Good afternoon, everyone, and welcome to Huron Consulting Group's webcast to discuss our financial results for the First Quarter of 2021. I want to remind you that this call is being recorded. Before we dive in, I’d like to draw your attention to the disclosure at the end of the company's news release regarding any forward-looking statements that may be made or discussed today. This news release is available on Huron's website, so please take a moment to review it, along with our SEC filings, to understand the factors that could influence the topics we will cover in this call. We will be discussing one or more non-GAAP financial measures, so please refer to the earnings release and Huron's website for all necessary SEC disclosures, including reconciliations to the closest GAAP figures. Now, I will hand it over to Jim Roth, Chief Executive Officer of Huron Consulting Group. Jim, the floor is yours.

Good afternoon, and welcome to Huron Consulting Group's First Quarter 2021 Earnings Call. With me today are John Kelly, our Chief Financial Officer; and Mark Hussey, our President and Chief Operating Officer. Our first quarter financial results were in line with our expectations. Revenues declined 9% in the first quarter of 2021 as compared to the same period in the prior year, driven by declines in the Healthcare and Education segments. Those declines were partially offset by strong growth in the Business Advisory segment. During the first quarter, we saw an increase in our sales pipeline and the pace of signings in our Healthcare and Education businesses, which gives us further confidence in our ability to meet our updated full year performance expectations. As the overall demand for our services has increased during 2021, we now believe we are past the pandemic-driven low watermarks for Education and Healthcare segment revenues, and we expect sequential growth in these businesses moving forward in 2021. We believe the low point for the Education segment occurred in the fourth quarter of 2020, while the low point for the Healthcare segment was in the first quarter of 2021. Looking ahead, we see increased demand for our Healthcare and Education services as our clients prepare for a recovering economic environment, which has also strengthened growth in our Business Advisory segment. I will now share some additional insight into our first quarter performance. During the first quarter, Healthcare segment revenues declined 17% over the prior year first quarter, reflective of the difficult first quarter comparisons driven by the growth we experienced in the segment at the beginning of 2020 prior to the impact of the pandemic. The Healthcare business got off to a slower start this year given the continued disruption of the pandemic and vaccine rollout on our hospital and health system clients. As the quarter progressed, our sales pipeline increased and remained at record levels and the pace of signings and conversion to hard backlog also improved each month. Assessments for our performance improvement offerings have continued to grow and an April assessment volume neared pre-pandemic levels. As hospitals and health systems plan for a post-pandemic future, many organizations are prioritizing several key initiatives. Among the most important priorities is making care more affordable while also providing greater price transparency to consumers. As we look at our pipeline, market demand is focused on our core performance improvement and managed services offerings to address near-term financial pressures. In addition, we are seeing substantial demand for one of our newest offerings, which was developed collaboratively across our healthcare, strategy and technology businesses. This offering helps health systems achieve structural changes to ensure the sustainability of their business model in the future. Given the near-term financial challenges and long-term growth aspirations of our clients, we believe our collective performance improvement related offerings will continue to be an ongoing source of growth for our business. A second priority for healthcare providers is accelerating care transformation strategies to deliver a substantially greater amount of care virtually, including through telehealth, remote patient monitoring and hospital at home models. The pandemic has highlighted the need for providers to formalize their long-term virtual care strategies and build the right consumer-centric infrastructure to support patients throughout their care journey. The breadth of our care delivery, organizational transformation and digital technology and analytics offerings and deep expertise in implementing telehealth and hospital-at-home models positions Huron to add significant value to our clients as they establish and implement their care transformation. The third priority among our healthcare clients is focusing on enhancing the digitization and use of clinical and operational data with a strong emphasis on planning and analytics. Many healthcare organizations are making significant investments in their administrative operations comparable to some of the investments in clinical systems that have been made over the past decade. Once again, our Healthcare business is well positioned to help our clients navigate this next wave of digital transformation. The growth of our Healthcare pipeline and the pace of signings in recent months are indications that our offerings are resonating well with our client base as they seek assistance in addressing these key priorities. Turning to the Business Advisory segment. In the first quarter of 2021, Business Advisory segment revenues grew 12% over the prior year quarter, 9% organically, driven by strong broad-based demand across our strategy, digital technology and analytics and distressed advisory offerings. As we've discussed on prior calls, we continue to execute on our commercial strategy, which is aimed at going to market