytics services within our Digital capability.

These increases were partially offset by decreases in demand for our strategy and innovation and financial advisory solutions within our Consulting and Managed Services capability.

The number of revenue-generating professionals within our Commercial segment, the majority of which provide services across all of our industries, grew 14.3% to 2,669 as of December 31, 2025, compared to 2,335 as of December 31, 2024.

Our acquisitions of Treliant and WP&C in 2025 added approximately 210 revenue-generating professionals.

Operating Expenses

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Selling, general and administrative expenses 318,015 19.1% 286,655 19.3% 31,360

Other gains, net

Other losses (gains), net

3,072 0.2% (14,196) (1.0)% 17,268

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Total operating expenses $ 1,520,573 91.4% $ 1,352,986 91.0% $ 167,587

Direct costs increased $67.4 million, or 7.1%, to $1.01 billion for the year ended December 31, 2024 from $942.7 million for the year ended December 31, 2023.

The $67.4 million increase primarily related to a $79.1 million increase in compensation costs for our revenue-generating professionals and a $4.0 million increase in technology costs, partially offset by a $14.4 million decrease in contractor expenses.

The $79.1 million increase in compensation costs reflects our investment to grow our talented team to meet increased market demand and is primarily attributable to a $76.7 million increase in salaries and related expenses driven by increased headcount and annual salary increases that went into effect in the first quarter of 2024 and a $5.5 million increase in performance bonus expense;

partially offset by a $2.8 million decrease in signing, retention and other bonus expense.

As a percentage of revenues before reimbursable expenses, direct costs decreased to 68.0% during 2024, compared to 69.2% during 2023, primarily attributable to the decrease in contractor expenses and revenue growth that outpaced the increase in performance bonus expense for our revenue-generating professionals;

partially offset by an increase in salaries and related expenses for our revenue-generating professionals, as a percentage of revenues before reimbursable expenses.

Direct costs increased $112.4 million, or 11.1%, to $1.12 billion for the year ended December 31, 2025 from $1.01 billion for the year ended December 31, 2024.

The $112.4 million increase primarily related to a $99.0 million increase in compensation costs for our revenue-generating professionals, an $8.7 million increase in contractor expenses, and a $3.0 million increase in technology costs.

The $99.0 million increase in compensation costs reflects our investment to grow our talented team to meet increased market demand and is primarily attributable to an $87.2 million increase in salaries and related expenses driven by the recent acquisitions, hiring to support the overall increase in demand for our services, and annual salary increases that went into effect in the first quarter of 2025, as well as a $6.3 million increase in performance bonus expense, a $4.4 million increase in signing, retention and other bonus expense, and a $1.0 million increase in share-based compensation expense.

As a percentage of revenues before reimbursable expenses, direct costs decreased to 67.5% during 2025, compared to 68.0% during 2024, primarily attributable to revenue growth that outpaced the increase in performance bonus expense for our revenue-generating professionals.

Reimbursable Expenses

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Selling, general and administrative expenses increased by $31.4 million, or 10.9%, to $318.0 million for the year ended December 31, 2025 from $286.7 million for the year ended December 31, 2024.

The $28.7 million increase primarily related to a $16.1 million increase in non-payroll costs, driven by a $5.9 million increase in software and data hosting expenses, a $3.3 million increase in practice administration and meetings expenses, a $2.7 million increase in bad debt expense, and a $1.3 million increase in promotion and marketing expenses, partially offset by a $1.3 million decrease in training expenses.

Additionally, selling, general and administrative expenses increased $12.7 million due to an increase in compensation costs for our support personnel driven by a $14.5 million increase in salaries and related expenses and a $1.2 million increase in performance bonus expense;

partially offset by a $1.6 million decrease in share-based compensation expense and a $1.2 million decrease in signing, retention and other bonus expense.

As a percentage of revenues before reimbursable expenses, selling, general and administrative expenses increased to 19.3% during 2024, compared to 18.9% during 2023.

This increase was primarily attributable to increases in salaries and related expenses for our support personnel and software and data hosting expenses, as percentages of revenues before reimbursable expenses;

partially offset by a decrease in share-based compensation expense for our support personnel.

Other Gains, Net

Other gains, net totaled $14.2 million for the year ended December 31, 2024 and $0.4 million for the year ended December 31, 2023.

The $31.4 million increase primarily related to an $18.5 million increase in non-payroll costs and a $12.5 million increase in salaries and related expenses for our support personnel.

The $18.5 million increase in non-payroll costs was primarily driven by a $7.3 million increase in software and data hosting expenses, a $4.3 million increase in third-party professional fees, a $2.6 million increase in promotion and marketing expenses, a $1.5 million increase in recruiting costs, a $1.4 million increase in business insurance costs, and a $1.2 million increase in severance expenses.

These increases to non-payroll costs were partially offset by a $2.1 million decrease in bad debt expense and a $1.5 million decrease in legal expenses.

