Financial Performance - Q1 2025 net revenue reached $283.6 million, a 6.9% increase year-over-year from $265.2 million in Q1 2024[4] - Adjusted EBITDA for Q1 2025 was $29.1 million, up from $25.9 million in Q1 2024, with an adjusted EBITDA margin of 10.3%[8] - Adjusted net income for Q1 2025 was $14.2 million, consistent with the prior year, resulting in adjusted diluted earnings per share of $0.67[7] - Net revenue for the three months ended March 31, 2025, was $283,578,000, an increase of $18,381,000 or 6.9% compared to $265,197,000 in 2024[27] - Total revenue for the same period was $287,442,000, reflecting a growth of $18,344,000 or 6.8% from $269,098,000 in 2024[27] - Net income for the three months ended March 31, 2025, was $13,306,000, a decrease of $726,000 or 5.2% from $14,032,000 in 2024[31] - Adjusted net income rose to $14,191,000, compared to $14,032,000 in 2024, indicating a stable performance despite the drop in net income[31] - Operating income for Q1 2025 was $16,228,000, slightly down from $16,274,000 in Q1 2024[37] Segment Performance - Executive Search segment net revenue increased by 5.9% to $213.4 million, driven by growth across all regions[9] - On-Demand Talent segment net revenue rose by 12.4% to $42.6 million, reflecting strong demand[10] - Heidrick Consulting segment net revenue grew by 6.8% to $27.6 million, indicating positive performance in consulting services[11] - Revenue breakdown for Q1 2025 included $213,390,000 from Executive Search, $42,564,000 from On-Demand Talent, and $27,624,000 from Heidrick Consulting[39] - Operating loss in the On-Demand Talent segment was $5,634,000 for Q1 2025, compared to a loss of $4,849,000 in Q1 2024[39] Expenses and Margins - Operating expenses increased to $271,214,000, up $18,390,000 or 7.3% from $252,824,000 in the previous year[27] - The company reported an operating margin of 5.7% for the three months ended March 31, 2025, compared to 6.1% in 2024[27] - Total adjustments to operating income in Q1 2025 amounted to $12,894,000, compared to $9,594,000 in Q1 2024[39] - Reorganization costs in Q1 2025 were $4,161,000, with no such costs reported in Q1 2024[37] Cash and Assets - Total current assets decreased to $595,150,000 from $772,977,000 as of December 31, 2024, a decline of $177,827,000[33] - Cash and cash equivalents at the end of the period were $211,944,000, down from $515,627,000 at the end of 2024, a decrease of $303,683,000[33] - Total liabilities decreased to $558,641,000 from $741,371,000, a reduction of $182,730,000[33] Future Outlook - The company expects Q2 2025 consolidated net revenue to be between $285 million and $305 million, influenced by macroeconomic factors[14] - Consultant productivity increased to $2.0 million per consultant, up from $1.9 million in the previous year[5] - Confirmations in Executive Search increased by 5.3%, contrasting with a 3.2% decline in the prior year[5] - The company continues to focus on market expansion and new product development as part of its strategic initiatives[39] Dividends - The Board of Directors declared a cash dividend of $0.15 per share, payable on May 29, 2025[13]

Core Insights - Heidrick & Struggles International, Inc. reported Q1 2025 financial results that exceeded the high end of their outlook, showcasing a resilient business model and strong client trust [2][6][8] - The company aims to navigate economic uncertainty by enhancing client partnerships and providing strategic advisory services [2][3] Financial Performance - Consolidated net revenue for Q1 2025 was $283.6 million, a 6.9% increase from $265.2 million in Q1 2024, with an 8.1% increase on a constant currency basis [6][10] - Adjusted EBITDA rose to $29.1 million, with an adjusted EBITDA margin of 10.3%, up from 9.8% in the previous year [9][12] - Adjusted net income was $14.2 million, with adjusted diluted earnings per share remaining stable at $0.67 compared to Q1 2024 [8][9] Segment Performance - Executive Search segment net revenue increased by 5.9% to $213.4 million, driven by growth across all regions: 5.7% in the Americas, 9.4% in Europe, and 1.2% in Asia Pacific [10][28] - On-Demand Talent segment net revenue grew by 12.4% to $42.6 million, reflecting strong demand [11][12] - Heidrick Consulting segment net revenue increased by 6.8% to $27.6 million, indicating solid performance in consulting services [12][28] Outlook and Dividends - The company anticipates Q2 2025 consolidated net revenue between $285 million and $305 million, compared to $278.6 million in the same period last year [6][15] - A cash dividend of $0.15 per share was declared, payable on May 29, 2025, to shareholders of record on May 15, 2025 [14][15]

