[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) The company reported strong Q2 2025 financial results, exceeding expectations, with the CEO highlighting strategic focus and providing a positive Q3 2025 revenue outlook and dividend declaration [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Heidrick & Struggles reported strong second-quarter 2025 results, exceeding its outlook with significant revenue growth and improved profitability across all business segments, while also declaring a cash dividend Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net Revenue | $317.2M | $278.6M | +13.9% | | Adjusted EBITDA | $33.9M | $28.8M | +17.7% | | Adjusted EBITDA Margin | 10.7% | 10.3% | +0.4 pp | | Adjusted Net Income | $18.1M | $14.1M | +28.4% | | Adjusted Diluted EPS | $0.85 | $0.67 | +26.9% | | Cash Dividend Declared | $0.15/share | N/A | N/A | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Tom Monahan highlighted a strong first half of 2025, with Q2 results surpassing expectations despite macroeconomic uncertainty, focusing on client relationships, investing in professionals, and delivering shareholder value - CEO Tom Monahan noted a **strong first half of 2025**, with **Q2 results exceeding the high end of their outlook**, despite an uncertain macroeconomic environment[3](index=3&type=chunk) - The company is focused on **growing differentiated, deep, and durable client relationships** by meeting evolving client needs and **investing in world-class professionals** to **create shareholder value**[4](index=4&type=chunk) [Q3 2025 Outlook & Dividend](index=1&type=section&id=Q3%202025%20Outlook%20%26%20Dividend) Heidrick & Struggles provided a revenue outlook for Q3 2025 and announced a quarterly cash dividend Q3 2025 Revenue Outlook | Metric | Q3 2025 Outlook | Q3 2024 (Year-Ago Period) | | :---------------- | :---------------- | :------------------------ | | Consolidated Net Revenue | $295M - $315M | $278.6M | - The Board of Directors declared a 2025 third quarter cash dividend of **$0.15 per share**, payable on August 28, 2025, to shareholders of record on August 14, 2025[4](index=4&type=chunk)[13](index=13&type=chunk) - The Q3 2025 revenue outlook is **subject to external factors** such as foreign exchange rates, interest rates, foreign conflicts, inflation, and macroeconomic constraints, and is based on **management's assumptions** for new confirmations, projects, assignments, consultant productivity, and retention[14](index=14&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) Heidrick & Struggles achieved significant consolidated net revenue growth and improved profitability in both Q2 and H1 2025, driven by all business segments [Q2 2025 Consolidated Performance](index=2&type=section&id=Q2%202025%20Consolidated%20Performance) Heidrick & Struggles achieved significant consolidated net revenue growth in Q2 2025, driven by all business segments, with a substantial increase in net income and adjusted EBITDA, and improved margins Q2 2025 Consolidated Financial Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net Revenue | $317.2M | $278.6M | +13.9% | | Net Income | $21.1M | ($5.2M) | NM | | Diluted EPS | $0.99 | ($0.25) | NM | | Adjusted Net Income | $18.1M | $14.1M | +28.4% | | Adjusted Diluted EPS | $0.85 | $0.67 | +26.9% | | Adjusted EBITDA | $33.9M | $28.8M | +17.7% | | Adjusted EBITDA Margin | 10.7% | 10.3% | +0.4 pp | | Operating Income | $25.2M | ($4.2M) | NM | - The increase in consolidated net revenue was driven by **year-over-year growth across all business lines**: Executive Search, On-Demand Talent, and Heidrick Consulting[6](index=6&type=chunk) - Q2 2025 net income included acquisition-related earnout and contingent compensation fair value adjustments of **$4.4 million**[7](index=7&type=chunk) [H1 2025 Consolidated Performance](index=8&type=section&id=H1%202025%20Consolidated%20Performance) For the first half of 2025, Heidrick & Struggles reported strong consolidated net revenue growth and a significant increase in net income and diluted EPS compared to the prior year H1 2025 Consolidated Financial Performance | Metric | H1 2025 | H1 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Net Revenue | $600.8M | $543.8M | +10.5% | | Net Income | $34.4M | $8.9M | +286.5% | | Diluted EPS | $1.61 | $0.42 | +283.3% | | Operating Income | $41.5M | $12.1M | +242.9% | | Adjusted EBITDA | $63.0M | $54.7M | +15.2% | | Adjusted EBITDA Margin | 10.5% | 10.1% | +0.4 pp | - Salaries and benefits as a percentage of net revenue **increased to 66.4% in H1 2025 from 64.8% in H1 2024**[31](index=31&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) All business segments demonstrated robust revenue growth in Q2 and H1 2025, with On-Demand Talent and Heidrick Consulting showing significant profitability improvements [Executive Search](index=3&type=section&id=Executive%20Search) The Executive Search segment demonstrated robust revenue growth in both Q2 and H1 2025, with strong performance across all regions, although its Adjusted EBITDA margin saw a slight decrease in Q2 Executive Search Segment Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | H1 2025 | H1 2024 | Change (YoY) | | :----------------------- | :------ | :------ | :----------- | :------ | :------ | :----------- | | Net Revenue | $238.2M | $210.0M | +13.4% | $451.6M | $411.4M | +9.7% | | Adjusted EBITDA | $54.6M | $52.7M | +3.5% | $106.8M | $101.1M | +5.7% | | Adjusted EBITDA Margin | 22.9% | 25.1% | -2.2 pp | 23.7% | 24.6% | -0.9 pp | - Q2 2025 Executive Search revenue growth was driven by increases in all regions: Americas (**+8.9%**), Europe (**+30.9%**), and Asia Pacific (**+12.0%**)[9](index=9&type=chunk) [On-Demand Talent](index=3&type=section&id=On-Demand%20Talent) The On-Demand Talent segment experienced strong revenue growth and a significant turnaround in profitability, moving from an Adjusted EBITDA loss in the prior year to positive Adjusted EBITDA in both Q2 and H1 2025 On-Demand Talent Segment Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | H1 2025 | H1 2024 | Change (YoY) | | :----------------------- | :------ | :------ | :----------- | :------ | :------ | :----------- | | Net Revenue | $47.9M | $41.9M | +14.3% | $90.4M | $79.8M | +13.4% | | Adjusted EBITDA | $1.0M | ($1.6M) | +163.1% | $1.4M | ($2.6M) | +156.0% | | Adjusted EBITDA Margin | 2.1% | (3.9)% | +6.0 pp | 1.6% | (3.2)% | +4.8 pp | [Heidrick Consulting](index=3&type=section&id=Heidrick%20Consulting) Heidrick Consulting also showed strong revenue growth and a notable improvement in profitability, shifting from an Adjusted EBITDA loss in the prior year to positive Adjusted EBITDA in Q2 2025, though remaining negative for H1 2025 Heidrick Consulting Segment Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | H1 2025 | H1 2024 | Change (YoY) | | :----------------------- | :------ | :------ | :----------- | :------ | :------ | :----------- | | Net Revenue | $31.2M | $26.8M | +16.6% | $58.8M | $52.6M | +11.8% | | Adjusted EBITDA | $0.6M | ($1.4M) | +139.8% | ($1.5M) | ($3.4M) | +55.0% | | Adjusted EBITDA Margin | 1.8% | (5.2)% | +7.0 pp | (2.6)% | (6.5)% | +3.9 pp | [Financial Statements](index=6&type=section&id=Financial%20Statements) Detailed financial statements for Q2 and H1 2025 show strong revenue, improved net income, and changes in cash flow and balance sheet items [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The consolidated statements of comprehensive income (loss) provide detailed revenue, operating expenses, and net income figures for the three and six months ended June 30, 2025, compared to the prior year periods - For the three months ended June 30, 2025, total revenue was **$321.9 million**, with operating income of **$25.2 million** and net income of **$21.1 million**[27](index=27&type=chunk) - For the six months ended June 30, 2025, total revenue was **$609.4 million**, with operating income of **$41.5 million** and net income of **$34.4 million**[31](index=31&type=chunk) - Significant changes in operating expenses for Q2 2025 include a **17.6% increase in salaries and benefits** and a **9.2% decrease in general and administrative expenses**, alongside the absence of impairment and restructuring charges present in Q2 2024[27](index=27&type=chunk) [Consolidated Balance Sheets](index=11&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets present the company's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Total Assets | $1,141.0M | $1,194.2M | | Total Liabilities | $648.6M | $741.4M | | Stockholders' Equity | $492.5M | $452.8M | | Cash and Cash Equivalents | $211.2M | $515.6M | | Marketable Securities | $188.4M | $47.9M | | Accounts Receivable, net | $210.6M | $134.3M | | Accrued Salaries and Benefits (Current) | $251.7M | $353.5M | - Cash and cash equivalents **decreased significantly from $515.6 million** at December 31, 2024, to **$211.2 million** at June 30, 2025, while marketable securities **increased from $47.9 million to $188.4 million**[37](index=37&type=chunk) - Total liabilities **decreased by approximately $92.8 million**, primarily due to a reduction in accrued salaries and benefits[37](index=37&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows detail the cash generated from or used in operating, investing, and financing activities for the three and six months ended June 30, 2025, and 2024 Cash Flow Highlights (Three Months Ended June 30) | Activity | Q2 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | | Net Cash from Operating Activities | $68.6M | $62.5M | | Net Cash Used in Investing Activities | ($77.3M) | ($119.9M) | | Net Cash Used in Financing Activities | ($4.1M) | ($4.1M) | | Net Decrease in Cash | ($0.7M) | ($62.9M) | Cash Flow Highlights (Six Months Ended June 30) | Activity | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | | Net Cash Used in Operating Activities | ($163.6M) | ($140.9M) | | Net Cash Used in Investing Activities | ($150.4M) | ($65.2M) | | Net Cash Used in Financing Activities | ($10.6M) | ($10.1M) | | Net Decrease in Cash | ($304.4M) | ($222.7M) | - The significant increase in net cash used in investing activities for H1 2025 was primarily due to **higher purchases of marketable securities and investments ($296.2 million vs. $115.3 million in H1 2024)**[41](index=41&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) The company provides non-GAAP financial measures like Adjusted Net Income and Adjusted EBITDA to offer additional insights into its financial performance and comparability [Non-GAAP Definitions](index=4&type=section&id=Non-GAAP%20Definitions) Heidrick & Struggles utilizes several non-GAAP financial measures, including adjusted net income, adjusted diluted earnings per share, adjusted EBITDA, adjusted EBITDA margin, and net revenue excluding the impact of exchange rate fluctuations (constant currency), to provide additional insights into its financial performance - **Non-GAAP financial measures** are used by management to monitor and evaluate financial results and allocate resources, and are considered **useful for investors to evaluate comparability of financial information**[18](index=18&type=chunk) - **Adjusted net income and adjusted diluted EPS** exclude goodwill impairment, restructuring charges, and earnout and acquisition contingent compensation fair value adjustments, net of tax[19](index=19&type=chunk) - **Adjusted EBITDA** refers to net income before interest, taxes, depreciation, and amortization, adjusted for earnout accretion, earnout fair value adjustments, contingent compensation, deferred compensation plan income/expense, reorganization costs, impairment charges, and restructuring charges[20](index=20&type=chunk) [Adjusted Net Income Reconciliation](index=10&type=section&id=Adjusted%20Net%20Income%20Reconciliation) The reconciliation of net income (loss) to adjusted net income details the specific adjustments made for non-GAAP reporting, primarily related to acquisition-related earnout and contingent compensation, impairment charges, and restructuring charges Adjusted Net Income Reconciliation (Q2 & H1 2025) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :---------------------------------------------------------------- | :------ | :------ | :------ | :------ | | Net Income (Loss) | $21,073 | ($5,157) | $34,379 | $8,875 | | Adjustments (Acquisition earnout/contingent comp, impairment, restructuring) | ($2,980) | $19,230 | ($2,095) | $19,230 | | Adjusted Net Income | $18,093 | $14,073 | $32,284 | $28,105 | | Adjusted Diluted EPS | $0.85 | $0.67 | $1.51 | $1.33 | - In Q2 2025, adjustments primarily involved a **negative adjustment for acquisition-related earnout and contingent compensation fair value**, contrasting with **significant positive adjustments in Q2 2024 due to impairment and restructuring charges**[35](index=35&type=chunk) [Adjusted EBITDA Reconciliation](index=14&type=section&id=Adjusted%20EBITDA%20Reconciliation) Reconciliations of net income (loss) and operating income (loss) to Adjusted EBITDA are provided, detailing various non-operating and non-cash adjustments, as well as segment-specific adjustments, for both quarterly and year-to-date periods Consolidated Adjusted EBITDA Reconciliation (Q2 & H1 2025) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Net Income (Loss) | $21,073 | ($5,157) | $34,379 | $8,875 | | Operating Income (Loss) | $25,230 | ($4,183) | $41,458 | $12,091 | | Total Adjustments | $8,622 | $32,994 | $21,516 | $42,588 | | Adjusted EBITDA | $33,852 | $28,811 | $62,974 | $54,679 | | Adjusted EBITDA Margin | 10.7% | 10.3% | 10.5% | 10.1% | - Key adjustments for Adjusted EBITDA include **depreciation, intangible amortization, earnout accretion and fair value adjustments, acquisition contingent compensation, deferred compensation plan income/expense, reorganization costs, impairment charges, and restructuring charges**[43](index=43&type=chunk)[45](index=45&type=chunk)[47](index=47&type=chunk) - Segment-level Adjusted EBITDA reconciliations show that **Executive Search consistently contributes the largest portion of Adjusted EBITDA**, while **On-Demand Talent and Heidrick Consulting have significantly improved their EBITDA performance**, moving from losses to positive or reduced losses[45](index=45&type=chunk)[47](index=47&type=chunk) [Company Information & Forward-Looking Statements](index=3&type=section&id=Company%20Information%20%26%20Forward-Looking%20Statements) Heidrick & Struggles is a global leadership advisory firm, with forward-looking statements subject to various risks and contact information provided [About Heidrick & Struggles](index=3&type=section&id=About%20Heidrick%20%26%20Struggles) Heidrick & Struggles International, Inc. is a global leadership advisory firm specializing in executive leadership and human capital solutions, with over 70 years of experience in identifying and developing outstanding leaders and teams - Heidrick & Struggles (Nasdaq: HSII) is a **premier provider of global leadership advisory and on-demand talent solutions**[2](index=2&type=chunk)[16](index=16&type=chunk) - For **over 70 years**, the company has focused on **driving superior client performance** by leveraging expertise to help organizations discover and enable outstanding leaders and teams[16](index=16&type=chunk) [Safe Harbor Statement](index=4&type=section&id=Safe%20Harbor%20Statement) The safe harbor statement clarifies that the press release contains forward-looking statements based on current expectations and assumptions, which are subject to various known and unknown risks and uncertainties that could cause actual results to differ materially - **Forward-looking statements** are identified by words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' 'outlook,' 'projects,' 'forecasts,' 'aim' and similar expressions[23](index=23&type=chunk) - Key risk factors include the **ability to attract and retain qualified consultants**, maintaining professional reputation, reliance on information systems, data security and privacy concerns, macroeconomic conditions, aggressive competition, foreign currency fluctuations, and geopolitical instability[23](index=23&type=chunk)[24](index=24&type=chunk) - The company undertakes **no obligation to update publicly any forward-looking statements**[24](index=24&type=chunk) [Contacts](index=5&type=section&id=Contacts) Contact information for investor relations and media inquiries is provided - Investors & Analysts contact: **Vance Edelson (Vance.Edelson@icrinc.com)**[25](index=25&type=chunk) - Media contact: **Bianca Wilson, Global Director, Public Relations (bwilson@heidrick.com)**[25](index=25&type=chunk)

Core Insights - Heidrick & Struggles International, Inc. reported strong financial results for Q2 2025, with consolidated net revenue exceeding the high end of the outlook, driven by growth across all business segments [1][4][8] Financial Performance - Q2 2025 consolidated net revenue reached $317.2 million, a 13.9% increase from $278.6 million in Q2 2024 [4][25] - Adjusted EBITDA for Q2 2025 was $33.9 million, up from $28.8 million in Q2 2024, with an adjusted EBITDA margin of 10.7% compared to 10.3% in the prior year [6][8] - Adjusted net income for Q2 2025 was $18.1 million, an increase from $14.1 million in Q2 2024, resulting in adjusted diluted earnings per share of $0.85, up from $0.67 [5][8] Segment Performance - Executive Search segment net revenue was $238.2 million in Q2 2025, a 13.4% increase from $210.0 million in Q2 2024 [7][27] - On-Demand Talent segment net revenue increased by 14.3% to $47.9 million compared to $41.9 million in Q2 2024 [10][27] - Heidrick Consulting segment net revenue rose by 16.6% to $31.2 million from $26.8 million in the same period last year [11][27] Regional Performance - Revenue growth was observed across all regions: Americas up 8.9%, Europe up 30.9%, and Asia Pacific up 12.0% compared to Q2 2024 [9][27] Dividend Declaration - The Board of Directors declared a cash dividend of $0.15 per share for Q3 2025, payable on August 28, 2025 [13]