The increase in third-party professional fees and business insurance costs were primarily driven by our programmatic acquisition activity.

As a percentage of revenues before reimbursable expenses, selling, general and administrative expenses decreased to 19.1% during 2025, compared to 19.3% during 2024.

This decrease was primarily attributable to revenue growth that outpaced the increase in compensation costs for our support personnel.

Other Losses (Gains), Net

Other losses (gains), net totaled a net loss of $3.1 million for the year ended December 31, 2025 and a net gain of $14.2 million for the year ended December 31, 2024.

The $3.1 million of other losses, net for the year ended December 31, 2025 primarily consisted of net remeasurement charges to increase the fair value of our contingent consideration liabilities related to business combinations.

The $14.2 million of other gains, net for the year ended December 31, 2024 primarily consisted of a pre-tax $15.0 million litigation settlement gain for a completed legal matter in which Huron was the plaintiff and $0.5 million of net remeasurement gains to decrease the fair value of our contingent consideration liabilities related to business combinations.

The $0.4 million of other gains, net for the year ended December 31, 2023 primarily consisted of net remeasurement gains to decrease the fair value of our contingent consideration liabilities related to business combinations.

See Note 13 “Fair Value of Financial Instruments” within the notes to our consolidated financial statements for additional information on the fair value of contingent consideration liabilities.

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Restructuring charges for the year ended December 31, 2025 were $9.1 million, compared to $9.9 million for the year ended December 31, 2024.

The $9.1 million of restructuring charges recognized in 2025 primarily consisted of $3.8 million of severance-related expenses;

$3.1 million of rent and related expenses, net of sublease income, for our previously vacated office spaces;

$1.4 million of accelerated depreciation and amortization on the related fixed assets and right-of-use operating lease assets recognized when we abandoned our office spaces in Pensacola, Florida and Boston, Massachusetts;

and a $0.7 million non-cash lease impairment charge driven by updated sublease assumptions for a previously vacated office space.

During 2024, we exited our office space previously occupied by GG+A and a portion of our office space in New York, New York resulting in non-cash impairment charges of $1.4 million and $1.2 million, respectively, on the related right-of-use operating lease assets and fixed assets.

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and $0.8 million related to non-cash lease impairment charges driven by updated sublease assumptions for our previously vacated office spaces.

During 2023, we exited our office spaces in Hillsboro, Oregon and Lexington, Massachusetts, resulting in non-cash impairment charges of $1.9 million and $3.5 million, respectively, on the related right-of-use operating lease assets and fixed assets.

Additionally, restructuring charges incurred in 2023 included $3.0 million of severance-related expenses;

$1.8 million for rent and related expenses, net of sublease income, for previously vacated office spaces;

$0.9 million related to non-cash lease impairment charges driven by updated sublease assumptions for previously vacated office spaces;

and $0.3 million related to the abandonment of a capitalized software development project.

Depreciation and Amortization

Depreciation and amortization expense decreased $0.1 million, or 0.3%, to $24.8 million for the year ended December 31, 2024, compared to $24.9 million for the year ended December 31, 2023.

The $0.1 million decrease in depreciation and amortization expense was primarily attributable to a decrease in amortization of intangible assets, largely offset by an increase in amortization of internally developed software.

Depreciation and amortization expense increased $6.8 million, or 27.4%, to $31.6 million for the year ended December 31, 2025, compared to $24.8 million for the year ended December 31, 2024.

The $6.8 million increase in depreciation and amortization expense was primarily attributable to increases in amortization of intangible assets acquired in business acquisitions and internally developed software.

Operating Income

Operating income increased $43.5 million to $168.8 million for the year ended December 31, 2024 from $125.3 million for the year ended December 31, 2023.

Operating margin, which is defined as operating income expressed as a percentage of revenues before reimbursable expenses, increased to 11.4% for 2024, compared to 9.2% for 2023.

Operating income increased $9.8 million, or 5.8% , to $178.6 million for the year ended December 31, 2025 from $168.8 million for the year ended December 31, 2024.

Operating margin, which is defined as operating income expressed as a percentage of revenues before reimbursable expenses, decreased to 10.7% for 2025, compared to 11.4% for 2024.

Operating income and operating margin for each of our segments as well as unallocated corporate expenses were as follows:

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$ 217,564 $ 191,180 $ 26,384

• Healthcare operating income increased $36.0 million, or 20.8%, primarily due to the increase in revenues before reimbursable expenses and a decrease in contractor expenses;

partially offset by increases in compensation costs for our revenue-generating professionals, practice administration and meetings expenses, technology costs, bad debt expense, and promotion and marketing expenses.

The increases in compensation costs for our revenue-generating professionals were primarily driven by an increase in headcount and annual salary increases that went into effect in the first quarter of 2024, an increase in performance bonus expense, and an increase in share-based compensation expenses;

partially offset by a decrease in signing, retention and other bonus expense.

Healthcare operating margin increased to 27.6% from 25.7% primarily due to the decrease in contractor expenses;

partially offset by an increase in practice administration and meetings expenses, as a percentage of revenues before reimbursable expenses.

