HURN 10-K & 10-Q changes, risk factors and insider trading

An inability to retain our senior management team and other managing directors and principals would be detrimental to the success of our business.

We rely heavily on our senior management team, our industry and capability leaders, and other managing directors,directors and principals, and our ability to retain them is particularly important to our future success. Given the highly specialized nature of our services, the senior management team must have a thorough understanding of our service offerings as well as the skills and experience necessary to manage an organization consisting of a diverse group of professionals. In addition, we rely on our senior management team and other managing directors and principals to generate revenues and market our business. Further, our senior management’s and other managing directors’ and principals' personal reputations and relationships with our clients are a critical element in obtaining and maintaining client engagements. Members of our senior management team and our other managing directors and principals could choose to leave or join one of our competitors and some of our clients could choose to use the services of that competitor instead of our services. If one or more members of our senior management team or our other managing directors or principals leave and we cannot replace them with a suitable candidate quickly, or if legal restrictions on non-competition agreements are put into place, we could experience difficulty in securing and successfully completing engagements, managing our business properly and executing on our growth strategy, which could harm our business prospects and results of operations.

Our business involves the delivery of professional services and is highly labor-intensive. Our success depends largely on our general ability to attract, develop, motivate, and retain highly skilled professionals. Further, we must successfully maintain the right mix of professionals with relevant experience and skill sets as we continue to grow, as we expand into new service offerings, and as the market evolves. The loss of a significant number of our professionals, the inability to attract, hire, develop, train, and retain additional skilled personnel, or failure to maintain the right mix of professionals could have a serious negative effect on us, including our ability to manage, staff, and successfully complete our existing engagements and obtain new engagements. Further, if we cannot develop, train, and retain highly skilled professionals, it may impact our ability to keep pace with rapid and continuing changes in technology and respond to changes in client demand in a rapidly evolving market for professional services. Qualified professionals are in great demand, and we face significant competition for both senior and junior professionals with the requisite credentials and experience. Our principal competition for talent comes from other consulting firms and accounting firms, as well as from organizations seeking to staff their internal professional positions. Many of these competitors may be able to offer greater compensation and benefits or more attractive lifestyle choices, career paths, or geographic locations than we can offer. Additionally, we may find it difficult to hire, develop and retain qualified professionals in certain geographic regions where historically our operations have been limited. Therefore, we may not be successful in attracting and retaining the skilled consultants we require to conduct and expand our operations successfully. Increasing competition for these revenue-generating professionals may also significantly increase our labor costs, which could negatively affect our margins and results of operations.

As we continue to grow and evolve, it might become increasingly difficult to maintain effective standards across a large, global enterprise and effectively institutionalize our knowledge or to effectively change the strategy, operations or culture of our Company in a timely manner. It might also become more difficult to maintain our culture; effectively manage and monitor our people and operations; effectively communicate our core values, policies and procedures, strategies and goals; and motivate, engage and retain our people, particularly given the distribution of our employees across the U.S. and internationally, the rate of new hires, the breadth of skills and expertise across all of our solutions, and the fact that essentially all of our employees have the option to work remotely. The size and scope of our operations increase the possibility that we will have employees who expose us to unacceptable business risks, despite our efforts to train them and maintain internal controls to prevent such instances. For example, employee misconduct could involve the improper use of sensitive or confidential information entrusted to us, or obtained inappropriately, or the failure to comply with legislation or regulations regarding the protection of sensitive or confidential information, including personal data and proprietary information. Furthermore, the inappropriate use of social networking sites or AI by our employees could result in breaches of confidentiality, unauthorized disclosure of nonpublic company information or damage to our reputation. If we do not continue to develop and implement the right processes and tools to manage our enterprise and instill our culture and core values into all of our employees, our ability to compete successfully and achieve our business objectives could be impaired. In addition, effective January 1, 2022, we made, and continue to make, changes to our operating model, including how we are organized as the needs and size of our business change, and despite the operating model yielding positive synergies and impacts to date, if we do not continue to successfully implementrefine the changes, our business and results of operationoperations may be negatively impacted.

•employment laws, including immigration laws affecting the mobility of employees, and rules and related social and cultural factors, including geopolitical factors affecting labor mobility;

We have significant operations in India, including approximately 2,6503,500 employees, which could subject the Company to country-specific risks or exacerbate certain other risks. For example, from time to time, India has experienced instances of civil unrest, terrorism and hostilities among neighboring countries. Terrorist attacks, military activity, rioting, or civil or political unrest in the future could influence the Indian economy and our operations by disrupting operations and communications and making travel within India more difficult and less desirable. Further, India has experienced natural disasters such as earthquakes, tsunamis, floods, landslides and drought in the past few years. The extent and severity of these natural disasters determines their impact on the Indian economy. Our operations and employees in India may be adversely affected by these or other social and political uncertainties or change, military activity, health-related risks, acts of terrorism or natural disasters. Additionally, as the overall population of India is large, and the cities in which we operate are dense, the impact of any such occurrences could have a disproportionate adverse effect on our operations.

Additionally, effective January 1, 2022, we modified our operating model to report under three industries, which are our reportable segments. The new operating model was designed to strengthen Huron's go-to-market strategy and support our growth. The full implementation across all areas of our business to effect this change mayhas taketaken place over several years. IfDespite the operating model yielding positive synergies and impacts to date, if we do not continue to successfully implement and refine this change to our operating model, our business and results of operationoperations may be negatively impacted.

The healthcare and education industries are areas of significant focus for our business, and factors that adversely affect the financial condition of these industries could consequently affect our business.

Additionally, regulatory and legislative changes in these industries, or executive actions impacting these industries, could reduce the demand for our services, decrease our competitive position or potentially render certain of our service offerings obsolete, change client buying patterns or decision making or require us to make unplanned modifications to our service offerings, which could require additional time and investment. If we fail to accurately anticipate the application of the laws and regulations affecting our clients and the industries they serve, if anticipated changes in regulation or regulatory uncertainty impact client buying patterns, or if such laws,regulations,laws, regulations, and executive actions decrease our competitive position or limit the applicability of our service offerings, our results of operations and financial condition could be adversely impacted. Similarly, certain of our healthcare and education clients may experience or anticipate experiencing financial distress or face complex challenges as a result of general economic conditions, operations-specific reasons or uncertainty in regulatory schemes. Such clients may not have the financial resources or stakeholder support to start new projects or to continue existing projects.

There are many factors that could affect the purchasing practices, operations, and, ultimately, the operating funds of healthcare and education organizations, such as reimbursement policies for healthcare and research-related expenses, student loan policies or regulations, federal and state budgetary considerations, increased taxes, changes in the tax exempt status of healthcare and education organizations, internal stakeholders’ views of engaging third-party consultants, consolidation in either industry, and regulation, litigation, and general economic conditions. In particular, we could be required to make unplanned modifications of our products and services (which would require additional time and investment) or we could suffer reductions in demand for our products and services as a result of proposed or enacted changes in regulations affecting either industry, such as changes in the way that healthcare organizations are paid for their services (e.g., based on patient outcomes instead of services provided), changes to Medicare or Medicaid reimbursements, changes to cost rates or reimbursement rates applicable to research grants, or a decline in the level of federal or state grant spending in general. Levels of government spending are difficult to predict and subject to significant risk. Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new U.S. presidential administration and Congress and what challenges budget reductions will present for the healthcare and education industries generally.Congress. Pressures on and uncertainty surrounding the U.S. federal and state governments' budgets, and potential changes in budgetary priorities and spending levels, could adversely affect the funding for individual programs and delay purchasing or payment decisions by our customers.

Our financial results depend, in part, on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology to serve the evolving needs of our clients. Examples of areas of significant change include digital and analytic services and products,products and AI-based solutions, which are continually evolving. Technological developments may materially affect the cost and use of current technology by our clients and some of these technological developments may reduce and replace some of our historical services and products. This changing technological landscape may cause clients to delay spending under existing contracts and engagements and delay entering into new contracts while they evaluate new technologies. Such spending delays can negatively impact our results of operations.