collaboratively across the four businesses in this segment. The Business Advisory segment has grown revenues at a compound annual growth rate of 15% over the last five years, inclusive of the recent pandemic era, which reinforces the importance of this segment to our company's growth strategy. When looking beyond the numbers, you will find several important attributes of that revenue growth that bode well for the future of this segment. First, we are winning sizable projects among numerous Fortune 500 companies, particularly in energy and utilities, financial services, industrials and manufacturing and life sciences. Second, we continue to capitalize on one of our greatest strategic advantages by integrating our deep industry and functional expertise with our strong strategy, technology and operations capabilities. Coupled with our nimble approach to serving our clients from strategy through execution, our expertise and experience allow us to compete and win against larger competitors. We are in the process of building additional competencies that will further position the segment for above-average growth in the coming years. In addition, our digital technology and analytics offerings continue to provide the foundation for growth in the commercial sector and our distressed advisory services continue to perform well amidst the many financial challenges impacting middle market companies. We are also seeing solid demand for our strategy and innovation services as the economy continues to recover. Turning now to the Education segment. In the first quarter of 2021, Education segment revenues declined 19% over the prior year quarter, reflective of the difficult first quarter comparisons, driven by the strong growth we experienced in the segment at the beginning of 2020 prior to the impact of the pandemic. Sequentially, Education segment's revenues grew 7% over the fourth quarter of 2020, driven by strong demand in our research strategy and operations offerings. Similar to Healthcare, as the quarter progressed, our sales pipeline increased across our offerings and the pace of signings improved month-over-month. While some of the larger ERP-related engagements continue to be delayed, the pipeline of opportunities is widening and many institutions are beginning to feel more comfortable that they have the bandwidth and financial stability to undertake these significant projects. We have also seen smaller institutions moving ahead with their digital transformation, given greater visibility into their financial position. While some higher education institutions face sizable COVID-19-related losses, others have found the losses to be less than initially anticipated, in part due to financial support by the federal government. Many colleges and universities are now more aggressively evaluating how to be successful in a post-pandemic environment, including trying to establish more sustainable operating models. These attributes will continue to drive demand for our broad set of offerings in this segment. Before I turn to our outlook for the year, I'd like to add several comments about our collective technology capabilities. As I mentioned last quarter, our technology services grew to over 30% of total company revenues in 2020. Technology has become an increasingly important pillar of growth for this company, and is deeply embedded in each of our segments. We continue to grow our teams in North America as well as in India to support the market demand for these offerings. Finally, let me turn to our outlook for the year. Historically, we have not adjusted our annual guidance after the first quarter. Today, the signs of recovery in our Healthcare and Education businesses and continued momentum in the Business Advisory segment give us confidence to raise and narrow our full year guidance. As our press release indicates, we are increasing and narrowing our annual revenue guidance to $850 million to $900 million. We are also maintaining our adjusted EBITDA guidance in a range of 10.8% to 11.8% of revenues and increasing our adjusted diluted earnings per share in a range of $2.35 to $2.75. We raised our revenue guidance to reflect the current and anticipated demand for our services across all segments. We continue to anticipate modest sequential revenue growth in the first half of the year as compared to the second half of 2020, followed by stronger growth in the second half of 2021. We are also investing for the long term, further expanding our capabilities in areas we believe have strong growth potential given current market dynamics, including our healthcare managed services and our digital technology and analytics offerings across all of our segments. We are focused on our financial strategy of achieving sustainable organic revenue growth and expanding margins over time, and we continue to believe our business will generate mid- to upper single-digit growth over the medium term. The disruption facing our clients and primary end markets is substantial, stemming from the impacts of the COVID-19 pandemic as well as the rapidly evolving competitive landscape. And we believe this disruption creates significant opportunities for growth in our business. Before I turn it over to John, let me make two final comments. First, I want to recognize the challenge that our Indian colleagues are facing given the recent surge in COVID-19 cases. We are working closely with our country leadership team to support our people and their loved ones as well as the local community and have executed our business continuity plans to minimize the disruption to our business. Lastly, I want to thank our entire team for all they have done during the pandemic. They have demonstrated an incredible amount of agility and creativity while also remaining focused on supporting our clients, our company and each other. Now let me turn it over to John for a more detailed discussion of our financial results.