Core Viewpoint - Heidrick & Struggles International, Inc. will host a quarterly conference call to discuss its financial results for the first quarter of 2025 on May 5, 2025, at 5:00 PM ET [1]. Group 1 - The conference call will be accessible via live webcast on the investor relations section of the Heidrick & Struggles website [2]. - Participants can join the call by phone using the numbers +1-800-715-9871 or +1-646-307-1963, with the conference ID: 4805686 [2]. - A replay of the webcast will be available approximately two hours after the call concludes [2]. Group 2 - Heidrick & Struggles is recognized as a leading advisor on executive leadership, providing human capital leadership advisory services for over 70 years [3]. - The company focuses on enhancing client performance by helping organizations identify and develop outstanding leaders and teams [3].

Core Insights - Heidrick & Struggles International, Inc. will participate in a fireside chat at the Sidoti Virtual Investor Conference on March 19, 2025, at 8:30 AM Eastern Time [1] - The presentation will be available via live webcast and replay on the company's investor relations website [1] - Management will also conduct virtual meetings throughout the day [1] Company Overview - Heidrick & Struggles is a leading provider of global leadership advisory and on-demand talent solutions [2] - The company has over 70 years of experience in delivering value through human capital leadership advisory services [2] - Heidrick & Struggles focuses on helping organizations discover and enable outstanding leaders and teams [2]

Group 1 - Heidrick & Struggles International, Inc. (NASDAQ: HSII) specializes in executive search and leadership consulting, assisting companies in finding and developing leadership talent [1] - The company has a long history, dating back to the mid-20th century, indicating its established presence in the industry [1] Group 2 - Grassroots Trading emphasizes providing objective and unbiased research, focusing on small- to mid-cap companies while also identifying opportunities in larger companies [1]