Technological developments,developments and advancements in AI, which may be rapid, also could shift demand to new services and products. If, as a result of new technologies,technologies or AI functionality, our clients demand new services and products, we may be less competitive in these new areas or we may need to make significant investment in our portfolio of software products to meet that demand. Our growth strategy focuses on responding to these types of developments by driving innovation that will enable us to expand our business into new growth areas and enhance our current portfolio of software products. If we do not sufficiently invest in new technology,technology and AI, adapt to industry developments, evolve and expand our business at sufficient speed and scale, or make the right strategic investments, or fail to timely deliver on our product roadmap for our portfolio of software products to respond to these developments and successfully drive innovation, our services and products, our results of operations, and our ability to develop and maintain a competitive advantage and execute on our growth strategy could be adversely affected. Additionally, as we expand our services and products into these new areas, we may be exposed to operational, legal, regulatory, ethical, technological and other risks specific to such new areas, which may negatively affect our reputation and demand for our services and products.

We depend on the use of sophisticated technologies and systems. Many of our practices provide services that are increasingly dependent on the use of software applications and systems that we do not own and which could become unavailable. Moreover, our technology platforms will require continuing investments by us in order to expand existing service offerings and develop complementary services.services, including AI functionality. For example, we have subscription-based offerings that require us to incur costs associated with upgrades and maintenance that could impact profit margins associated with those offerings and related services. Our future success depends on our ability to adapt our services and infrastructure while continuing to improve the performance, features, security, and reliability of our services in response to the evolving demands of the marketplace.

A portion of our services and solutions depend on technology or software provided by third-party vendors. Some of these third-party vendorsthird-parties refer potential clients to us, and others require that we obtain their permission prior to accessing their software while performing services for our clients. These third-party vendors could terminate their relationship with us without cause and with little or no notice, which could limit our service offerings and harm our financial condition and operating results. Moreover, if third-party technology or software that is important to our business does not continue to be available or utilized within the marketplace, or if the services that we provide to clients are no longer relevant in the marketplace, our business may be unfavorably impacted. In addition, if a third-party vendor’svendor's business changes, is reduced, fails to adapt to changing market demands, or if a third-party vendor's business or third-party technology or software that is important to our business experiences system failures, service interruptions, or security breaches,breaches or is no longer supported, it could adversely affect our business. Additionally, our third parties may depend on their own third-party vendors, which would be fourth parties to Huron. We generally do not have direct contact,oversight oversight,or contracts, sometimes knowledge,knowledge of these fourth parties. If a fourth party were to be breached, we would be reliant upon our third party to provide information and manage the incident.

Our organization is comprised of employees who work on matters throughout the United States and around the world. Our technology platform is a “virtual office” from which we all operate. We may be subject to disruption to our operating systems from technology events that are beyond our control, including the possibility of failures at third-party data centers, disruptions to the internet, natural disasters, power losses, and malicious attacks. In addition, despite the implementation of security measures, our infrastructure and operating systems, including the internet and related systems, may be vulnerable to physical break-ins, phishing, impersonation (including through AI deepfakes), hackers, improper employee or contractor access, computer viruses or malware, programming errors, denial-of-service attacks, cyberattacks, or other attacks by third parties seeking to disrupt operations or misappropriate information or similar physical or electronic breaches of security. While we have taken and are taking reasonable steps to prevent and mitigate the damage of such events, including implementation of system security measures, information backup, disaster recovery processes, and crisis response plans, and where possible, obtaining insurance against such events, those steps may not be effective and there can be no assurance that any such steps can be effective against all possible risks. We will need to continue to invest in technology in order to achieve redundancies necessary to prevent service interruptions. Unauthorized access to our systems as a result of a security breach, the failure of our systems, or the loss of data could result in legal claims or proceedings, liability, or regulatory penalties and disrupt operations, which could adversely affect our business and financial results. In addition, our clients and their third-party service providers are subject to technology failures, disruptions, malicious activity and cyberattacks, the result of which could cause a disruption in our ability to deliver services or to yield positive outcomes for our clients as well as potentially impact our network and systems. If such circumstances were to occur, our consultants may become underutilized, which could adversely affect our revenues and results of operations in future periods. Furthermore, these events could impact the confidentiality, integrity, or availability of our systems.

As with many innovations, AI presents risks, challenges, and unintended consequences that could affect its adoption, and therefore our business. We incorporate AI solutions into some of our information platforms, products and services, and these technologies may become increasingly important to our operations over time. AI technologies are complex and rapidly evolving and the technologies that we use or develop may ultimately be flawed or we may be unable to leverage AI capabilities as quickly as the market and our clients demand. Additionally, leveraging AI capabilities to potentially improve our information platforms, products and services presents further risks and challenges. If we experience an actual or perceived breach of privacy or security incident because of the use of AI, we may lose valuable sensitive or confidential client or employee data which could damage our reputation. Further, dependence on AI without adequate safeguards to make certain business decisions may introduce additional operational vulnerabilities by impacting our relationships with customers, partners, and third-party vendors,third-parties, by producing inaccurate outcomes based on flaws in the underlying data, or other unintended results.

While we have taken and are taking reasonable steps to prevent and mitigate risks, further incorporating AI gives rise to litigation risk and risk of non-compliance and unknown cost of compliance, as AI is an emerging technology for which the legal and regulatory landscape is not fully developed (including potential liability for breaching intellectual property or privacy rights or laws). While new AI initiatives, laws, and regulations are emerging and evolving, what they ultimately will look like remains uncertain, and our obligation to comply with themproposed or enacted AI initiatives, laws, and policies regulating AI, such as the European Union's AI Act, could entail significant costs, negatively affect our business, or entirely limit our ability to incorporate certain AI capabilities into our offerings.

We rely on information technology systems to process, transmit, and store electronic information and to communicate among our locations around the world and with our clients, partners, and employees. These locations include India, Canada, Switzerland, France, Singapore, and the United Kingdom, all of which have their own either recently updated or potential new data protection laws. The breadth and complexity of this infrastructure increases the potential risk of security breaches which could lead to potential unauthorized disclosure of confidential information.

In providing services to clients, we may manage, utilize, and store sensitive or confidential client or employee data, including personal data and protected health information. As a result, we are subject to numerous laws and regulations designed to protect this information, such as the U.S. federal and state laws governing the protection of health or other personally identifiable information, including the Health Insurance Portability and Accountability Act (HIPAA), and international laws such as the European Union's General Data Protection Regulation (GDPR). In addition, many states, U.S. federal governmental authorities and non-U.S. jurisdictions have adopted, proposed or are considering adopting or proposing,proposing additional data security and/or data privacy statutes or regulations. Continued governmental focus on data security and privacy may lead to additional legislative and regulatory action, which could increase the complexity of doing business. The increased emphasis on information security and the requirements to comply with applicable U.S. and foreign data security and privacy laws and regulations may increase our costs of doing business and negatively impact our results of operations. Our ongoing expansion into international jurisdictions may also result in additional risks or increase the acuity of risks that are not present domestically with respect to privacy laws and regulations.

We have a ThirdFourth Amended and Restated Security Agreement with Bank of America (the “Security Agreement”) and a ThirdFourth Amended and Restated Pledge Agreement (the “Pledge Agreement”) associated with our ThirdFourth Amended and Restated Credit Agreement, dated as of NovemberJuly 15,30, 20222025 (as amended to date, the “Amended Credit Agreement”). with Bank of America, N.A. Pursuant to the Security Agreement and to secure our obligations under the Amended Credit Agreement, we granted our lenders a first-priority lien, subject to permitted liens, on substantially all of the personal property assets that we and the subsidiary grantors own. Pursuant to the Pledge Agreement, we granted our lenders a security interest in 100% of the stock or other equity interests in all domestic subsidiaries and 65% of the stock or other equity interests in each “material first-tier foreign subsidiaries” (as defined in the Pledge Agreement) entitled to vote and 100% of the stock or other equity interests in each material first-tier foreign subsidiary not entitled to vote. If we default on our obligations under the Amended Credit Agreement, our lenders could accelerate our indebtedness and may be able to exercise their liens on the equity interests subject to the Pledge Agreement and their liens on substantially all of our assets and the assets of our subsidiary grantors, which would have a material adverse effect on our business, operations, financial condition, and liquidity. In addition, the covenants contained in the Amended Credit Agreement impose restrictions on our ability to engage in certain activities, such as the incurrence of additional indebtedness, certain investments, certain acquisitions and dispositions, and the payment of dividends.