Thank you, Jim, and good afternoon, everyone. Before I begin, please note that I will be discussing non-GAAP financial measures, such as EBITDA, adjusted EBITDA, adjusted net income, adjusted EPS and free cash flow. Our press release, 10-Q and Investor Relations page on the Huron website have reconciliations of these non-GAAP measures to the most comparable GAAP measures, along with a discussion of why management uses these non-GAAP measures and why management believes they provide useful information to investors regarding our financial condition and operating results. Also, unless otherwise stated, my comments today are all on a continuing operations basis. Also, our acquisition of Unico Solution, which closed on February 1, is included in our first quarter financial results in the Business Advisory segment, subsequent to the acquisition date. Now let me walk you through some of the key financial results for the quarter. Revenues for the first quarter of 2021 were $203.2 million, down 8.7% from $222.6 million in the same quarter of 2020. The decline in revenues in the quarter was driven by the Healthcare and Education segments, which faced challenging pre-pandemic year-over-year comparisons in the first quarter of 2021. This decline was partially offset by continued growth in the Business advisory segment. Net income was $5.4 million or $0.24 per diluted share in the first quarter of 2021 compared to net loss of $42.3 million or $1.94 per diluted share in the same quarter in the prior year, which was inclusive of the $59.8 million pretax goodwill impairment charge taken in the first quarter of 2020. Our effective income tax expense rate in the first quarter of 2021 was 22.1% compared to 21% benefit rate one year ago. Our effective tax rate for Q1 of 2021 was more favorable than the statutory rate, inclusive of state income taxes, primarily due to a discrete tax benefit for share-based compensation awards that vested during the first quarter of 2021. This favorable tax benefit was partially offset by certain nondeductible expenses. Adjusted EBITDA was $16.5 million in Q1 2021 or 8.1% of revenues compared to $19 million in Q1 of 2020 or 8.5% of revenues. Adjusted non-GAAP net income was $7.8 million or $0.35 per diluted share in the first quarter 2021 compared to $9.8 million or $0.44 per diluted share in the same period of 2020. Now I'll make a few comments about the performance of each of our operating segments. The Healthcare segment generated 39% of total company revenues during the first quarter of 2021. The segment posted revenues of $79.7 million for the first quarter of 2021, down $15.9 million or 16.6% from the first quarter of 2020. The decline in revenue reflects the ongoing impact of the COVID-19 pandemic in the first quarter of this year relative to a quarter that was largely unimpacted by COVID-19 last year. As Jim mentioned, we believe the first quarter of 2021 will be the revenue low point for this segment related to the pandemic as we expect sequential revenue growth moving forward in 2021, reflecting the ongoing recovery of the healthcare industry. Operating income margin for Healthcare was 25.7% for Q1 of 2021 compared to 25.2% for the same quarter in 2020. The quarter-over-quarter increase in margin was primarily attributable to decreases in conference-related expenses, performance bonus and share-based compensation expense and promotion and marketing expenses, largely offset by an increase in salaries and related expenses for our revenue-generating professionals as a percentage of revenues, reflecting lower utilization. As a reminder, our first quarter results included the annual resetting of our wage basis for certain fringe items like the employer portion of FICA taxes and our 401k match. As Jim mentioned, we continue to invest in areas of our business that align with our enterprise strategy, including managed services. In April, we hired approximately 300 healthcare professionals to expand our managed services capacity to provide revenue cycle billing, collections, insurance verification and charge integrity services to our healthcare clients. While we expect revenue of around $10 million during 2021 related to this group hire, we only expect modest accretion from an earnings perspective as we invest to build out our capabilities for future growth. The Business Advisory segment generated 36% of total company revenues during the first quarter of 2021. The segment posted revenues of $72.9 million in Q1 2021, up $8 million or 12.3% from the first quarter of 2020. Revenues for the first quarter of 2021 include $2.4 million from our acquisitions of ForceIQ and Unico Solution. Our organic revenue growth rate in the Business Advisory segment was 9% for the quarter. The quarter-over-quarter increase in revenue was broad-based across our strategy, digital, technology and analytics and distressed advisory offerings. The operating income margin for the Business