• Education operating income increased $9.4 million, or 9.5%, primarily due to the increase in revenues before reimbursable expenses as well as decreases in training expenses and contractor expenses;

partially offset by increases in compensation costs for our revenue-generating professionals and support personnel and amortization of capitalized software development costs.

partially offset by decreases in performance bonus expense and share-based compensation expense for our revenue-generating professionals.

The increase in amortization of capitalized software development costs primarily relates to the redesign of Huron Research Suite that successfully went live in 2024 and reflects our focus on advancing our Education software products.

Education operating margin decreased to 22.9% from 23.1% primarily driven by an increase in salaries and related expenses for our revenue-generating professionals, as a percentage of revenues before reimbursable expenses;

partially offset by the decrease in performance bonus expense for our revenue-generating professionals.

• Commercial operating income decreased $3.0 million, or 5.5%, primarily due to the decrease in revenues before reimbursable expenses as well as increases in compensation costs for our revenue-generating professionals and software and data hosting expenses;

partially offset by decreases in promotion and marketing expenses and restructuring charges.

The increase in compensation costs for our revenue-generating professionals was primarily driven by annual salary increases that went into effect in the first quarter of 2024 and an increase in headcount due to the acquisition of AXIA Consulting in the fourth quarter of 2024;

partially offset by decreases in signing, retention and other bonus expense and performance bonus expense for our revenue-generating professionals.

Commercial operating margin decreased to 20.0% from 21.0% primarily driven by the increase in salaries

and related expenses for our revenue-generating professionals;

partially offset by a decrease in promotion and marketing expenses, as a percentage of revenues before reimbursable expenses.

• Unallocated corporate expenses increased $16.0 million, or 9.1%, primarily due to increases in compensation costs for our support personnel and software and data hosting expenses.

The increase in compensation costs for our support personnel was primarily driven by an increase in headcount and annual salary increases that went into effect in the first quarter of 2024 and an increase in performance bonus expense;

partially offset by decreases in share-based compensation expense and signing, retention and other bonus expense.

• Healthcare operating income increased $46.7 million, or 22.3%, primarily due to the increase in revenues before reimbursable expenses, as well as decreases in salaries and related expenses for our support personnel, bad debt expense, and practice administration and meetings expenses;

partially offset by increases in compensation costs for our revenue-generating professionals and technology expenses.

performance bonus expense, signing, retention and other bonus expense, and share-based compensation expense.

Healthcare operating margin increased to 30.5% from 27.6% primarily due to the decreases in salaries and related expenses for our support personnel, bad debt expense, and practice administration and meetings expenses, and revenue growth that outpaced the increase in salaries and related expenses for our revenue-generating professionals.

• Education operating income increased $4.7 million, or 4.3%, primarily due to the increase in revenues before reimbursable expenses;

partially offset by increases in compensation costs for our revenue-generating professionals and support personnel, amortization of internally developed software, contractor expenses, practice administration and meeting expenses, promotion and marketing expenses, and project costs.

The increases in compensation costs for our revenue-generating professionals and support personnel were primarily driven by an increase in headcount and annual salary increases that went into effect in the first quarter of 2025, partially offset by a decrease in performance bonus expense for our revenue-generating professionals.

Education operating margin decreased to 22.6% from 22.9% primarily driven by the increases in amortization of internally developed software, salaries and related expenses for our support personnel, contractor expenses, practice administration and meetings expenses, projects costs and promotion and marketing expenses, all as percentages of revenues before reimbursable expenses;

partially offset by revenue growth that outpaced the increase in salaries and related expenses for our revenue-generating professionals and the decrease in performance bonus expense for our revenue-generating professionals.

• Commercial operating income increased $4.7 million, or 9.1%, primarily due to the increase in revenues before reimbursable expenses, partially offset by increases in compensation costs for our revenue-generating professionals, contractor expenses, salaries and related expenses for our support personnel and restructuring charges.

The increase in compensation costs for our revenue-generating professionals was primarily due to the increased headcount, driven by our acquisitions of AXIA Consulting and Treliant, annual salary increases that went into effect in the first quarter of 2025, and increases in performance bonus expense and signing, retention and other bonus expense.

Commercial operating margin decreased to 17.2% from 20.0% primarily driven by the increases in salaries and related expenses for our revenue-generating professionals and contractor expenses, as percentages of revenues before reimbursable expenses;

partially offset by revenue growth that outpaced the increase in performance bonus expense for our revenue-generating professionals.

• Unallocated corporate expenses increased $26.4 million, or 13.8%, primarily due to increases in compensation costs for our support personnel, software and data hosting expenses, third-party professional fees, business insurance costs, promotion and marketing expenses, and practice administration and meeting expenses.

The increase in compensation costs for our support personnel was primarily driven by an increase in headcount, annual salary increases that went into effect in the first quarter of 2025 and an increase in deferred compensation expense attributable to the change in the market value of our deferred compensation liability.