AsThe ofAmended DecemberCredit 31,Agreement 2024, we haveestablished a $600$700 million senior secured revolving credit facility (the “Revolver”) and a $275$400 million senior secured term loan facility (the “Term Loan”), both of which fully mature on NovemberJuly 15,30, 2027.2030. As of December 31, 2024,2025, we had outstanding indebtedness of $357.7$511.0 million, of which $93.0$121.0 million was outstanding under the Revolver and $264.7$390.0 million was outstanding under the Term Loan. Our ability to make scheduled payments of the principal, to pay interest, or to refinance our indebtedness, depends on our future performance. If we are unable to generate cash flow from operations sufficient to satisfy our obligations under our current indebtedness and any future indebtedness, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing, or obtaining additional equity capital on terms that may be onerous or dilutive. Our ability to refinance our current indebtedness or future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on the current indebtedness or future indebtedness.

In addition, our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences such as exposing us to the risk of increased interest rates because our borrowings are at variable interest rates; making us more vulnerable to adverse changes in general U.S. and worldwide economic, industry, and competitive conditions and adverse changes in government regulation; or reducing our capacity to obtain additional financing and flexibility in planning for, or reacting to, changes in our business and our industry. Under the Amended Credit Agreement, we are obligated to pay interest, at our option, at either one, three or six month Term SOFR or, in the case of the Revolver,or at an alternate base rate, in each case plus an applicable margin. SOFR is a relatively new reference rate, has a very limited history and is based on short-term repurchase agreements backed by Treasury securities. Changes in SOFR can be volatile and difficult to predict, and there is no assurance that SOFR will perform similarly to the way LIBOR, our previous benchmark rate, would have performed at any time. Any of these factors could materially and adversely affect our business, financial condition, and results of operations.

We mayhave incurincurred impairment charges with respect to our convertible debt investment in Shorelight orand our preferred stock investment in a hospital-at-home company.company, and we may incur additional impairment charges that could materially impact our results of operations.

Since 2014, we have invested $40.9 million, in the form of 1.69% convertible debt, in Shorelight Holdings, LLC (“Shorelight”), the parent company of Shorelight Education. Our investment is carried at its fair value of $62.3 million as of December 31, 2024, with unrealized holding gains and losses reported in other comprehensive income.income and credit-related impairment charges reported in our results of operations. As of December 31, 2024,2025, our investment in Shorelight is in an unrealized gain position. If the investment were to be in an unrealized loss position duewith toa significantfair creditvalue deteriorationof $34.1 million, which includes the recognition of a $10.4 million credit-related impairment charge in 2025. This credit-related impairment charge was driven by the decrease in projected cash flows of Shorelight, wewhich would recognize an allowance to decreasereflects the carryingcurrent valuefederal ofregulatory theenvironment investment to the fair value,in which may be reversed in the event that the credit of Shorelight improves.operates. AsWe of December 31, 2024, we havedid not recognizedrecord any creditimpairment allowancecharges on our investment.convertible debt investment in 2024 and 2023. In the future, if there are additional adverse developments in Shorelight's business or the federal regulatory environment in which it operates that may be the result of events within or outside of Shorelight's control, we may incur additional impairment charges with respect to our convertible debt investment, which could materially impact our results of operations.

In 2019, we invested $5.0 million, in the form of preferred stock, in a hospital-at-home company. Since our initial investment, we have recognized cumulative unrealized gains of $28.6 million and cumulative unrealized losses of $26.3 million. Our investment is carried at its fair value of $7.4 million as of December 31, 2024, with unrealized holding gains and losses reported in our results of operations when an observable price change for preferred stock issued by the company with similar rights and preferences to our preferred stock investment occurs. As of December 31, 2024,2025, our preferred stock investment in the company is in a net unrealized gainloss position.position with a fair value of $2.4 million, which includes $5.0 million of impairment charges recognized in 2025 due to observable price changes as a result of the hospital-at-home company's merger with a third party. If there is significant deterioration in the earnings performance, credit rating, or business prospects of the consolidated company, or a significant adverse change in the regulatory, economic, or technological environment of the consolidated company, we would evaluate our investment for further impairment. If during such evaluation it was determined that the fair value of our investment was below its carrying value, we would recognize an additional unrealized loss for such difference, which could materially impact our results of operations.

We may choose to develop new service offeringsofferings, including managed services offerings, or eliminate service offerings because of market opportunities or client demands. Developing new service offerings involves inherent risks, including:

•unanticipated expenses to recruit and hire qualified consultantsprofessionals and to market our new service offerings; and

•political unrest, war, terrorism, geopolitical uncertainties, trade policies and sanctions, including the ongoing repercussions of the conflicts between Russia and Ukraine and Israelincreased andtensions Hamasin the Middle East; and

The overall tax environment remains uncertain and increasingly complex. Future changes in tax laws, treaties or regulations, and their interpretation or enforcement, may be unpredictable, particularly as taxing jurisdictions face an increasing number of political, budgetary and other fiscal challenges. In the U.S., various proposals to change corporate income taxes are periodically considered. Tax rates in the jurisdictions in which we operate may change as a result of macroeconomic and other factors outside of our control, making it increasingly difficult for multinational corporations like ourselves to operate with certainty about taxation in many jurisdictions. Additionally such political, budgetary or fiscal challenges may prompt governments to implement new taxes, tariffs or regulations, which could extend to services. As a result, we could be materially adversely affected by future changes in tax law or policy (or in their interpretation or enforcement) in the jurisdictions where we operate, including the United States, which could have a material adverse effect on our business, cash flow, results of operations, financial condition, as well as our effective income tax rate.

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; performance-based; 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.

•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. 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.recognized as revenue.

Selling, general and administrative expenses consistprimarily primarilyconsists 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 relatedoffice-related expenses, sales and marketing relatedmarketing-related expenses, recruiting and training expenses, and practice administration and meetingsmeeting expenses.

2024 litigation settlement gain: In the second quarter of 2024, we settled a litigation matter in which Huron was the plaintiff for $15.0 million, on a pre-tax basis. This $15.0 million settlement gain was recorded as a component of other gains, net on our consolidated statement of operations. 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.million. Our third-party legal expenses are recorded as a component of selling, general and administrative expenses on our statement of operations.

Other losses (gains), net: 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,losses (gains), net on our consolidated statement of operations.

Transaction-related expenses: To permit comparability with prior periods, weWe 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 preferredlong-term stockinvestments, investmentnet: 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 preferred stockequity investment in a hospital-at-home company arising from observable price changes or impairment losses.charges. These unrealized losses and gains are included as a component of other income (expense), net.net on our consolidated statement of operations. 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 salesales of businessbusinesses: 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. The 2024 gain relates to the divestiture of our Studer Education practice in the fourth quarter of 2024.

Income tax expense, interest expense, net of interest income, depreciation and amortization: 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 enterprise resource planning (ERP) system and other related software, which is included within selling, general and administrative expenses in our consolidated statements of operations.

•Diluted EPS increasedwas 96.6%$5.84 for 2025, compared to $6.27 for 2024,2024. comparedResults for 2025 include the non-cash impairment charge related to $3.19our convertible debt investment in a third-party, which had an unfavorable $0.43 impact on diluted earnings per share for 2023.the year. Results for 2024 include athe 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 2023.2024.

•Returned $122.2$166.2 million to shareholders by repurchasing 1,218,4341,166,077 shares of our common stock in 2024.2025.

Revenues before reimbursable expenses increased $124.0$176.8 million, or 9.1%,11.9%, to $1.66 billion for the year ended December 31, 2025 from $1.49 billion for the year ended December 31, 2024 from $1.36 billion for the year ended December 31, 2023.2024. The overall increase in revenues before reimbursable expenses reflects continued strength in demand for both our Consulting and Managed Services capabilitycapabilities andwithin all three of our segments, as well as continued strength in demand for our Digital capabilitycapabilities within our HealthcareCommercial and Education segments,segments. andThe reflectsincrease includes $86.0 million of incremental revenues before reimbursable expenses from our focusacquisitions oncompleted acceleratingsince growthDecember in31, our healthcare and education industries.2023. These increases in demand were partially offset by a decrease in demand for Commercial'sour Digital andcapability Consultingwithin our Healthcare segment. Excluding the $86.0 million of incremental revenues before reimbursable expenses from our acquisitions and Managed$13.7 Servicesmillion capabilities.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 10.5%13.1% to $976.9 million in 2025, compared to $863.9 million in 2024, compared to $782.0 million in 20232024; and reflected strengthened demand in all three of our Healthcaresegments. 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 Education segments, partially offset by a decrease in demand in our Commercial segment.Halpin. The utilization rate within our Consulting capability decreasedincreased to 75.7% in 2025, compared to 73.6% in 2024, compared to 76.6% in 2023.2024.