Financial Data and Key Metrics Changes - Fourth quarter revenue reached $276.2 million, marking a 9.1% increase compared to Q4 2023 [33] - Full year 2024 revenue was $1.1 billion, a 7% increase versus 2023 [34] - Adjusted EBITDA for Q4 was $26.1 million with a margin of 9.5% [34] - Adjusted net income for Q4 increased 54.2% to $22.9 million, with adjusted diluted EPS of $1.08 [46] Business Line Data and Key Metrics Changes - Executive Search revenue grew 10% to $225 million, with regional increases of 11.1% in Americas, 8.1% in Europe, and 7.6% in APAC [39] - On-Demand Talent revenue increased 3% to $42.3 million, despite a projected 10% drop in the broader temporary staffing market [42] - Heidrick Consulting saw a 11.5% year-over-year organic revenue increase to $31.3 million [44] Market Data and Key Metrics Changes - Strong performance noted across North America, with Europe showing more caution [61] - Consumer confidence in the consumer sector was less robust, but other sectors remained strong [62] Company Strategy and Development Direction - The company is focused on three strategic priorities: being a trusted leadership partner, helping clients lead transformation, and innovating for continuous client engagement [16][19][26] - The company aims to build differentiated, deep, and durable client relationships to create unrivaled value [29] Management's Comments on Operating Environment and Future Outlook - Management noted that volatility and change create opportunities for growth, with clients increasingly questioning their leadership effectiveness [55][56] - The company expects first quarter revenue to be between $263 million and $273 million, indicating a solid start for 2025 [50] Other Important Information - A non-cash goodwill impairment charge of $43.3 million was reported in Q4 related to the On-Demand Talent business [45] - The company ended Q4 with a strong cash position of $563 million, up $85 million from December 2023 [48] Q&A Session Summary Question: What are you hearing from customers about confidence in launching new products? - Management indicated that volatility creates opportunities, and clients are focused on ensuring they have the right leaders in place [55][56] Question: How are you managing internal sales generating headcount? - The company plans to grow headcount in line with projected revenue growth, leveraging technology and senior productivity [58] Question: Are there geographic or industry verticals showing strength or weakness? - Strong momentum was noted across North America, with some caution in Europe and less robust consumer confidence in the consumer sector [61][62] Question: What are the drivers for anticipated adjusted EBITDA margin expansion in 2025? - Expected margin expansion will come from non-search businesses as the company aligns offerings better with client needs [64][68] Question: Can you elaborate on the variable compensation impact in Heidrick Consulting? - Management noted that Q4 saw a catch-up in variable compensation, but they do not foresee material changes going forward [70] Question: Have you factored in any meaningful impact from currency into the first quarter 2025 revenue outlook? - No significant currency impact was factored into the 2025 outlook [72] Question: What is the current level of C-suite turnover? - Management indicated that C-suite turnover has been consistent, with no significant spikes or dips [76] Question: How do you view potential M&A opportunities? - Management stated that while M&A is always a factor, they are not counting on it to change their guidance range for the quarter [84]

Core Viewpoint - Heidrick & Struggles (HSII) reported strong quarterly earnings, significantly exceeding expectations, indicating robust performance in the staffing industry [1][2]. Financial Performance - The company achieved earnings of $1.08 per share, surpassing the Zacks Consensus Estimate of $0.63 per share, and up from $0.72 per share a year ago, representing a 71.43% earnings surprise [1]. - Revenues for the quarter reached $276.19 million, exceeding the Zacks Consensus Estimate by 4.88% and up from $253.16 million year-over-year [2]. Market Performance - Heidrick & Struggles shares have declined approximately 7.5% since the beginning of the year, contrasting with the S&P 500's gain of 1.2% [3]. - The company's current Zacks Rank is 3 (Hold), indicating expected performance in line with the market in the near future [6]. Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.68, with projected revenues of $264.38 million, and for the current fiscal year, the EPS estimate is $2.90 on revenues of $1.12 billion [7]. - The staffing industry, to which Heidrick & Struggles belongs, is currently ranked in the bottom 22% of Zacks industries, which may impact stock performance [8].