The increases in third-party professional fees and business insurance costs were primarily driven by our programmatic acquisition activity.

Other Income (Expense), Net

Interest expense, net of interest income increased $5.8 million to $25.3 million for the year ended December 31, 2024 from $19.6 million for the year ended December 31, 2023, which was primarily attributable to higher levels of borrowing and higher interest rates under our Amended Credit Facility in 2024 compared to 2023.

Interest expense, net of interest income increased $8.9 million to $34.2 million for the year ended December 31, 2025 from $25.3 million for the year ended December 31, 2024, which was primarily attributable to higher levels of borrowing and higher interest rates under our senior secured credit facility in 2025 compared to 2024.

See “Liquidity and Capital Resources” below and Note 7 “Financing Arrangements” within the notes to our consolidated financial statements for additional information about our senior secured credit facility.

Other income (expense), net increased $32.4 million to income of $10.5 million for the year ended December 31, 2024 from expense of $21.9 million for the year ended December 31, 2023.

Other income (expense), net totaled expense of $9.3 million for the year ended December 31, 2025, compared to income of $10.5 million for the year ended December 31, 2024.

In 2025, we recognized pre-tax $10.4 million of non-cash credit-related impairment charges related to our convertible debt investment in a third-party and non-cash impairment charges of $5.0 million on our equity investment in a hospital-at-home company.

These losses were partially offset by a $5.7 million gain recognized for the market value of our investments that are used to fund our deferred compensation liability and $0.4 million of foreign currency transaction gains.

In 2024, we recognized a $4.6 million gain for the market value of our investments that are used to fund our deferred compensation liability, a $3.6 million gain related to the divestiture of our Studer Education practice, and $2.1 million of foreign currency transaction gains.

In 2023, we recognized a non-cash impairment loss of $26.3 million on our preferred stock investment in a hospital-at-home company and $0.5 million of foreign currency transaction losses, which were partially offset by a $4.8 million gain for the market value of our investments that are used to fund our deferred compensation liability.

The gains recognized in 2025 and 2024 related to the market value of our investments that are used to fund our deferred compensation liability were offset with deferred compensation expense attributable to the change in the market value of our deferred compensation liability which is recognized as a component of selling, general and administrative expenses on our consolidated statements of operations.

See Note 3 "Acquisitions and Divestitures" within the notes to our consolidated financial statements for additional information on the divestiture completed in 2024, Note 13 “Fair Value of Financial Instruments” within the notes to our consolidated financial statements for additional information on our preferred stock investment, and Note 15 “Employee Benefit and Deferred Compensation Plans” within the notes to our consolidated financial statements for additional information on our deferred compensation plan.

See Note 3 “Acquisitions and Divestitures” within the notes to our consolidated financial statements for additional information on the divestiture completed in 2024, Note 12 “Derivative Instruments and Hedging Activity” within the notes to our consolidated financial statements for additional information on our foreign exchange forward contracts, Note 13 “Fair Value of Financial Instruments” within the notes to our consolidated financial statements for additional information on our convertible debt and equity investments, and Note 15 “Employee Benefit and Deferred Compensation Plans” within the notes to our consolidated financial statements for additional information on our deferred compensation plan.

Income Tax Expense

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For the year ended December 31, 2024, our effective tax rate was 24.3% as we recognized income tax expense of $37.4 million on income of $154.0 million.

The effective tax rate of 25.5% was more favorable than the statutory rate, inclusive of state income taxes, of 26.2%, primarily due to a discrete tax benefit for share-based compensation awards that vested during the year and the positive impact of certain federal tax credits.

These favorable items were partially offset by certain nondeductible expense items.

The effective tax rate of 24.3% was more favorable than the statutory rate, inclusive of state income taxes, of 26.0%, primarily due to a discrete tax benefit for share-based compensation awards that vested during the year.

This favorable item was partially offset by certain nondeductible expense items.

See Note 17 “Income Taxes” within the notes to our consolidated financial statements for additional information on our income tax expense.

Net Income and Earnings per Share

Net income increased $54.1 million to $116.6 million for the year ended December 31, 2024 from $62.5 million for the year ended December 31, 2023.

Net income for the year ended December 31, 2024 includes the $11.1 million litigation settlement gain, net of tax, recognized in the second quarter of 2024 related to a completed legal matter in which Huron was the plaintiff.

Net income for the year ended December 31, 2023 includes a non-cash impairment loss of $19.4 million, net of tax, related to our preferred stock investment in a hospital-at-home company.

Diluted earnings per share for the year ended December 31, 2024 increased to $6.27, compared to $3.19 for the year ended December 31, 2023, driven by the increase in net income and a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan.

The 2024 litigation settlement gain related to a completed legal matter in which Huron was the plaintiff had a favorable impact of $0.60 on diluted earnings per share in 2024, while the 2023 change in fair value of our preferred stock investment in a hospital-at-home company had an unfavorable impact on our diluted earnings per share of $0.99 in 2023.