Revenues before reimbursable expenses within our Digital capability increased 7.3%10.2% to $686.0 million in 2025, compared to $622.2 million in 2024, compared to $580.0 million in 20232024; and reflected strengthened demand in our HealthcareCommercial and Education segments, partially offset by a decrease in demand in our CommercialHealthcare 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 76.0%78.2% in 2024,2025, compared to 75.3%76.0% in 2023.2024.

Our total number of revenue-generating professionals, excluding Managed Services professionals, increased 5.0%13.1% to 5,307 as of December 31, 2025, compared to 4,694 as of December 31, 2024, compared to 4,469 as of December 31, 2023, 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 45.7%46.3% to 2,239 as of December 31, 2025 from 1,530 as of December 31, 2024 from 1,050 as of December 31, 2023.2024. 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 increaseddecreased $54.1$11.6 million, or 86.7%,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 year ended December 31, 2024 from $62.5 million, or 4.5% 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, 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 increasedecrease in net incomeincome, and partially offset by a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan, diluted earnings per share increaseddecreased 96.6%6.9% to $5.84 for 2025, compared to $6.27 for 2024, compared to $3.19 for 2023.2024. Adjusted diluted earnings per share, which excludes the impact of the non-cash impairment charges in 2025 and the litigation settlement gain in 2024 and the non-cash impairment loss on our investment in 2023,2024, increased 31.8%21.0% to $7.83 for 2025 from $6.47 for 2024 from $4.91 for 2023.2024.

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

(3)We have separately presented the total number of revenue-generating professionals within our Managed Services capabilities of our Healthcare and Education segments. Our Healthcare Managed Services professionals provide revenue cycle billing, collections, insurance verification and change integrity services to clients. 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.

(7)The number of Managed Services professionals within our Healthcare segment was 1,420,2,117, 9241,420 and 715924 as of December 31, 2024,2025, 20232024 and 2022,2023, respectively.

Revenues before reimbursable expenses increased $124.0$176.8 million, or 9.1%,11.9%, to $1.66 billion for the year ended December 31, 2025 from $1.49 billion for the year ended December 31, 2024 from $1.36 billion for the year ended December 31, 2023.2024. The overall increase in revenues before reimbursable expenses reflects continued strength in demand for both our Consulting and Managed Services capabilitycapabilities andwithin all three of our segments, as well as continued strength in demand for our Digital capabilitycapabilities within our HealthcareCommercial and Education segments,segments. andThe reflectsincrease includes $86.0 million of incremental revenues before reimbursable expenses from our focusacquisitions oncompleted acceleratingsince growthDecember in31, the healthcare and education industries.2023. These increases in demand were partially offset by a decrease in demand for our Digital and Consulting and Managed Services capabilitiescapability within our CommercialHealthcare 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. Additional information on our revenues before reimbursable expense by segment follows.

•Healthcare revenues before reimbursable expenses increased $82.3$81.3 million, or 12.2%,10.7%, driven by continued strength in demand for our performance improvement, financial advisory, revenue cycle managed services, culture and organizational excellenceservices and strategy and innovation solutions within our Consulting and Managed Services capabilitycapability. 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. TheseThe increasesStuder Education business generated $13.7 million of revenues before reimbursable expenses in demand were partially offset by a decrease in demand for our financial and capital advisory solution within our Consulting and Managed Services capability.2024. Revenues before reimbursable expenses for the year ended December 31, 20242025 included $0.6$14.5 million of incremental revenues before reimbursable expenses from our acquisitionrecent acquisitions of RoundtableEclipse AnalyticsInsights, completedAXIA inConsulting Septemberand 2023.AXIOM.

The number of revenue-generating professionals within our Education segment,professionals, excluding Managed Services professionals, within our Healthcare segment grew 5.6%22.6% to 1,1411,493 as of December 31, 2024,2025, compared to 1,0801,218 as of December 31, 2023.2024. Our acquisitionacquisitions of GG+AEclipse Insights and AXIOM in March 20242025 added approximately 7075 revenue-generating professionals.

The number of revenue-generating professionalsprofessionals, excluding Managed Services professionals, within our CommercialEducation segment, the majority of which provide services across all of our industries,segment grew 3.2%0.4% to 2,3351,145 as of December 31, 2024,2025, compared to 2,2631,141 as of December 31, 2023, including our acquisition of AXIA Consulting in December 2024 which added approximately 130 revenue-generating professionals.2024.

Direct costs increased $67.4$112.4 million, or 7.1%,11.1%, to $1.12 billion for the year ended December 31, 2025 from $1.01 billion for the year ended December 31, 2024 from $942.7 million for the year ended December 31, 2023.2024. The $67.4$112.4 million increase primarily related to a $79.1$99.0 million increase in compensation costs for our revenue-generating professionalsprofessionals, an $8.7 million increase in contractor expenses, and a $4.0$3.0 million increase in technology costs, partially offset by a $14.4 million decrease in contractor expenses.costs. The $79.1$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 aan $76.7$87.2 million increase in salaries and related expenses driven by increasedthe headcountrecent 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 20242025, andas well as a $5.5$6.3 million increase in performance bonus expense; partially offset byexpense, a $2.8$4.4 million decreaseincrease 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, 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.professionals.

Selling, general and administrative expenses increased by $28.7$31.4 million, or 11.1%,10.9%, to $318.0 million for the year ended December 31, 2025 from $286.7 million for the year ended December 31, 2024 from $257.9 million for the year ended December 31, 2023.2024. The $28.7$31.4 million increase primarily related to aan $16.1$18.5 million increase in non-payroll costs,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 $5.9$7.3 million increase in software and data hosting expenses, a $3.3$4.3 million increase in practicethird-party administrationprofessional and meetings expenses,fees, a $2.7 million increase in bad debt expense, and a $1.3$2.6 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$1.5 million increase in salariesrecruiting andcosts, relateda expenses$1.4 million increase in business insurance costs, and a $1.2 million increase in performanceseverance bonusexpenses. expense;These increases to non-payroll costs were partially offset by a $1.6$2.1 million decrease in share-basedbad compensationdebt expense and a $1.2$1.5 million decrease in signing,legal retentionexpenses. The increase in third-party professional fees and otherbusiness bonusinsurance expense.costs were primarily driven by our programmatic acquisition activity. As a percentage of revenues before reimbursable expenses, selling, general and administrative expenses increaseddecreased to 19.1% during 2025, compared to 19.3% during 2024, compared to 18.9% during 2023.2024. This increasedecrease was primarily attributable to increasesrevenue growth that outpaced the increase 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 expensecosts for our support personnel.

Other Gains,Losses (Gains), Net

Other gains,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, 20242024. andThe $0.4$3.1 million of other losses, net for the year ended December 31, 2023.2025 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.

During 2023, we exited our office spaces in Hillsboro, Oregon and Lexington, Massachusetts, resulting in non-cash impairmentRestructuring charges offor $1.9the year ended December 31, 2025 were $9.1 million, compared to $9.9 million and $3.5 million, respectively, onfor the relatedyear right-of-useended operatingDecember lease31, assets2024. andThe fixed$9.1 assets.million Additionally,of restructuring charges incurredrecognized in 20232025 includedprimarily $3.0consisted of $3.8 million of severance-related expenses; $1.8$3.1 million forof rent and related expenses, net of sublease income, for our previously vacated office spaces; $0.9$1.4 million of accelerated depreciation and amortization on the related tofixed 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 chargescharge driven by updated sublease assumptions for a previously vacated office spaces; and $0.3 million related to the abandonment of a capitalized software development project.space.

Depreciation and amortization expense decreasedincreased $0.1$6.8 million, or 0.3%,27.4%, to $31.6 million for the year ended December 31, 2025, compared to $24.8 million for the year ended December 31, 2024,2024. comparedThe to $24.9$6.8 million for the year ended December 31, 2023. The $0.1 million decreaseincrease in depreciation and amortization expense was primarily attributable to a decreaseincreases in amortization of intangible assets,assets largely offset by an increaseacquired in amortizationbusiness ofacquisitions and internally developed software.

Operating income increased $43.5$9.8 million, or 5.8%, to $178.6 million tofor the year ended December 31, 2025 from $168.8 million for the year ended December 31, 2024 from $125.3 million for the year ended December 31, 2023.2024. Operating margin, which is defined as operating income expressed as a percentage of revenues before reimbursable expenses, increaseddecreased to 10.7% for 2025, compared to 11.4% for 2024, compared to 9.2% for 2023.2024.