Advisory segment was 17.9% for Q1 of 2021 compared to 15.2% for the same quarter in 2020. The quarter-over-quarter increase in margin was primarily due to decreases in restructuring charges and promotion and marketing expenses, partially offset by an increase in performance bonus expense for our revenue-generating professionals. The Education segment generated 25% of total company revenues during the first quarter of 2021. The segment posted revenues of $50.6 million in Q1 2021, down $11.5 million or 18.5% from the first quarter of 2020. The decline in revenue reflects the ongoing impact of the COVID-19 pandemic as compared to a quarter that was largely unimpacted by the pandemic in 2020. The Education segment grew 7% sequentially in the first quarter of 2021 over the fourth quarter of 2020. And as Jim mentioned, we believe the fourth quarter of 2020 will be the revenue low point for this segment related to the pandemic as we expect sequential revenue growth moving forward in 2021, reflecting the ongoing recovery of the higher education industry. The operating income margin for Education was 17.1% for Q1 of 2021 compared to 21.1% for the same quarter in 2020. The quarter-over-quarter decline in margin was primarily due to a decrease in utilization, partially offset by decreases in contractor expense, promotion and marketing expense and performance bonuses expense for our revenue-generating professionals. Other corporate expenses not allocated at the segment level were $28.8 million in Q1 2021 compared with $27.1 million in Q1 of 2020. Unallocated corporate expenses in the first quarter of 2021 include $800,000 of expense related to the increase in liability to participants in our deferred compensation plan, which is fully offset by the corresponding gain in other income related to the increase in value of the assets used to fund this plan. Conversely, unallocated corporate expenses in the first quarter of 2020 reflected a reduction of expense of $4.7 million related to our deferred compensation plan. Absent the impact of our deferred compensation plan in both periods, the $3.8 million decrease in unallocated corporate costs reflects decreased stock compensation and salaries and related costs for our support personnel, decreased practice administration and meeting expenses and decreased training expenses as well as recruiting expenses. Now turning to the balance sheet and cash flows. DSO came in at 64 days for the first quarter of 2021 compared to 52 days for the fourth quarter of 2020 and 62 days for the first quarter of 2020. We expect DSO to normalize to around 60 days over the course of 2021. Total debt includes the $265 million in senior bank debt and a $3 million promissory note for total debt of $268 million. We finished the quarter with cash of $22 million for net debt of $246 million. This was a $110 million increase compared to Q4 of 2020 as the first quarter reflects the payment of our annual bonuses. The first quarter also included $11.5 million of share repurchases under our $50 million Board authorization, $8.5 million of shares redeemed to satisfy employee tax withholdings related to our share-based compensation program and $6 million related to business acquisitions. Our leverage ratio, as defined in our senior bank agreement, was approximately 2.6 times adjusted EBITDA as of March 31, 2021 compared to 3.5 times adjusted EBITDA at the end of Q1 2020. The first quarter of 2020 leverage reflects borrowings of $125 million on a revolving line of credit, out of an abundance of caution at the outset of the COVID-19 pandemic. Our net leverage ratio was 2.4 times trailing 12 months adjusted EBITDA as of March 31, 2021 when the bank definition calculation is adjusted for cash on hand. This compares to 2.3 times trailing 12 months adjusted EBITDA as of March 31, 2020, when calculating in the same manner. Cash flow used in operations in the first quarter of 2021 was $83 million, and we used $2 million of our cash to invest in capital expenditures, inclusive of internally developed software costs, resulting in free cash flow of negative $85 million. Finally, let me turn to our expectations and guidance for 2021. As Jim noted, we are raising and narrowing our full year 2021 revenue guidance to $850 million to $900 million. The increase in our revenue guidance primarily reflects the ongoing momentum in our Business Advisory segment and better visibility and increased confidence that we have progressed at the revenue low points related to our Healthcare and Education segments. In addition, we are forming our full year adjusted EBITDA guidance to be in a range of 10.8% to 11.8% of revenues, and we are increasing our full year adjusted non-GAAP diluted earnings per share guidance to be in a range of $2.35 to $2.75. Finally, we expect our full year effective tax rate to be in a range of 26% to 29%. Thanks, everyone. I would now like to open the call up to questions.