Net income decreased $11.6 million, or 9.9%, to $105.0 million for the year ended December 31, 2025 from $116.6 million for the year ended December 31, 2024.

Net income for 2025 includes $7.7 million of non-cash impairment charges, net of tax, related to our convertible debt investment in a third-party.

Net income for 2024 includes an $11.1 million litigation settlement gain, net of tax, related to a completed legal matter in which Huron was the plaintiff.

Diluted earnings per share for the year ended December 31, 2025 decreased to $5.84, compared to $6.27 for the year ended December 31, 2024, driven by the decrease in net income, partially offset by a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan.

The non-cash credit-related impairment charges on our convertible debt investment had an unfavorable $0.43 impact on diluted EPS for the year ended December 31, 2025, while the litigation settlement gain related to a completed legal matter in which Huron was the plaintiff had a favorable impact of $0.60 on diluted earnings per share for the prior year period.

EBITDA and Adjusted EBITDA

EBITDA increased $75.9 million to $205.0 million for the year ended December 31, 2024 from $129.1 million for the year ended December 31, 2023.

The increase in EBITDA was attributable to the increases in Healthcare and Education operating income, excluding segment depreciation and amortization;

the $26.3 million non-cash impairment loss related to our preferred stock investment in a hospital-at-home company recognized in 2023;

and the pre-tax $15.0 million litigation settlement gain recognized in the second quarter of 2024 for a

completed legal matter in which Huron was the plaintiff.

These increases to EBITDA were partially offset by the increase in unallocated corporate expenses, excluding the impact of the change in the market value of our deferred compensation liability.

Adjusted EBITDA increased $33.8 million to $201.2 million for the year ended December 31, 2024 from $167.3 million for the year ended December 31, 2023.

The increase in adjusted EBITDA was primarily attributable to the increases in Healthcare and Education operating income, excluding the impact of segment depreciation and amortization and segment restructuring charges;

EBITDA decreased $3.3 million, or 1.6%, to $201.8 million for the year ended December 31, 2025 from $205.0 million for the year ended December 31, 2024.

The decrease in EBITDA was primarily attributable to the increase in unallocated corporate expenses, excluding the impact of the change in the market value of our deferred compensation liability;

the pre-tax $15.0 million litigation settlement gain recognized in 2024 for a completed legal matter in which Huron was the plaintiff;

the pre-tax $10.4 million of non-cash credit-related impairment charges recognized in 2025 related to our convertible debt investment in a third-party;

and the $5.0 million of non-cash impairment charges recognized on our equity investment in a hospital-at-home company in 2025.

These decreases were partially offset by the increases in segment operating income for all three of our segments, excluding segment depreciation and amortization.

Adjusted EBITDA increased $36.3 million, or 18.1% , to $237.5 million for the year ended December 31, 2025 from $201.2 million for the year ended December 31, 2024.

The increase in adjusted EBITDA was primarily attributable to the increases in segment operating income for all three of our segments, excluding the impact of segment depreciation and amortization and segment restructuring charges;

partially offset by the increase in unallocated corporate expenses, excluding the impacts of the change in the market value of our deferred compensation liability and transaction-related expenses.

Adjusted Net Income and Adjusted Earnings per Share

Adjusted net income increased $24.2 million to $120.4 million for the year ended December 31, 2024, compared to $96.2 million for the year ended December 31, 2023.

Adjusted diluted earnings per share increased to $6.47 in 2024, compared to $4.91 in 2023, driven by the increase in adjusted net income and a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan.

Adjusted net income increased $20.4 million, or 16.9% , to $140.8 million for the year ended December 31, 2025, compared to $120.4 million for the year ended December 31, 2024.

As a result of the increase in adjusted net income, as well as a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan, adjusted diluted earnings per share increased to $7.83 in 2025, compared to $6.47 in 2024.

LIQUIDITY AND CAPITAL RESOURCES

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Effect of exchange rate changes on cash (16) (173) 32

Net increase (decrease) in cash and cash equivalents $ 9,762 $ 315 $ (8,947)

Net increase in cash and cash equivalents

$ 2,597 $ 9,762 $ 315

Operating Activities

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Our purchase obligations primarily consist of payments for software and other information technology products to support our business and corporate infrastructure.

Net cash provided by operating activities increased $66.1 million to $201.3 million in 2024 from $135.3 million in 2023.

The increase in net cash provided by operating activities primarily related to an increase in cash collections in 2024, a $15 million litigation settlement received in 2024 for a completed legal matter in which Huron was the plaintiff, and a decrease in payments for contractor expenses in 2024 compared to 2023;

Net cash provided by operating activities decreased $7.9 million to $193.4 million in 2025 from $201.3 million in 2024.