•Healthcare operating income increased $36.0$46.7 million, or 20.8%,22.3%, primarily due to the increase in revenues before reimbursable expensesexpenses, as well as decreases in salaries and arelated decreaseexpenses infor contractorour support personnel, bad debt expense, and practice administration and meetings expenses; partially offset by increases in compensation costs for our revenue-generating professionals, practice administrationprofessionals 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 2024,2025, anas increasewell as increases in performance bonus expense, and an increase in share-based compensation expenses; partially offset by a decrease in signing, retention and other bonus expense, and share-based compensation expense. Healthcare operating margin increased to 27.6%30.5% from 25.7%27.6% primarily due to the decreasedecreases in contractorsalaries and related expenses; partiallyfor offsetour bysupport anpersonnel, increasebad indebt expense, and practice administration and meetings expenses, asand arevenue percentagegrowth ofthat revenuesoutpaced beforethe reimbursableincrease expenses.in salaries and related expenses for our revenue-generating professionals.

•Education operating income increased $9.4$4.7 million, or 9.5%,4.3%, 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 andpersonnel, amortization of capitalizedinternally softwaredeveloped developmentsoftware, 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 2024;2025, partially offset by decreasesa decrease 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%22.6% from 23.1%22.9% primarily driven by anthe 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,professionals as a percentage of revenues before reimbursable expenses; partially offset byand the decrease in performance bonus expense for our revenue-generating professionals.

•Commercial operating income decreasedincreased $3.0$4.7 million, or 5.5%,9.1%, primarily due to the decreaseincrease in revenues before reimbursable expensesexpenses, aspartially welloffset asby increases in compensation costs for our revenue-generating professionalsprofessionals, contractor expenses, salaries and software and data hostingrelated expenses; partiallyfor offsetour bysupport decreases in promotion and marketing expensespersonnel 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 20242025, and an increaseincreases in headcountperformance duebonus toexpense the acquisition of AXIA Consulting in the fourth quarter of 2024; partially offset by decreases inand signing, retention and other bonus expense and performance bonus expense for our revenue-generating professionals.expense. Commercial operating margin decreased to 20.0%17.2% from 21.0%20.0% primarily driven by the increaseincreases in salaries and related expenses for our revenue-generating professionals; partially offset by a decrease in promotion and marketingcontractor expenses, as a percentagepercentages of revenues before reimbursable expenses.expenses; partially offset by revenue growth that outpaced the increase in performance bonus expense for our revenue-generating professionals.

•Unallocated corporate expenses increased $16.0$26.4 million, or 9.1%,13.8%, primarily due to increases in compensation costs for our support personnel andpersonnel, 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 andheadcount, annual salary increases that went into effect in the first quarter of 20242025 and an increase in performance bonus expense; partially offset by decreases in share-baseddeferred compensation expense andattributable signing,to retentionthe change in the market value of our deferred compensation liability. The increases in third-party professional fees and otherbusiness bonusinsurance expense.costs were primarily driven by our programmatic acquisition activity.

Interest expense, net of interest income increased $5.8$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 from $19.6 million for the year ended December 31, 2023,2024, which was primarily attributable to higher levels of borrowing and higher interest rates under our Amendedsenior Creditsecured Facilitycredit facility in 20242025 compared to 2023.2024. 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 increasedtotaled $32.4expense of $9.3 million for the year ended December 31, 2025, compared to income of $10.5 million for the year ended December 31, 20242024. fromIn expense2025, we recognized pre-tax $10.4 million of $21.9non-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 yearmarket endedvalue Decemberof 31,our 2023.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 20242025 and 20232024 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.

•Accelerating Growth in Healthcare and Education: Huron holds leading market positions in healthcare and education, providing comprehensive offerings to the largest health systems, academic medical centers, colleges and universities, and research institutes in the United States and abroad. The Company will continue to broaden its portfolio of offerings in healthcare and education to drive even greater impact on current and new clients as the needs in those industries further evolve due to competitive, technological, regulatory, financial, and broader market changes.

•Growing Presence in Commercial Industries: Through its deep industry and capability expertise and nimble approach, Huron has grown its client base and expanded its credentials in the commercial industries. Huron’s commercial industry focusstrategy has increased the diversification of the Company’s portfolio and end markets while expanding the range of capabilities it can deliver to clients, providing new avenues for growth and an important balance to its healthcare and education focus.

Our Healthcare segment serves acute care providers, including national and regional health systems; academic health systems; community health systems; the federal health system; and public, children’s and critical access hospitals, and non-acute care providers, including physician practices and medical groups; payors; and long-term care or post-acute providers. Our healthcare-focused consulting and managed services offerings include financial and operational performance improvement consulting, which spans revenue cycle, business operations and care delivery transformation; organizational transformation; revenue cyclecycle, clinical and patient access managed services and outsourcing; financial and capital advisory consulting; and strategy consulting. Our healthcare-focused digital services span technology and analytic-related services, including core systems of record, such as enterprise health record (“EHR”), enterprise resource planning (“ERP”), enterprise performance management (“EPM”), and customer relationship management (“CRM”) systems; data management, artificial intelligence (“AI”) and automation; technology managed services; and payor core administration systems. We also have a portfolio of software products we deliver to the healthcare industry. In June 2025, we enhanced our consulting offerings through the acquisition of Eclipse Insights, a leading provider of revenue cycle solutions. In November 2025, we acquired the consulting services division of AXIOM to strengthen our digital-focused payor offerings. In June 2026, we strengthened our managed services offerings through the acquisition of RelateCare, a leading provider of AI-enabled clinical and patient access solutions.

Our Commercial segment is focused on serving industries and organizations facing significant disruption and regulatory change by helping them adapt to rapidly changing environments and accelerate business transformation. Our Commercial professionals work primarily with seven primary buyers: the chief executive officer, the chief financial officer, the chief strategy officer, the chief human resources officer, the chief operating officer, the chief risk officer, and organizational advisors, including lenders and law firms. We have a deep focus on serving organizations in the financial services, industrials and manufacturing, and energy and utilities industries and the public sector while opportunistically serving commercial industries more broadly, including professional and business services, life sciences, consumer products, and retail. Our Commercial professionals use their deep industry, functional and technical expertise to deliver our digital services and software products,services, financial and capital advisory (special situation advisory and corporate finance advisory) consulting services, regulatory compliance and risk management consulting and managed services, strategy and operations consulting services, and financial and operational performance improvement consulting services. In the third quarter of 2025, we bolstered our Commercial consulting offerings through the acquisitions of Treliant, a global financial services consulting and managed services firm, and WP&C, a leading strategy and operations consulting firm specializing in driving operational efficiency and improved growth and profitability.

Our Consulting and Managed Services capabilities represent our management consulting services, managed services (excluding technology-related managed services) and outsourcing services delivered across industries. Our Consulting and Managed Services experts help our clients address a variety of strategic, operational, financial, people and organizational-related challenges. These services are often combined with technology, analytic, and data- and AI-driven solutions powered by our Digital capability to support long-term relationships with our clients and drive lasting impact. Examples include the areas of revenue cyclecycle, managementclinical and patient access and research administration managed services and outsourcing at our healthcare, education and research-focused clients, where our projects are often coupled with our digital services and product offerings and management consulting services to sustain improved performance.

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-cashchanges credit-relatedto impairmentthe chargescredit allowance recognized on our convertible debt investment in Shorelighta Holdings,third-party LLCas andwell as 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.

Our revenue-generating professionals consist of our full-time consultants who generate revenues based on the number of hours worked; full-time equivalents, which consists of coaches and their support staff within the culture and organizational excellence solution, consultants who work variable schedules as needed by clients, and full-time employees who provide software support and maintenance services to clients; and our Managed Services professionals who provide revenue cyclecycle, managementclinical and patient access managed services, research administration managed services and outsourcing at our healthcare, education and research-focused clients.

Highlights from the firstsecond quarter of 2026 include the following:

•Revenues before reimbursable expenses (RBR) increased $48.0$63.1 million, or 12.1%,15.7%, to $443.7$465.6 million for the firstsecond quarter of 2026 from $395.7$402.5 million for the firstsecond quarter of 2025.

