Oct 14 2026 09:47 PM EST

Huron Consulting Raises FY 2026 Outlook as AI‑Enabled Services Fuel Revenue Surge

Huron Consulting Group (NASDAQ: HURN) posted a 15.7% rise in Q2 2026 revenue before reimbursable expenses (RBR) to $465.6 million, beating the consensus estimate of $449.0 million. The earnings beat, coupled with an upgraded FY 2026 outlook, lifted the stock by roughly 12% over the past five trading days, bringing the price to $175.25 as of Oct 14, 2026.

Adjusted earnings per share climbed to $2.46 versus the consensus of $2.17, a 13.4% beat. Net income surged 60.8% YoY to $31.2 million, while adjusted EBITDA rose 19.9% to $72.6 million, pushing the EBITDA margin to 15.6% of RBR, up 50 basis points.

Guidance Raised on Strong Organic Momentum

Management lifted its FY 2026 RBR target to a range of $1.85 billion–$1.89 billion, a 12% increase at the midpoint versus the prior outlook. Adjusted EBITDA margin guidance was nudged up to 14.5%–15.0% of RBR, and adjusted EPS was raised to $9.00–$9.40, up from the earlier $8.35–$9.15 range. The revisions reflect robust bookings, a growing backlog and the contribution of recent acquisitions.

Acquisition of RelateCare Adds AI‑Enabled Healthcare Capability

The June 3 2026 purchase of RelateCare, an AI‑enabled clinical and patient‑access platform, is expected to contribute roughly $30 million of incremental RBR and $0.10 of EPS in 2026. RelateCare bolsters Huron’s managed‑services franchise, where revenue grew 43% YoY in Q2 2026, and supports the broader digital services pipeline that is projected to deliver double‑digit growth in the second half of the year.

Segment Performance Shows Broad‑Based Strength

Healthcare RBR rose 17.4% to $232.3 million, with operating margin expanding to 30.1%. Education RBR increased 7.8% to $139.4 million, while Commercial RBR grew 24.6% to $94.0 million. The number of revenue‑generating professionals climbed 24.7% YoY to 7,989, driven by a 59.5% surge in managed‑services staff.

Balance Sheet and Valuation Context

Operating cash flow for the quarter was $120.5 million, yielding free cash flow of $111.3 million after modest capex. Net debt stood at $802.8 million, giving a leverage ratio of 2.8× adjusted EBITDA, down from 3.1× in Q1 2026. The stock trades at a trailing P/E of ~17× and a forward P/E of ~14×, in line with the consulting industry average. Analyst consensus remains a Buy/Strong Buy, with an average 12‑month price target of $215.5, implying roughly 23% upside.

Risks and Uncertainties

Key risks include the integration of recent acquisitions, which could pressure margins if synergies are delayed. The consulting business remains exposed to macro‑economic headwinds such as elevated interest rates and ongoing US‑China trade tensions that may curb corporate spending. Additionally, a sizable portion of revenue depends on the renewal of existing client contracts; any slowdown in contract extensions could temper the growth trajectory. Finally, the company carries a net‑debt level that, while improving, still requires disciplined cash‑flow generation to sustain the share‑repurchase program.