The decrease in net cash provided by operating activities primarily related to an increase in payments for salaries and related expenses for our revenue-generating professionals, an increase in payments for selling, general and administrative expenses, a $15 million litigation settlement received in 2024 for a completed legal matter in which Huron was the plaintiff, an increase in the amount paid for annual performance bonuses in the first quarter of 2025 compared to the first quarter of 2024, and an increase in payments for contractor expenses;

largely offset by an increase in cash collections in 2025 compared to the prior year.

Investing Activities

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and investments.

Our investments include a convertible note investment in Shorelight Holdings, LLC, a preferred stock investment in a hospital-at-home company, and investments in life insurance policies that are used to fund our deferred compensation liability.

Our investments include a convertible note investment in Shorelight Holdings, LLC, an equity investment in a hospital-at-home company, and investments in life insurance policies that are used to fund our deferred compensation liability.

Net cash used in investing activities was $145.8 million for 2025 which primarily consisted of $111.6 million for purchases of businesses;

$20.6 million for payments related to internally developed software to advance our Education and Healthcare software products;

$10.4 million for purchases of property and equipment, primarily related to purchases of computers and related equipment and leasehold improvements for certain office spaces;

and $3.2 million for contributions to our life insurance policies.

Net cash used in investing activities was $79.7 million for 2024 which primarily consisted of $49.5 million for purchases of businesses;

$23.9 million for payments related to internally developed software to advance our Healthcare and Education software products;

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These uses of cash for investing activities were partially offset by $4.7 million of cash received related to the divestiture of our Studer Education practice in the fourth quarter of 2024.

Net cash used in investing activities was $36.7 million for 2023 which primarily consisted of $25.7 million for payments related to internally developed software to advance our Healthcare and Education software products;

$9.4 million for purchases of property and equipment,

primarily related to purchases of computers and related equipment and leasehold improvements for certain office spaces;

$3.1 million for contributions to our life insurance policies;

and $1.6 million for the purchase of a business.

These uses of cash for investing activities were partially offset by $3.0 million of cash received for distributions from our life insurance policies that are used to fund our deferred compensation liability.

We estimate that cash utilized for purchases of property and equipment and software development in 2026 will total approximately $30 million to $40 million;

primarily consisting of software development costs, information technology-related equipment to support our corporate infrastructure, and leasehold improvements and furniture and fixtures for certain office locations

primarily consisting of leasehold improvements and furniture and fixtures for certain office locations, information technology-related equipment to support our corporate infrastructure, and software development costs.

Financing Activities

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Net cash used in financing activities was $45.0 million in 2025.

During 2024, we borrowed $743.5 million and made repayments on our borrowings of $709.8 million.

The borrowings and repayments during 2024 include the $275.0 million Term Loan proceeds which were used to repay borrowings under the Revolver in the first quarter of 2024.

The net borrowings of $33.7 million were primarily used to fund our operations, including our annual performance bonus payments in the first quarter of 2024.

The net borrowings of $153.3 million during 2025 were primarily used to fund our operations, including our annual performance bonus payments in the first quarter of 2025, and our programmatic business acquisitions.

The aggregate borrowings and repayments during 2025 include the $400 million term loan proceeds received in the third quarter of 2025 under the Amended Credit Agreement, which were used to repay outstanding borrowings under the Third Amended and Restated Credit Agreement (the “Existing Credit Agreement”).

In conjunction with the closing of the Amended Credit Agreement, we paid $3.1 million of debt issuance costs.

See “Financing Arrangements” below for additional information on the Amended Credit Agreement.

Additionally, during 2025, we paid $166.7 million for the settlement of share repurchases and we reacquired $33.6 million of common stock as a result of tax withholdings upon vesting of share-based compensation.

We also made payments of $1.4 million for debt issuance costs related to the Term Loan.

These uses of cash for financing activities were partially offset by $5.1 million of cash received from stock option exercises in 2025.

Net cash used in financing activities was $111.6 million in 2024.

During 2023, we borrowed $354.0 million primarily to fund our operations, including our annual performance bonus payments in the first quarter of 2023,and made repayments on our borrowings of $320.0 million.

During 2024, we borrowed $743.5 million and made repayments on our borrowings of $709.8 million.

The borrowings and repayments during 2024 include the $275.0 million term loan proceeds received under the Existing Credit Agreement in the first quarter of 2024, which were used to repay borrowings under the revolver in the first quarter of 2024.

The net borrowings of $33.7 million were primarily used to fund our operations, including our annual performance bonus payments in the first quarter of 2024.

Additionally, in 2024, we paid $123.0 million for the settlement of share repurchases and we reacquired $22.1 million of common stock as a result of tax withholdings upon vesting of share-based compensation.

We also made deferred acquisition payments of $1.5 million to the sellers of certain businesses we acquired.

These payments were primarily the result of achieving specified financial performance targets in accordance with the related purchase agreements.

We also made payments of $1.4 million for debt issuance costs related to the term loan established under the Existing Credit Agreement.

These uses of cash for financing activities were partially offset by $1.8 million of cash received from stock option exercises in 2024.