Revenue Performance - Consolidated net revenue increased by $71.7 million, or 7.0%, to $1.1 billion in 2024 from $1.0 billion in 2023[144] - Executive Search net revenue was $818.4 million in 2024, an increase of $38.3 million, or 4.9%, compared to 2023[144] - On-Demand Talent net revenue was $168.3 million in 2024, an increase of $15.8 million, or 10.4%, compared to 2023[144] - Heidrick Consulting net revenue was $111.9 million in 2024, an increase of $17.6 million, or 18.6%, compared to 2023[144] - Total revenue increased by $74.5 million, or 7.2%, to $1.1 billion in 2024 from $1.0 billion in 2023[154] - Net revenue before reimbursements rose by $71.7 million, or 7.0%, to $1.1 billion in 2024, with Executive Search net revenue at $818.4 million, up 4.9%[155] Profitability Metrics - Adjusted EBITDA as a percentage of revenue was 10.1% in 2024, compared to 12.2% in 2023[146] - Adjusted EBITDA decreased to $111.2 million in 2024 from $125.6 million in 2023, with an adjusted EBITDA margin of 10.1%[151][154] - Consolidated Adjusted EBITDA was $111.2 million in 2024, a decrease of $14.4 million, or 11.4%, compared to $125.6 million in 2023[164] Expenses - Salaries and benefits expense as a percentage of net revenue was 65.1% in 2024, compared to 63.9% in 2023[146] - Salaries and benefits expense increased by $59.6 million, or 9.1%, to $715.6 million in 2024, representing 65.1% of net revenue[157][159] - General and administrative expenses rose by $10.5 million, or 6.7%, to $167.0 million in 2024, maintaining 15.2% of net revenue[160][161] - Cost of services increased by $9.9 million, or 9.1%, to $119.0 million in 2024, primarily due to higher project volumes[161] - Research and development expenses increased by $0.4 million, or 1.6%, to $23.1 million in 2024, focusing on technology-enabled products and services[162] Consultant Metrics - The number of Executive Search consultants increased to 418 in 2024 from 414 in 2023[145] - The number of Executive Search consultants increased to 418 in 2024 from 414 in 2023, with productivity rising to $2.0 million per consultant[156] - The average revenue per executive search increased to $146,000 in 2024 compared to $140,000 in the prior year[145] Regional Performance - The Americas segment reported net revenue of $556.9 million in 2024, an increase of 6.5% from $523.0 million in 2023, driven by a 7.1% increase in executive search confirmations[168] - Europe segment net revenue decreased by 0.8% to $165.0 million in 2024, attributed to a 9.7% decrease in executive search confirmations[172] - Asia Pacific segment reported net revenue of $96.4 million in 2024, an increase of 6.3% compared to $90.7 million in 2023, despite a 2.5% decrease in executive search confirmations[177] Cash and Financing - Combined cash, cash equivalents, and marketable securities increased to $563.5 million, up $85.4 million from $478.2 million at December 31, 2023[147] - For the year ended December 31, 2024, cash provided by operating activities was $150.4 million, reflecting net income net of non-cash charges of $80.1 million and accrued expenses of $47.0 million[200] - Cash used in investing activities for the year ended December 31, 2024, was $14.6 million, primarily due to capital expenditures of $26.3 million and purchases of available for sale investments of $163.6 million[202] - Cash used in financing activities for the year ended December 31, 2024, was $16.7 million, mainly due to cash dividend payments of $12.9 million[205] - The Company entered into an Amended Credit Agreement, increasing the committed unsecured revolving credit facility to $200 million from $175 million, with a maturity date of July 13, 2026[196] Impairment and Goodwill - The company recognized an aggregate goodwill impairment charge of $59.5 million in 2024, indicating potential volatility in future results due to market conditions and operating performance[224] - The accounting estimate related to goodwill impairment is critical, as assumptions are highly susceptible to changes in operating results and cash flows[225] - Changes in the business climate, market capitalization, and recent operating performance are monitored for potential triggering events that could lead to impairment charges[224] Fair Value and Contingent Considerations - The fair value of contingent consideration obligations is assessed based on expected future payments, influenced by revenue forecasts, operating expense forecasts, discount rates, and volatility[226] - The company uses a variation of the income approach, known as the real options method, to determine the fair value of contingent consideration[226] - The fair value of reporting units is impacted by overall market capitalization and stock price volatility[224] - The company updates its assumptions for fair value estimates annually to reflect information concerning its reportable segments[224]

