Earning Date, Transcript Summary & Report

Strong Revenue Performance: Record revenues before reimbursable expenses (RBR) in Q4 2024, reflecting strong performance across all segments.

Consistent RBR Growth: Achieved 9% RBR growth in 2024, building on 20% growth in 2023, marking the fourth consecutive year of high single-digit or better growth.

EBITDA Margin Expansion: Increased adjusted EBITDA margin for the fourth consecutive year, demonstrating effective margin expansion strategies.

Record Cash Flow Achievement: Generated record cash flow from operations of $201 million in 2024, leading to record free cash flow of $168 million.

Shareholder Returns and Stock Growth: Returned over $122 million to shareholders through share repurchases, contributing to a 21% increase in stock price in 2024.

Healthcare Segment Growth: Healthcare segment RBR grew 18% in Q4 2024 and 12% for the full year, achieving record RBR of $756 million, driven by strong demand across various offerings.

Education Segment Growth: Education segment RBR increased 15% in Q4 2024 and 10% for the full year, achieving record RBR of $474 million, bolstered by the acquisition of GG+A.

Commercial Segment Growth: Commercial segment RBR grew 6% in Q4 2024, driven by the addition of AXIA Consulting and demand for financial advisory services, despite a slight decline for the full year.

Employee Growth and Collaboration: Strong employee growth with nearly 270 managing directors and over 7,200 professionals globally, contributing to a collaborative culture recognized as a competitive advantage.

2025 Revenue and EBITDA Outlook: Expectations for 2025 include RBR guidance of $1.58 billion to $1.66 billion, with projected adjusted EBITDA margin improvement and continued revenue growth across segments.

Healthcare Margin Pressure: Increased pressure on healthcare provider margins due to rising labor and supply costs that outpace revenue growth, which may continue into 2025.

Healthcare Sector Disruptions: Potential disruptions in the healthcare sector from changes in clinical reimbursement models and federal funding levels, which could impact financial sustainability for many organizations.

Regulatory Challenges in Education: Higher education institutions are facing a highly disruptive regulatory environment, including anticipated reductions in federal research funding, which could significantly impact their financial positions.

Commercial Segment Decline: The Commercial segment experienced a decline in full-year RBR by 1%, indicating reduced demand for strategy and innovation offerings, which may reflect broader economic uncertainties.

Commercial Segment Margin Decline: Operating income margin for the Commercial segment decreased to 20% in 2024 from 21% in 2023, primarily due to increased compensation expenses, indicating rising operational costs.

Rising Corporate Expenses: Unallocated corporate expenses increased significantly, driven by higher compensation costs and software expenses, which could impact overall profitability.

Tax Rate Challenges: The effective tax rate for Q4 2024 was less favorable than the statutory rate, indicating potential tax-related challenges for the company.