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In November 2020, our board of directors authorized a share repurchase program permitting us to repurchase up to $50 million of our common stock through December 31, 2021.

The share repurchase program has been subsequently extended and increased, most recently in the second quarter of 2024.

The current authorization extends the share repurchase program through December 31, 2025 with a repurchase amount of $500 million, of which $64.5 million remains available as of December 31, 2024.

Subsequently, our board of directors authorized extensions of the share repurchase program through December 31, 2026 and increased the authorized amount to $700 million, of which $99.0 million remained available as of December 31, 2025.

In the first quarter of 2026, our board of directors authorized a further increase to the authorized amount under the share repurchase program from $700 million to $900 million.

The amount and timing of repurchases under the share repurchase program were and will continue to be determined by management and depend on a variety of factors, including the trading price of our common stock, capacity under our credit facility, general market and business conditions, and applicable legal requirements.

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At December 31, 2025, we had $511.0 million outstanding under our Amended Credit Agreement, as discussed below.

The Company has a $600 million senior secured revolving credit facility (the “Revolver”) and a $275 million senior secured term loan facility (the “Term Loan”), subject to the terms of the Third Amended and Restated Credit Agreement dated as of November 15, 2022 (as amended, the “Amended Credit Agreement”), both of which fully mature on November 15, 2027.

The Term Loan was established in February 2024 with the execution of Amendment No.

2 to the Third Amended and Restated Credit Agreement.

The Term Loan is subject to scheduled quarterly amortization payments of $3.4 million which began June 30, 2024 and continue through the maturity date of November 15, 2027, at which time the outstanding principal balance and all accrued interest will be due.

The company has a $700 million Revolver and a $400 million Term Loan, subject to the terms of the Amended Credit Agreement, both of which mature on July 30, 2030.

The Term Loan is subject to scheduled quarterly amortization payments of $5.0 million which began September 30, 2025 and continue through the maturity date of July 30, 2030, at which time the outstanding principal balance and all accrued interest will be due.

The Amended Credit Agreement amended and restated the Existing Credit Agreement in its entirety.

Fees and interest on borrowings under the Amended Credit Agreement vary based on our Consolidated Leverage Ratio (as defined in the Amended Credit Agreement).

At our option, these borrowings will bear interest at one, three or six month Term SOFR or, in the case of the Revolver, an alternate base rate, in each case plus the applicable margin.

The applicable margin for borrowings under the Revolver will fluctuate between 1.125% per annum and 1.875% per annum, in the case of Term SOFR borrowings, or between 0.125% per annum and 0.875% per annum, in the case of base rate loans, based upon our Consolidated Leverage Ratio at such time.

The applicable margin for the outstanding principal under the Term Loan will range between 1.625% per annum and 2.375% per annum based upon our Consolidated Leverage Ratio at such time.

The fees and interest are subject to further adjustment based upon the Company's performance against specified key performance indicators.

Based upon the performance of the Company against those key performance indicators in each Reference Year (as defined in the Amended Credit Agreement), certain adjustments to the otherwise applicable rates for interest,

commitment fees and letter of credit fees will be made.

These annual adjustments will not exceed an increase or decrease of 0.01% in the aggregate for all key performance indicators in the case of the commitment fee rate or an increase or decrease of 0.05% in the aggregate for all key performance indicators in the case of the Term SOFR borrowings, base rate borrowings or letter of credit fee rate.

At our option, these borrowings will bear interest at one, three or six month Term SOFR or an alternate base rate, in each case plus the applicable margin.

The applicable margin will fluctuate between 1.250% per annum and 1.875% per annum, in the case of Term SOFR borrowings, or between 0.250% per annum and 0.875% per annum, in the case of base rate loans, based upon our Consolidated Leverage Ratio at such time.

Amounts borrowed under the Amended Credit Agreement may be prepaid at any time without premium or penalty.

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Pursuant to the terms of the Amended Credit Agreement, if our Consolidated Leverage Ratio is greater than 3.50, the amount of dividends and other Restricted Payments (as defined in the Amended Credit Agreement) we may pay is limited to an amount up to $50 million.

Borrowings outstanding under the Amended Credit Agreement at December 31, 2024 and 2023 totaled $357.7 million and $324.0 million, respectively.

Of the $357.7 million outstanding as of December 31, 2024, $93.0 million was outstanding under the Revolver and $264.7 million was outstanding under the Term Loan.

There were no borrowings outstanding under the Term Loan at December 31, 2023.

Borrowings outstanding under the Amended Credit Agreement at December 31, 2025 totaled $511.0 million, consisting of $121.0 million outstanding under the Revolver and $390.0 million outstanding under the Term Loan.

Borrowings outstanding under the Existing Credit Agreement at December 31, 2024 totaled $357.7 million, consisting of $93.0 million outstanding under the senior secured revolving credit facility of the Existing Credit Agreement and $264.7 million outstanding under the senior secured term loan facility of the Existing Credit Agreement.