Revenue Performance - Q4 2024 net revenue was $276.2 million, a 9% increase year over year, exceeding the high end of the outlook[5] - Full year net revenue for 2024 reached $1,098.6 million, up 7% from $1,026.9 million in 2023[10] - Total revenue for Q4 2024 was $280,886,000, representing a 9.1% increase from $257,390,000 in Q4 2023[33] - Revenue before reimbursements for the three months ended December 31, 2024, was $276,191 thousand, an increase of 9.5% from $253,162 thousand in the same period of 2023[49] - Total revenue before reimbursements for the twelve months ended December 31, 2024, was $1,098,573,000, an increase from $1,026,864,000 in 2023, representing a growth of approximately 7%[53] Segment Performance - Executive Search segment revenue was $202.5 million in Q4 2024, a 10.1% increase from $184.0 million in Q4 2023[14] - On-Demand Talent segment revenue increased to $42.3 million in Q4 2024, up 3.0% from $41.1 million in Q4 2023[17] - Heidrick Consulting segment revenue was $31.3 million in Q4 2024, an 11.5% increase from $28.1 million in Q4 2023[19] - The Executive Search segment generated revenue of $818,358,000 in 2024, up from $780,045,000 in 2023, marking an increase of about 4.9%[53] - The On-Demand Talent segment reported revenue of $168,325,000 in 2024, compared to $152,506,000 in 2023, representing a growth of approximately 10.4%[53] - Heidrick Consulting's revenue decreased to $111,890,000 in 2024 from $94,313,000 in 2023, reflecting an increase of about 18.7%[53] Profitability Metrics - Adjusted EBITDA for Q4 2024 was $26.1 million, with an adjusted EBITDA margin of 9.5%, down from 14.1% in Q4 2023[9] - Adjusted net income for Q4 2024 was $22.9 million, a 54.2% increase compared to $14.9 million in Q4 2023[8] - Adjusted diluted earnings per share for 2024 was $3.12, up 7.2% from $2.91 in 2023[11] - Adjusted EBITDA for the twelve months ended December 31, 2024, was $111,238,000, compared to $125,617,000 in 2023, indicating a decrease of about 11.5%[53] - The adjusted EBITDA margin for 2024 was 10.1%, down from 12.2% in 2023, reflecting a decline of 1.1 percentage points[53] Income and Expenses - Net income for Q4 2024 was a loss of $14,976,000 compared to a profit of $14,855,000 in Q4 2023, indicating a significant decline[33] - Operating expenses increased by 29.3% to $304,531,000 in Q4 2024, up from $235,526,000 in Q4 2023[33] - Net income for the twelve months ended December 31, 2024, decreased to $8,728, down from $54,410 in 2023, reflecting a significant decline[41] - Operating income for the twelve months ended December 31, 2024, was $7,528, a decrease of 90.0% compared to $75,357 in 2023[37] - Total operating expenses increased by 14.7% to $1,108,148 in 2024, up from $965,825 in 2023[37] Impairment and Charges - The company reported an impairment charge of $43,254,000 in Q4 2024, which was not present in Q4 2023[33] - The company recorded goodwill impairment charges of $58.0 million in the On-Demand Talent segment for the twelve months ended December 31, 2024[41] - Total impairment charges for the twelve months ended December 31, 2024, were $59,478 thousand, significantly higher than $7,246 thousand in 2023[49] - The company reported a restructuring charge of $6.9 million for the twelve months ended December 31, 2024[41] Cash and Assets - Cash and cash equivalents increased to $515,627 as of December 31, 2024, from $412,618 in 2023, reflecting a growth of 24.9%[43] - Total assets as of December 31, 2024, were $1,194,188, an increase from $1,141,591 in 2023[43] - Cash, cash equivalents, and restricted cash at the end of the period on December 31, 2024, totaled $515,813 thousand, up from $412,618 thousand at the end of 2023[47] Future Outlook - The company expects Q1 2025 revenue to be between $263 million and $273 million[21] - The company anticipates guidance for Q1 2025 based on current expectations and market conditions[29]

Quarterly Revenue Exceeds High End of OutlookAll Business Segments Contribute to Top Line GrowthFinancial Highlights: Q4 2024 net revenue of $276.2 million increased 9% year over year and full year net revenue of $1,098.6 million increased 7% year over year Adjusted EBITDA in Q4 2024 was $26.1 million with adjusted EBITDA margin of 9.5% and full year adjusted EBITDA was $111.2 million with adjusted EBITDA margin of 10.1% Q4 2024 adjusted net income was $22.9 million with adjusted diluted earnings per share ...