Our first question comes from Tobey Sommer of Truist Securities.

With respect to the Education and Healthcare businesses, I was wondering if you could comment on what the pipeline looks like from a project size and complexity perspective as you work your way through the year and maybe juxtapose that with different ranges of small versus large size historically.

I mean a lot of things, I think, are beginning to look a little bit like they did towards the end of 2019. I think in terms of size and complexity, we're going to have a mix of decent-sized large systems projects. We're going to always have strategy projects that tend to go a little bit in the middle. And of course, research and students are doing very well. So I think the composition of the pipeline is going to look fairly similar to what it was before. I think what we witnessed particularly early in 2020 and through a lot of 2020 was scaling back from a lot of clients in terms of the size, just because they weren't sure of the bandwidth and weren't sure if those could be other disruptions. But I think we're beginning to see the pipeline begin to resemble what it looked like prior to COVID in terms of size and complexity. John, anything you want to add to that?

Jim, I think I agree with what you said. I think the only thing that I would add is in the Education segment, I think in terms of the research parts of our business as well as the strategy part of the business, I think the pipeline, as Jim said, we definitely have line of sight to kind of pre-COVID levels in both parts or those two parts of the business. I'd say for the larger admin system replacement projects or the student system replacement projects, we're certainly seeing opportunities in the market. And in the long run, we're highly confident that that's a very big addressable market for us in a place where we're very well positioned. But in the short term, just because of the sheer size of some of those projects, I think that's probably not quite back to pace yet with the pre-COVID levels on some of those bigger ones. But that's something that, obviously, there are opportunities out there that we plan on positioning ourselves well as the year goes on in that part of the market.

Could you give us a sense for your hiring posture for internal full-time staff and maybe a little bit more color about that group hire?

Sure. I can start on that. From a hiring perspective, I'd say as we start to have better visibility into the back half of the year, and we've seen some of the conversion of the pipeline and some of the opportunities that we've had since the beginning of the year. I think that we have been getting more aggressive from a hiring perspective. If I take it kind of segment by segment in the healthcare segment, as you know, our target utilization in that part of the business tends to be in the higher 70s, and we finished the first quarter more in the 68% range. So I think we still have some room from a utilization perspective there. But we are still making strategic hires. We're probably not adding a ton of capacity at this point just based on some of the capacity we have in our current workforce. On the Education side, I'd say there, certain parts of the business have rebounded strongly. I think that you do see us getting more aggressive in terms of hiring within the education part of the business. It's a nice sequential growth in the first quarter versus the fourth quarter. Based on our projections for the rest of the year, I think that we expect utilization to tighten up as the year goes on and for the need to expand. And then on the Business Advisory segment, that segment has been growing at a nice pace really throughout the pandemic, and we've been hiring throughout the pandemic as well. And our expectation is that, that trend will continue as the year goes on.

And last question for me, and I'll get back in the queue. Could you talk about either headwinds or tailwinds that have been created out of the many kind of factual appropriations out of Washington and/or the sort of prospective ones. I think there was some comment about basic research in the infrastructure-related bill that maybe could play in the education space. So I wanted to get your perspective there, too.

Are you talking about Healthcare or Education or both?

There are many different appropriations that have come out of Washington, and several more are in progress.