These borrowings carried a weighted average interest rate of 5.3% at December 31, 2025 and 4.7% at December 31, 2024 including the impact of the interest rate swaps described in Note 12 “Derivative Instruments and Hedging Activity" within the notes to the consolidated financial statements.

The borrowing capacity under the Revolver is reduced by any outstanding borrowings under the agreement and outstanding letters of credit.

At December 31, 2024 and 2023, we had outstanding letters of credit totaling $0.4 million and $0.5 million, respectively, which are used as security deposits for our office facilities.

At both December 31, 2025 and 2024, we had outstanding letters of credit totaling $0.4 million, which are used as security deposits for our office facilities.

As of December 31, 2025 and 2024, the unused borrowing capacity under the Revolver was $578.6 million and $506.6 million, respectively.

Refer to Note 7 “Financing Arrangements” for additional information on our senior secured credit facility within the notes to the consolidated financial statements.

For a discussion of certain risks and uncertainties related to the Current Credit Agreement, see Part I—Item 1A.

Refer to Note 7 “Financing Arrangements” within the notes to the consolidated financial statements for additional information on our senior secured credit facility.

For a discussion of certain risks and uncertainties related to the Amended Credit Agreement, see Part I—Item 1A.

“Risk Factors.”

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Our revenue is generated under four types of billing arrangements:

fixed-fee (including software license revenue);

time-and-expense;

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Healthcare, Education, and Commercial.

Under GAAP, we have the option to first assess qualitative factors to determine whether the existence of current events or circumstances would lead to a determination that it is more likely than not that the fair value of one of our reporting units is greater than its carrying value.

Under GAAP, we have the option to first assess qualitative factors to determine whether the existence of current events or circumstances would lead to a determination that it is more likely than not that the fair value of one or more of our reporting units is greater than its carrying value.

If we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying value, no further testing is necessary.

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Our forecasts are based on historical experience, current backlog, expected market demand, and other industry information.

In the market approach, we utilize the guideline company method, which involves calculating EBITDA multiples based on

operating data from guideline publicly traded companies.

Multiples derived from guideline companies provide an indication of how much a

knowledgeable investor in the marketplace would be willing to pay for a company.

These multiples are evaluated and adjusted based on

specific characteristics of the reporting units relative to the selected guideline companies and applied to the reporting units' operating data to

arrive at an indication of value.

In the market approach, we utilize the guideline company method, which involves calculating EBITDA multiples based on operating data from guideline publicly traded companies.

Multiples derived from guideline companies provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company.

These multiples are evaluated and adjusted based on specific characteristics of the reporting units relative to the selected guideline companies and applied to the reporting units' operating data to arrive at an indication of value.

The following is a discussion of the goodwill impairment test performed during 2025.

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Healthcare, Education, and Commercial.

We elected to bypass the qualitative assessment and utilized the quantitative goodwill impairment test to provide an updated fair value for each reporting unit as the most recent valuation quantitative analysis performed was as of January 1, 2022.

For each reporting unit, we reviewed goodwill for impairment by comparing the fair value of the reporting unit to its carrying value, including goodwill.

In estimating the fair value of the reporting units, we relied on a combination of the income approach and the market approach, as discussed above, with a fifty-fifty weighting.

Based on the results of the goodwill impairment test, we determined the fair value of the Healthcare, Education, and Commercial reporting units exceeded their carrying value by approximately 105%, 185%, and 335%, respectively.

As such, we concluded that there is no indication of goodwill impairment for these three reporting units.

Determining the fair value of a reporting unit requires us to make significant judgments, estimates, and assumptions.

While we believe that the estimates and assumptions underlying our valuation methodology are reasonable, these estimates and assumptions could have a significant impact on whether or not a non-cash goodwill impairment charge is recognized and also the magnitude of any such charge.

We performed a qualitative assessment over all reporting units to determine if it was more likely than not the respective fair values of these reporting units were less than their carrying amounts, including goodwill.

For our qualitative assessment, we considered the most recent quantitative analysis performed for each reporting unit, which was as of November 30, 2024, including the key assumptions used within that analysis, the indicated fair values, and the amount by which those fair values exceeded their carrying amounts.

One of the key assumptions used within the prior quantitative analysis was our internal financial projections;

therefore, we considered the actual performance of each reporting unit during 2025 compared to the internal financial projections used, as well as specific outlooks for each reporting unit based on our most recent internal financial projections.

We also reviewed the current carrying value of each reporting unit in comparison to the carrying values as of the prior quantitative analysis.

In addition, we considered various factors, including macroeconomic conditions, relevant industry and market trends for each reporting unit, and other entity-specific events, that could indicate a potential change in the fair value of our reporting units or the composition of their carrying values.

Based on our assessments, we determined that it was more likely than not that the fair values for each of our reporting units exceeded their respective carrying amounts.

As such, the goodwill for our reporting units was not considered impaired as of November 30, 2025, and a quantitative goodwill impairment analysis was not necessary.

The results of an impairment analysis are as of a point in time.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis