Professional services firm Huron Consulting Group (NASDAQ: HURN) announced better-than-expected revenue in Q3 CY2025, with sales up 16.7% year on year to $441.3 million. The company expects the full year’s revenue to be around $1.66 billion, close to analysts’ estimates. Its non-GAAP profit of $2.10 per share was 12.3% above analysts’ consensus estimates.

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StockStory’s Take

Huron’s Q3 results reflected robust demand across all three operating segments, with particular strength attributed to strong performance improvement offerings in Healthcare and continued momentum in Education and Commercial. CEO Mark Hussey credited broad-based client demand and successful integration of recent acquisitions as key drivers, stating, “This is perhaps the strongest market that we’ve ever seen,” and highlighting the company’s ability to deliver tangible results for clients navigating financial and regulatory pressures.

Looking ahead, management expects continued growth driven by a strong sales pipeline, increased integration of AI and automation across consulting and managed services, and ongoing demand for digital transformation in core end markets. CFO John Kelly emphasized the company’s positioning to support clients through evolving technology and regulatory changes, noting, “We have seen increased demand over the past couple of quarters,” and that Huron’s digital fluency and track record in performance improvement will support its multiyear growth framework.

Key Insights from Management’s Remarks

Management linked Q3 financial momentum to expansion in healthcare consulting, digital transformation, and targeted acquisitions, while also outlining how AI adoption and operational investments are shaping future results.

• Healthcare segment acceleration: Healthcare consulting and managed services saw strong demand, with performance improvement projects benefiting from industry-wide margin pressures and increased need for operational transformation among provider clients. Management noted a shift to larger, more integrated engagements combining strategy, financial advisory, and digital solutions.

• AI and automation integration: Huron expanded the use of AI and automation in both client offerings and internal processes, particularly within revenue cycle managed services and research administration, which helped lower costs and improve outcomes for clients.

• Strong education demand: The Education segment experienced stable growth, fueled by institutions seeking digital modernization and efficiency amid declining enrollments and funding. Projects focused on core ERP (Enterprise Resource Planning) implementation and foundational technology upgrades to enable future AI adoption.

• Commercial segment inflection: Commercial revenue growth was supported by recent acquisitions (AXIA, Treliant, Wilson Perumal) and improved demand for digital and financial advisory services. Management observed an inflection point in strategy and restructuring demand, especially in the second half of Q3.

• Talent and capacity investments: Significant headcount additions in Healthcare and Managed Services were made to meet rising demand, particularly in India, supporting both immediate project delivery and preparation for sustained growth into next year.

Drivers of Future Performance

Huron’s forward outlook is anchored in sustained demand for transformation services, deeper AI integration, and ongoing investments in talent and technology.

• Pipeline and AI-driven offerings: Management expects robust sales pipelines, especially in Healthcare and Education, to fuel future growth, with broader adoption of AI and automation in client projects and internal delivery seen as a catalyst for efficiency and value creation.

• Operational investments and utilization: Continued hiring to support project ramps may temporarily impact consulting utilization rates, but the company anticipates utilization rebounding as new projects launch, contributing to margin expansion over the longer term.

• Segment-specific headwinds and opportunities: Healthcare faces ongoing reimbursement and workforce challenges, while Education and Commercial segments are expected to benefit from digital transformation trends and increased demand for performance-based and technology-enabled consulting services. Management also identified performance-based fee arrangements as a potential margin lever in Healthcare for next year.

Catalysts in Upcoming Quarters

Looking forward, the StockStory team will watch (1) whether Healthcare’s performance improvement and managed services momentum can be sustained in the face of industry margin pressures, (2) how effectively Huron integrates AI and automation into both client-facing and internal processes, and (3) the pace of digital transformation projects and core system upgrades in Education and Commercial. Progress on talent deployment and margin recovery will also be critical indicators.

Huron currently trades at $152.48, in line with $152.83 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).

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