•Net income as a percentage of total revenues wasincreased 5.1%to 6.6% for the firstsecond quarter of 2026, compared to 6.1%4.7% for the firstsecond quarter of 2025. Results for the second quarter of 2025 include an $8.2 million non-cash credit-related impairment charge, net of tax, related to our convertible debt investment in a third-party.

•Adjusted EBITDA as a percentage of RBR increased to 11.4%15.6% for the firstsecond quarter of 2026, compared to 10.5%15.1% for the firstsecond quarter of 2025.

•Adjusted diluted EPS increased 3.0%30.2% to $1.73$2.46 for the firstsecond quarter of 2026, compared to $1.68$1.89 for the firstsecond quarter of 2025.

•Returned $155.5$53.1 million to shareholders in the firstsecond three monthsquarter of 2026 by repurchasing 1,114,806438,456 shares of our common stock.

RBR increased $48.0$63.1 million, or 12.1%,15.7%, to $443.7$465.6 million for the firstsecond quarter of 2026 from $395.7$402.5 million for the firstsecond quarter of 2025. TheThis overall increase in RBRgrowth reflects continued strength in demand foracross all three of our operating segments and across both the Consulting and Managed Services capabilities within our Healthcare and CommercialDigital segments.capabilities. The increase includes $19.3$19.5 million of incremental RBR from our acquisitions completed since DecemberMarch 31, 2024.2025. Excluding the $19.3$19.5 million of incremental RBR from our acquisitions, RBR grew 7.3%10.8% organically.

RBR within our Consulting and Managed Services capability increased $47.7$46.8 million, or 21.3%,20.4%, in the firstsecond quarter of 2026 to $271.6$275.9 million, compared to $223.9$229.1 million in the firstsecond quarter of 2025; and reflected strengthened demand in our Healthcare and Commercial segments. The increase includes $17.5 million of incremental RBR from our acquisitions of Treliant, Eclipse Insights, WP&C, AdvancementRelateCare, Resources,Treliant, and Halpin.Eclipse Insights. The utilization rate within our Consulting capability increased to 74.6%81.3% in the firstsecond quarter of 2026, compared to 74.1%77.0% in the firstsecond quarter of 2025.

RBR within our Digital capability increased $0.3$16.3 million, or 0.2%,9.4%, in the firstsecond quarter of 2026 to $172.1$189.7 million, compared to $171.8$173.4 million in the firstsecond quarter of 2025; and reflected an increase in RBR in our Education segment, partially offset by a decrease in RBR in our Commercial and Healthcare segments. The increase includes $1.7$1.9 million of incremental RBR from our acquisition of AXIOM. The utilization rate within our Digital capability decreasedincreased to 74.8%81.8% in the firstsecond quarter of 2026, compared to 78.2%77.8% in the firstsecond quarter of 2025.

Our total number of revenue-generating professionals, excluding Managed Services professionals, increased 12.6%7.0% to 5,3465,335 as of MarchJune 31,30, 2026, compared to 4,7484,986 as of MarchJune 31,30, 2025, as a result of the acquisitions completed since the firstsecond quarter of 2025 and hiring to support the overall increase in demand for our services. The number of Managed Services professionals increased 59.5% to 2,6433,913 as of MarchJune 31,30, 2026 from 1,6571,895 as of MarchJune 31,30, 2025,2025. asThis aincrease resultincludes our acquisition of hiring to support the increaseRelateCare in demandJune for2026, ourwhich services.added approximately 1,100 Managed Services professionals. 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 decreasedincreased $1.3$11.8 million, or 5.3%,60.8%, to $23.2$31.2 million, or 5.1% of total revenues,million for the firstthree quartermonths ofended June 30, 2026 comparedfrom to$19.4 $24.5 million, or 6.1% of total revenues,million for the same period last year. NetThe incomesecond quarter of 2025 includes the $8.2 million non-cash credit-related impairment charge, net of tax, related to our convertible debt investment in a third-party. Diluted earnings per share for the firstsecond quarter of 2026 includesincreased $3.8 million of income tax expense, compared75.2% to an$1.91 incomefrom tax benefit of $3.1 million recorded$1.09 for the firstsecond quarter of 2025.2025 Asdriven aby resultthe ofincrease in net income as well as a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan,plan. partiallyThe offsetnon-cash bycredit-related impairment charge on our convertible debt investment recognized in the decrease in net income, diluted earnings per share for the firstsecond quarter of 2026 increased to $1.34 from $1.33 for the first quarter of 2025. The income tax expense in the first quarter of 20262025 had an unfavorable $0.22$0.46 impact on diluted EPS in the prior year period. Adjusted diluted earnings per share, whilewhich excludes the incomeimpact taxof benefitthe non-cash impairment charge in the first quarter of 2025 had a favorable $0.17 impact on diluted earnings per share. Adjusted diluted earnings per share2025, increased 3.0%30.2% to $1.73$2.46 for the firstsecond quarter of 2026, compared to $1.68$1.89 for the firstsecond quarter of 2025.

Adjusted EBITDA increased $9.1$12.1 million, or 21.9%,19.9%, to $50.6$72.6 million, or 11.4%15.6% of RBR, for the firstsecond quarter of 2026, compared to $41.5$60.6 million, or 10.5%15.1% of RBR, for the same period last year.

In the firstsecond three monthsquarter of 2026, we deployed $155.5$53.1 million of capital to repurchase 1,114,806438,456 shares of our common stock, representing 6.5%2.5% of our common stock outstanding as of December 31, 2025.

The number of revenue-generating professionals within this offering as of December 31, 2024, March 31, 2025, June 30, 2025, September 30, 2025 and December 31, 2025 was 23, 22, 23, 21 and 21, respectively. The prior period headcount reported by segment and by capability in the table above has been revised for consistent presentation. The prior period Education Managed Services capability headcount in footnote (5) below has been revised for consistent presentation.

RBR generated by this offering during the quarters ended March 31, 2025, June 30, 2025, September 30, 2025, and December 31, 2025 was $1.8 million, $1.4 million, $1.8 million, and $1.6 million, respectively, and during the years ended December 31, 2024 and 2025 was $7.3 million and $6.6 million, respectively. This reclassification did not impact the total Education Consulting and Managed Services RBR reported for any period, and the prior period Education Managed Services capability RBR in footnote (6) below has been revised for consistent presentation.

(5) We have separately presented the total number of revenue-generating professionals within our Managed Services capabilities of our Healthcare and Education segments. Our Healthcare Managed Services professionals provide revenue cyclecycle, billing, collections, insurance verificationclinical and changepatient integrityaccess services tofrom clients.patient scheduling and clinical triage through billing and collections. Our Education Managed Services professionals provide research administration managed services and outsourcing at our education and research-focused clients.

The number of Managed Services professionals within our Healthcare segment was 2,5373,794 and 1,5681,807 as of MarchJune 31,30, 2026 and 2025, respectively. This increase includes our acquisition of RelateCare in the second quarter of 2026, which added approximately 1,100 Managed Services professionals.

The number of Managed Services professionals within our Education segment was 106119 and 8988 as of MarchJune 31,30, 2026 and 2025, respectively.

(6) Managed Services capability RBR within our Healthcare segment was $26.1$34.4 million and $18.3$21.0 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively; and $60.5 million and $39.3 million for the six months ended June 30, 2026 and 2025, respectively.

Managed Services capability RBR within our Education segment was $5.8$6.9 million and $5.6$6.0 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively; and $12.8 million and $11.5 million for the six months ended June 30, 2026 and 2025, respectively.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Revenues before reimbursable expenses (RBR) by segment and capability for the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

RBR increased $48.0$63.1 million, or 12.1%,15.7%, to $443.7$465.6 million for the firstsecond quarter of 2026 from $395.7$402.5 million for the firstsecond quarter of 2025. TheThis overall increase in RBRgrowth reflects continued strength in demand foracross all three of our operating segments and across both the Consulting and Managed Services capabilities within our Healthcare and CommercialDigital segments.capabilities. The increase includes $19.3$19.5 million of incremental RBR from our acquisitions completed since DecemberMarch 31, 2024.2025. Excluding the $19.3$19.5 million of incremental RBR from our acquisitions, RBR grew 7.3%10.8% organically. Additional information on our RBR by segment follows.

•Healthcare RBR increased $26.7$34.5 million, or 13.5%,17.4%, driven by strengthened demand for our performance improvement, revenue cycleHealthcare managed services, financialperformance advisory,improvement, strategy, and strategyfinancial advisory solutions within our Consulting and Managed Services capability;capability, partiallyas offsetwell byas decreasesstrengthened in RBRdemand for our technology and analytics services andwithin our Digital capability; partially offset by a decrease in RBR from our software products within our Digital capability. RBR in the firstsecond quarter of 2026 included $7.3$10.1 million of incremental RBR from our acquisitions of RelateCare, Eclipse InsightsInsights, and AXIOM.

The number of revenue-generating professionals, excluding Managed Services professionals, within our Healthcare segment grew 24.4%17.2% to 1,7001,738 as of MarchJune 31,30, 2026, compared to 1,3671,483 as of MarchJune 31,30, 2025. Our acquisitionsacquisition of Eclipse Insights and AXIOM in 2025 added approximately 7540 revenue-generating professionals in 2025. The number of Managed Services revenue-generating professionals within our Healthcare segment grew to 3,794 as of June 30, 2026 from 1,807 as of June 30, 2025. This increase includes our acquisition of RelateCare in the second quarter of 2026, which added approximately 1,100 Managed Services professionals.

•Education RBR increased $4.7$10.1 million, or 3.8%,7.8%, driven by strengthened demand for our technology and analytics services and software products within our Digital capability; partially offset by a decrease in RBR forfrom our education and research consulting solution within our Consulting and Managed Services.Services RBR in the first quarter of 2026 included $1.0 million of incremental RBR from our acquisitions of Advancement Resources and Halpin.capability.

The number of revenue-generating professionals within our Education segment, excluding Managed Services professionals, decreased 6.1%10.2% to 1,1171,070 as of MarchJune 31,30, 2026, compared to 1,1891,192 as of MarchJune 31,30, 2025.

•Commercial RBR increased $16.6$18.6 million, or 22.3%,24.6%, which reflects $11.0$9.2 million of incremental RBR from our acquisitions of Treliant and WP&C and strengthened demand for our financial advisory solution within our Consulting and Managed Services capability; partially offset by a decrease in RBR forfrom our technology and analytics services within our Digital capability.

The number of revenue-generating professionals within our Commercial segment, the majority of which provide services across all of our industries, grew 15.4%9.3% to 2,5292,527 as of MarchJune 31,30, 2026, compared to 2,1922,311 as of MarchJune 31,30, 2025. Our acquisitions of Treliant and WP&C in 2025 added approximately 210 revenue-generating professionals.

Operating expenses for the firstsecond quarter of 2026 increased $43.8$58.7 million, or 11.8%,16.0%, over the firstsecond quarter of 2025.

Direct costs increased $30.2$42.2 million, or 10.8%,15.7%, to $308.2$311.2 million for the firstsecond quarter of 2026 from $278.0$269.0 million for the firstsecond quarter of 2025. The $30.2$42.2 million increase primarily related to a $30.0$41.5 million increase in compensation costs for our revenue-generating professionals and a $1.5 million increase in technology costs; partially offset by a $1.5 million decrease in contractor expenses.professionals. The increase in compensation costs reflects our investment to grow our talented team to meet increased market demand and is primarily attributable to a $29.6$30.9 million increase in salaries and related expenses, driven by 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 2026, and2026; a $1.3$9.0 million increase in performance bonus expense; partially offset byand a $1.4$1.1 million decreaseincrease in share-based compensation expense. As a percentage of RBR, directDirects costs decreased to 69.5% during the first quarter of 2026, compared to 70.3% during the first quarter of 2025. This decrease was primarily due to revenue growth that outpaced the increase in performance bonus expense for our revenue-generating professionals and the decreases in share-based compensation expense and contractor expenses; partially offset by an increase in salaries and related expenses for our revenue-generating professionals, as a percentage of RBR.RBR was 66.8% for both the second quarter of 2026 and 2025.

Selling, general and administrative expenses increased by $8.1$9.6 million, or 10.5%,11.9%, to $84.7$89.8 million in the firstsecond quarter of 2026 from $76.6$80.2 million in the firstsecond quarter of 2025. The $8.1$9.6 million increase primarily related to a $6.3 million increase in non-payroll costs and a $1.7$7.1 million increase in compensation costs for our support personnel.personnel Theand $6.3a $2.4 million increase in non-payroll costs was primarily driven by a $2.3 million increase in software and data hosting expenses and a $2.2 million increase in practice administration and meetings expenses.costs. The $1.7$7.1 million increase in compensation costs for our support personnel was primarily driven by a $1.2$2.4 million increase in deferred compensation expense attributable to the change in market value of our deferred compensation liability, a $2.4 million increase in salaries and related expensesexpenses, a $1.4 million increase in performance bonus expense, and a $1.0$0.9 million increase in share-based compensation. The increase in deferred compensation expense.expense is offset by an increase in the gain recognized for the change in the market value of investments that are used to fund our deferred compensation liability and recognized in other income (expense), net. The $2.4 million increase in non-payroll costs was primarily driven by a $2.1 million increase in software and data hosting expenses. As a percentage of RBR, selling, general and administrative expenses decreased to 19.1%19.3% during the firstsecond quarter of 2026, compared to 19.4%19.9% during the firstsecond quarter of 2025, which was primarily due to revenue growth that outpaced the increase in compensationsalaries costsand related expenses for our support personnel; partially offset by increases in practice administration meeting expenses and software and data hosting expenses, as percentages of RBR.personnel.

Other Losses (Gains)

Other losses (gains) totaled $3.8a loss of $3.9 million in the firstsecond quarter of 2026 andcompared to a gain of $0.1 million in the second quarter of 2025. The $3.9 million of other losses in the second quarter of 2026 consisted of remeasurement losses to increase the fair value of our contingent consideration liabilities related to business combinations. ThereThe were$0.1 nomillion of other losses or gains recognized in the firstsecond quarter of 2025.2025 consisted of a remeasurement gain to decrease the fair value of a contingent consideration liability related to a business combination.

Restructuring charges for the firstsecond quarter of 2026 were $0.7$0.4 million, compared to $1.3$0.6 million for the firstsecond quarter of 2025. The $0.7$0.4 million of restructuring charges recognized in the firstsecond quarter of 2026 included $3.4 million of severance-related expenses and $1.0$0.7 million of rent and related expenses, net of sublease income, for our previously vacated office spaces, largelypartially offset by a $3.8$0.2 million non-cash gain on lease modification.modification Inon our office space in Hillsboro, Oregon. The $0.6 million of restructuring charges recognized in the firstsecond quarter of 2026,2025 weprimarily enteredconsisted intoof therent Seventhand Amendmentrelated toexpenses, thenet officeof leasesublease agreementincome, for our principal executive offices in Chicago, Illinois, which, among other items, provides for the early termination of the lease with respect to certain leased spaces previously vacated.vacated Seeoffice Note 14 “Commitments, Contingencies and Guarantees” within the notes to our consolidated financial statement for additional information on the Seventh Amendment.spaces.

Depreciation and amortization expense increased $2.8$3.0 million, or 39.9%,42.6%, to $9.7$10.1 million in the firstsecond quarter of 2026, compared to $6.9$7.1 million in the firstsecond quarter of 2025. The $2.8$3.0 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 increased $3.9$4.6 million, or 11.8%,10.1%, to $36.6$50.2 million in the firstsecond quarter of 2026 from $32.7$45.7 million in the firstsecond quarter of 2025. Operating margin, which is defined as operating income expressed as a percentage of revenues before reimbursable expenses (RBR) was 8.2%10.8% for the three months ended MarchJune 31,30, 2026, compared to 8.3%11.3% for the three months ended MarchJune 31,30, 2025.

•Healthcare operating income increased $7.6$10.3 million, or 13.6%,17.2%, primarily due to the increase in RBR, as well as a decrease in salaries and related expenses for our support personnel; partially offset by increases in compensation costs for our revenue-generating professionals and practice administration meetingscontractor expenses. The increase in compensation costs for our revenue-generating professionals was drivenprimarily bydue to an increase in headcountheadcount, partially driven by our acquisition of RelateCare, and annual salary increases that went into effect in the first quarter of 2026.2026, as well as an increase in performance bonus expense. Healthcare operating margin wasremained 28.4%relatively forflat bothat 30.1% in the firstsecond quarter of 20262026, andcompared to 30.2% in the second quarter of 2025.