I want to make a few remarks. First, I believe many of our clients in both health and education faced challenges, but at this stage, some of the losses they anticipated are not as severe as expected. While the impact was difficult, many are in a better position now than their worst fears from earlier in the pandemic. This could be a positive factor for us. Regarding appropriations, particularly for research, the outlook seems promising, as this administration appears to strongly support research initiatives. However, there are uncertainties concerning reimbursement for Medicare and Medicaid, as well as potential assistance from state and local governments. Overall, many of our clients are feeling more optimistic about their future than they did several months ago, and this shift is likely contributing to the increase in our pipeline, as they gain confidence in their ability to achieve their goals.

Our next question comes from Andrew Nicholas of William Blair.

I wanted to ask a follow-up on the hiring environment. I appreciate your color on kind of segment level expectations. But could you maybe speak to the competitiveness of finding talent right now? It seems like there's a lot of your competitors who have similar ideas in terms of adding headcount. And I'm just wondering how you kind of take that into account when you're thinking about building into demand later on this year?

I believe the hiring environment has become more competitive. It's competitive not just among our direct competitors but also across other industries as people explore different opportunities. There is significant growth, especially in technology and related fields. As the economy accelerates, many organizations are likely to be hiring, making the environment more challenging. However, I feel we are quite capable of recruiting talent. We have a strong culture that people recognize, which gives us a real advantage. While it is a more competitive environment, we may still find individuals looking to make a career transition. Looking back over the past couple of decades, one of the most challenging aspects of consulting recruitment has been the expectation of extensive travel. Currently, I estimate that the travel requirements will likely be about half of what they used to be, with some exceptions of isolated instances where it might be more. Reducing the frequency of travel significantly improves the recruiting environment. We believe this will be advantageous for us as the effects of COVID begin to settle.

For my follow-up, I would like to inquire about the pipeline from a different perspective, specifically regarding the overall visibility across each of the businesses. It appears that the pipeline is developing well, and the various segments are finding it easier to make decisions. Could you compare the current visibility to what we discussed three months ago during the fourth quarter call, and how it compares to the summer months? I am trying to understand how quickly you anticipate decisions will accelerate, even for items not currently in the pipeline.

I can start with that. Looking at our Healthcare segment, the difference over the past three months is that our clients have been affected by the events of the past year, and previously, they were facing a tough environment. We noticed many opportunities in the pipeline and have had productive discussions. The progress from a quarter ago has shifted towards the end of the first quarter and into April, where we've seen conversions on some opportunities and projects that we believe will contribute positively as the year progresses, helping us to regain our growth trajectory. Additionally, we monitor the volume of assessment activities, where clients approach us with financial and operational issues looking for solutions. The volume of these assessments in Healthcare is now comparable to pre-COVID-19 levels, which we view as a positive indicator. We've also been expanding our managed service offerings over the past year, and there’s been significant client interest, leading to new opportunities. Regarding Education, the key difference is that we experienced strong sequential revenue growth from what was likely the low point in the fourth quarter, like what we saw in Healthcare. There's been a notable increase in the conversion pace of opportunities from previous calls, particularly in our research and strategy areas, with many conversions happening in the first quarter. This gives us confidence moving forward. Overall, in both Healthcare and Education, progress in the vaccination rollout in the US is allowing our clients to focus more on their strategic priorities. Many are revisiting objectives that were set before the pandemic, which had significantly disrupted their plans. Lastly, from a business advisory standpoint, as mentioned by Jim, we've seen a rebound in the strategy segment, while our technology business continues to gain momentum with a comprehensive suite of offerings that appeal to our commercial clients and those in healthcare and education. One area that performed exceptionally well is our distressed business, which recorded solid growth in the first quarter year-over-year, although they will face difficult comparisons in the upcoming quarters due to last year’s strong market performance. Despite this, we remain optimistic about the pipeline and business opportunities moving forward, though we expect challenges in the upcoming quarters based on this year's benchmarks.

Our next question comes from Kevin Steinke of Barrington.

So I think you've touched on this a bit in response to other questions. But maybe just can you talk about why the pipeline in Healthcare and Education has continued to move forward and convert maybe a little bit more quickly than you would have expected. In your original guidance, perhaps you had kind of built in some more conservatism into that original guidance based on the uncertainty of the situation. But as you talk to leaders in Healthcare and Education, is it just kind of the vaccination rollouts that are really given the confidence to move forward a little more quickly than you'd expect there? What other factors would you highlight there?

Kevin, this is Jim. There are a couple of perspectives on this. The past year has unfolded rapidly for all of us. Reflecting on the events from last year, we experienced a difficult period in March, April, and May when the healthcare system was heavily focused on addressing the new virus while education was left questioning the return of students in September. There was cautious optimism that summer would improve the situation, which it did initially, but then it worsened, delaying progress in the fall. With another surge in December, our clients faced a challenging time of fluctuations and uncertainty. The emergence of vaccines in January has since provided renewed confidence, allowing them to pursue their historical objectives, particularly in improving digital transformations, while also adapting to a very different market landscape, especially in Education and Healthcare. This is likely why we are seeing an increase in our pipeline. Clients now recognize that they cannot simply revert to old methods; they need to adapt to the new realities. Whether it's transforming healthcare delivery, expanding telehealth services, or developing new educational business models, fresh strategies will be necessary to navigate this uncertain environment. This applies across all types of organizations, whether large or small, public or private. They all seem to be gaining the confidence needed to focus on their operations again. Over the past year, it was difficult for them to concentrate on their business with the constant possibility of renewed surges. This shift in mindset has encouraged them to take charge of their business affairs, contributing to our improved visibility into the pipeline.

I wanted to follow up on your discussion about hiring around 300 people in managed services. Is this a result of the original managed services project you had in healthcare for a larger client, and have you experienced some success there? Does this explain why you're able to expand this offering? I wanted to connect this with what you were initially doing in the healthcare field.

I think, Kevin, it's clearly a continuation of our strategy as it relates to managed services. We do see the need in the market. We see a number of clients. We're very interested in opportunities to improve their operations, improve their financial results, and they view managed services with a trusted partner as one way to be able to achieve those objectives. And so we've had a really great partnership on that first project that we've talked about. We feel like we've been very successful working with the client there to drive a really positive impact for them. And that has kind of opened the door for more opportunities for us to continue to build out those capabilities and to be thoughtful about how we can continue to build out the team there to meet the demand that we expect to be coming. So it is an offshoot in that regard, then we think that the 300 people that we've hired. Quite frankly, there is specific revenue that will come associated with that group, but there were a number of things in our own pipeline, where we really made the determination that bringing these employees on are going to help us execute and most effectively deliver on some of those opportunities that we're separately existing in our pipeline. So we're very excited that and then join the team, and they think our viewpoint is it really helps round out our offerings from a managed services perspective in health care.

You talked about also in your prepared comments, just how sizable technology has become as part of your offerings and that you're going to continue to invest there. Would technology-focused acquisitions still kind of be at the top of mind when you're thinking about M&A going forward? And are you contemplating when you're talking about investing in your technology offerings, potentially further acquisitions in that space?

I think the answer is certainly, yes. We see continuing opportunities just to fill in what we think is a fairly comprehensive suite of enterprise platform capabilities today, and it's expanded into data and analytics as well. So there's definitely opportunities for us just to strengthen various areas. And I think you'll see us continue to be active where we see opportunities in the marketplace.

How do you feel about your capacity regarding the balance sheet to support your acquisition strategy? I assume you will continue to pay down debt, but maybe John could discuss debt reduction and your goals for leverage.

Kevin, to answer your first question, we are confident in our capacity, considering our revolving line of credit and anticipated free cash flow for the year. As you know, we typically reach our seasonal peak in borrowings just after the annual incentive payments in March, which is expected. After the first quarter, our priority is to pay down debt. With that significant cash outflow behind us and our expected free cash flow for the remainder of the year, we believe we have ample opportunity to continue reducing our debt and aim for a leverage ratio of around 2 times, while also having the capacity to repurchase shares when it makes sense. This will help offset some of the dilution from our share-based compensation programs, as well as support strategic acquisitions. Our focus remains on organic growth, but we recognize that there are times when acquiring certain assets can provide a quicker entry point, particularly in technology. When such opportunities arise, we feel confident in our leverage and cash flow to pursue them and ensure we are bringing in the necessary talent to execute our strategy.

Our next question comes from Josh Vogel of Sidoti.

A lot of my questions were covered, but maybe there's just another way to frame the pipeline of visibility conversation. You're seeing increases in the sales pipeline and the pace of signings and health care and education, but also a sales cycle that remains somewhat elongated. I'm just curious, given the recent conversions, does that require some easing there relative to last year? And do you think that the cycle back to pre-pandemic circles by the second half of the year or perhaps even quicker, given how long clients were kind of sitting on their hands and maybe looking to rapidly reengage?

There are two main areas where we observed deferrals. One is in Healthcare and some performance improvement initiatives, which were postponed during the peak of the pandemic. The other is in education, where the larger ERP projects faced the most delays. In both sectors, we've noticed a significant shift in the environment. It was challenging for clients to initiate such large projects when they were uncertain about their financial stability and the capacity of their teams. They realized that many aspects would need to be handled remotely. Consequently, many decided that while these projects were important, they weren't urgent enough to pursue at that moment. Now, we're starting to see an uptick in activity. For larger system projects, there is a high degree of coordination needed from our clients, and they play a crucial role in making these initiatives effective. As clients regroup, they are beginning to see the possibility of tackling these more complex projects again. A similar trend is emerging in Healthcare; I spoke to someone today who mentioned that while the current year’s financial performance is looking promising, they are more concerned about cost structures in the coming years. This is prompting them to reconsider how to reposition their businesses for future success. We completely understand the reasons behind these delays, and many of those issues are now easing. We're starting to witness a more proactive approach as clients begin to address their future, which is reflected in the increasing size, complexity, and visibility of our pipeline.

The hiring of the 300 FTEs, I think, John, you said it would add about $10 million to revenue. Is that all going to be in Q2?

No, that's for the remaining nine months of the year, Josh.

And I'm just thinking, you hired these FTEs. They're targeted specifically for this project. Do you think there's an opportunity, though, perhaps keep these people on your bench when the project is over hoping that you can deploy them to other engagements considering how the pipeline is building?

Yes, to clarify on that point, they were not hired for any specific project. They were brought on to enhance our managed services capabilities. They will be deployed on some of the opportunities that were in our pipeline prior to their acquisition as well as some specific work related to them. The plan is indeed to build around this team and to continue expanding these capabilities. We expect the team to grow based on the demand we see in the market, and we believe there will be numerous opportunities for these employees to assist our clients. Looking ahead to 2022, we anticipate this will be an area that drives organic growth within the business, and these employees will play a key role in that.

And just one last one. A lot of talk out there about an unprecedented and overwhelming wave of applications at colleges, especially as some have waived the SATs and ACTs. And I was just curious, is that a potential tailwind for your business?

I don't think so, Josh. First of all, it's not clear to me that the number of seats for all those applicants has really changed. Therefore, you may have a lot more applicants, but it doesn't necessarily lead to increased revenue. It certainly isn't a headwind, but I don't think it will serve as a tailwind either. Right now, we're experiencing an anomaly where everyone is trying to do their best to get in due to uncertainties about who will return to campus. The more prestigious schools will have no issue, but many are thinking they might apply to places they ordinarily wouldn't because of the ongoing disruptions. Time will tell if that actually occurs, but I don't see it being a significant differentiator. It's likely just an unusual statistic that will remain for a while.

Our next question comes from Tobey Sommer of Truist Securities.

What impact do you think President Biden's initiative to make community college free and other changes in education might have on the demand for your services?

Tobey, I think it remains to see what's going to happen there. I would not anticipate that having a big impact on our core client base, which is certainly the largest research universities and also maybe the top 200 or 300 ranked institutions. I think it has a big impact for people wanting to get an education that might not be able to afford to do it. But I don't think it's going to have a big impact in our business.

Seeing no more questions in the queue, I'd like to turn the call back over to Mr. Roth.

Thank you all for spending time with us this afternoon. We look forward to speaking with you again in July when we announce our second quarter results. Have a good evening.

That concludes today's conference call. Thank you, everyone, for your participation.