•Education operating income increased $4.5$5.1 million, or 19.6%,15.7%, primarily due to the increase in RBR, as well as decreases in practice administration and meeting expenses and compensation costs for our revenue-generating professionalsRBR; partially offset by an increase in technologycompensation costs.costs for our revenue-generating professionals. The decreaseincrease in compensation costs for our revenue-generating professionals was primarily driven by decreasesan increase in share-based compensation expense and performance bonus expense; largelyas offsetwell byas annual salary increases that went into effect in the first quarter of 2026. Education operating margin increased to 21.6%26.8% from 18.8%25.0% primarily driven by revenue growth that outpaced the decreasesincrease in compensationsalaries costsand related expenses for our revenue-generating professionals and practicea administrationdecrease in project costs; partially offset by the increases in performance bonus expense, amortization of internally developed software, and meetingsshare-based expenses.compensation expense for our revenue-generating professionals, as percentages of RBR.

•Commercial operating income increased $3.6$7.2 million, or 31.9%,57.9%, primarily due to the increase in RBRRBR, as well a decrease in contractor expenses; partially offset by an increase in compensation costs for our revenue-generating professionals. The increase in compensation costs for our revenue-generating professionals was primarily due to an increase in headcount, driven by our acquisitions of Treliant and WP&C, annual salary increases that went into effect in the first quarter of 2026, and an increaseincreases in performance bonus expense and share-based compensation expense. Commercial operating margin increased to 16.4%21.0% from 15.2%16.6% primarily duedriven toby decreases in contractor expenses and salaries and related expenses for our support personnel, as well as revenue growth that outpaced the increase in performancesalaries bonusand expenserelated expenses for our revenue-generating professionals; partially offset by an increaseincreases in salariesperformance bonus expense and relatedshare-based expensescompensation expense for our revenue-generating professionals, as a percentagepercentages of RBR.

•Unallocated corporate expenses increased $7.7$11.1 million, or 14.6%,20.4%, primarily due to increases in compensation costs for our support personnel and software and data hosting expenses. The increasesincrease 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 2026,2026 and an increase in share-baseddeferred compensation expense attributable to the change in the market value of our deferred compensation liability, and an increase in performance bonus expense.

Interest expense, net of interest income increased $3.2$2.7 million to $8.9$11.9 million in the firstsecond quarter of 2026 from $5.6$9.3 million in the firstsecond quarter of 2025, which was primarily attributable to higher levels of borrowing under our senior secured credit facility during the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025. See “Liquidity and Capital Resources” below and Note 8 “Financing Arrangements” within the notes to our consolidated financial statements for additional information about our senior secured credit facility.

Other expense,income (expense), net totaled $0.6income of $4.6 million in the firstsecond quarter of 2026, compared to $5.6expense of $8.7 million in the firstsecond quarter of 2025. In the firstsecond quarter of 2026, we recognized a $1.3$5.8 million lossgain foron the market value of our investments that are used to fund our deferred compensation liability,liability whichand wasa $1.1 million gain resulting from a reduction to the credit allowance recognized on our convertible debt investment in a third-party. These gains were partially offset by $0.3a non-cash impairment charge of $2.2 million on our equity investment in a hospital-at-home company and $0.1 million of foreign currency transaction gains and a $0.3 million gain related to the divestiture of a business within our Commercial segment.losses. In the firstsecond quarter of 2025, we recognized a pre-tax $11.1 million non-cash credit-related impairment charge related to our convertible debt investment in a third-party, a non-cash impairment losscharge of $4.2$0.8 million on our equity investment in a hospital-at-home company, aand $1.1$0.2 million lossof forforeign currency transaction losses. These losses were offset by a $3.5 million gain on the market value of our investments that are used to fund our deferred compensation liability, and $0.4 million of foreign currency transaction losses.liability. The change in the market value of our investments that are used to fund our deferred compensation liability are offset with deferred compensation expense which is recognized as a component of selling, general and administrative expenses on our consolidated statements of operations.

See Note 10 “Derivative Instruments and Hedging Activity” within the notes to our consolidated financial statements for additional information on our foreign exchange forward contracts and Note 11 “Fair Value of Financial Instruments” within the notes to our consolidated financial statements for additional information on our convertible debt and equity investment.investments.

For the three months ended MarchJune 31,30, 2026, our effective tax rate was 14.1%27.2% as we recognized income tax expense of $3.8$11.7 million on income of $27.1$42.9 million. The effective tax rate of 14.1%27.2% was moreless favorable than the statutory rate, inclusive of state income taxes, of 25.9%,26.0%, primarily due to acertain discretenondeductible expense items and the inability to recognize tax benefitbenefits forrelated share-basedto compensationcertain awardsforeign thatand vestedcapital during the quarter. This favorable item waslosses, partially offset by certaina nondeductibletax expenses.benefit related to non-taxable gains on our investments used to fund our deferred compensation liability.

For the three months ended MarchJune 31,30, 2025, our effective tax rate was (14.4)%29.9% as we recognized income tax benefitexpense of $3.1$8.3 million on income of $21.5$27.7 million. The effective tax rate of (14.4)%29.9% was moreless favorable than the statutory rate, inclusive of state income taxes, of 25.9%,26.0%, primarily due to the establishment of a discretevaluation allowance for a deferred tax benefitasset forrecorded share-based compensation awards that vested duringas the quarter.result Thisof favorablethe itemcapital wasloss on our investment in a hospital-at-home company as well as certain nondeductible expense items, partially offset by certaina nondeductibletax expenses.benefit related to non-taxable gains on our investments used to fund our deferred compensation liability.

Net income decreasedincreased $1.3$11.8 million, or 5.3%,60.8%, to $23.2$31.2 million for the three months ended MarchJune 31,30, 2026 from $24.5$19.4 million for the same period last year. NetThe incomesecond quarter of 2025 includes the $8.2 million non-cash credit-related impairment charge, net of tax, related to our convertible debt investment in a third-party. Diluted earnings per share for the firstsecond quarter of 2026 includes $3.8 million of income tax expense, comparedincreased to an$1.91 incomefrom tax benefit of $3.1 million recorded$1.09 for the firstsecond quarter of 2025.2025 Asdriven aby resultthe ofincrease in net income as well as a reduction in diluted shares outstanding resulting from share repurchases made under our share repurchase plan, partially offset by the decrease in net income, diluted earnings per share for the first quarter of 2026 increased to $1.34 from $1.33 for the first quarter of 2025.plan. The incomenon-cash taxcredit-related expenseimpairment charge on our convertible debt investment recognized in the first quarter of 2026 had an unfavorable $0.22 impact on diluted earnings per share, while the income tax benefit in the firstsecond quarter of 2025 had aan favorableunfavorable $0.17$0.46 impact on diluted earningsEPS perin share.the prior year period.

EBITDA increased $11.7$20.9 million, or 34.1%,47.3%, to $45.9$65.3 million for the firstsecond quarter of 2026 from $34.2$44.3 million for the firstsecond quarter of 2025. The increase in EBITDA was primarily attributable to the increase in segment operating income for all three of our segments, excluding segment depreciation and amortizationamortization, and the absence of the prior year $4.2$11.1 million non-cash credit-related impairment losscharge recognized in the second quarter of 2025 related to our equityconvertible debt investment in a hospital-at-home company recognized in the first quarter of 2025third-party; partially offset by the increase in unallocated corporate expenses, excluding the impact of the change in the market value of our deferred compensation liability, and the $3.8$3.9 million of remeasurement losses to increase the fair value of our contingent consideration liabilities related to business combinations recognized in the first quarter of 2026.

Adjusted EBITDA increased $9.1$12.1 million, or 21.9%,19.9%, to $50.6$72.6 million in the firstsecond quarter of 2026 from $41.5$60.6 million in the firstsecond quarter of 2025. The increase in adjusted EBITDA was primarily attributable to the increase in segment operating income for all three of our segments, excluding segment depreciation and amortization and segment restructuring charges; partially offset by the increase in unallocated corporate expenses, excluding the impact of the change in the market value of our deferred compensation liability and transaction-related expenses.

Adjusted net income decreasedincreased $1.1$6.6 million, or 3.4%,19.5%, to $30.0$40.2 million in the firstsecond quarter of 2026, compared to $31.1$33.7 million in the firstsecond quarter of 2025. 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, partially offset by the decrease in adjusted net income, adjusted diluted earnings per share increased to $1.73$2.46 for the firstsecond quarter of 2026 compared to $1.68$1.89 for the firstsecond quarter of 2025.