Industry Overview - The Zacks Staffing industry encompasses a wide range of human resources and workforce solutions, including recruitment, payroll administration, and organizational consulting services tailored for various sectors [2] - The industry is currently facing challenges due to a contraction in the manufacturing sector, which negatively impacts the demand for temporary workers [3] Current Trends - The staffing industry is expected to recover to pre-pandemic revenues, income, and cash flows despite the ongoing contraction in manufacturing [3] - There is an increased adoption of remote work and hybrid models, prompting staffing agencies to prioritize flexible staffing solutions to meet evolving workplace preferences [4] - Technology is increasingly being utilized in the staffing sector to enhance operations, with AI-driven tools and platforms improving the efficiency of attracting and onboarding talent [5] Market Performance - The Zacks Staffing Firms industry has underperformed compared to the broader sector and the S&P 500, declining 32% over the past year, while the S&P 500 grew by 15.9% [8] - The industry currently trades at an EV-to-EBITDA ratio of 6.53X, significantly lower than the S&P 500's 18.03X and the sector's 11.37X [11] Company Highlights - **Korn Ferry (KFY)**: This firm is leveraging its broad array of solutions and large-scale client engagements, with a focus on technology and AI investments. KFY's digital subscription and license business is enhancing revenue stability [14][15] KFY has a Zacks Rank 3 and a consensus estimate for its 2025 bottom line at $5.16, reflecting an 11% increase over the past 60 days [17] - **RCM Technologies (RCMT)**: RCMT is transitioning into an innovative company with a strong growth narrative in its healthcare segment, particularly in K-12 behavioral health. The company is also expanding in life sciences and engineering, supported by multi-year contracts [20][22] RCMT holds a Zacks Rank 3 with a consensus estimate for its 2025 bottom line at $2.2 [22] - **Heidrick & Struggles International (HSII)**: HSII focuses on value creation through effective leadership placement, supported by a diversified revenue model and zero debt. The company has a Zacks Rank 3 and a consensus estimate for 2025 EPS at $2.86 [25][27]

Core Insights - Heidrick & Struggles International, Inc. will host its quarterly conference call to discuss the financial results for the second quarter of 2025 on August 4, 2025, at 5:00 PM ET [1] - The conference call will be accessible via live webcast on the company's investor relations website, and a replay will be available approximately two hours after the call [2] - Heidrick & Struggles has over 70 years of experience in providing leadership advisory services, focusing on enhancing client performance through human capital leadership [3]

Core Insights - The article emphasizes the investment philosophy focused on small cap companies, highlighting the importance of identifying mispriced securities through understanding financial drivers and utilizing DCF model valuation [1]. Group 1 - The investment strategy is not confined to traditional categories such as value, dividend, or growth investing, but rather considers all prospects of a stock to assess risk-to-reward [1].

Core Insights - Heidrick & Struggles International, Inc. announced participation in the Needham Technology, Media, & Consumer 1x1 Conference on May 12, 2025, with CEO Tom Monahan and CFO Nirupam Sinha hosting meetings throughout the day [1] Company Overview - Heidrick & Struggles is a leading provider of global leadership advisory and on-demand talent solutions, recognized as the world's foremost advisor on executive leadership [2] - The company has over 70 years of experience in delivering value to clients by leveraging expertise to help organizations discover and enable outstanding leaders and teams [2]

Financial Performance - Heidrick & Struggles reported quarterly net revenue of $283.6 million, which on a constant currency basis, was $286.8 million for the first quarter[26] - The company's adjusted EBITDA was $29.1 million with an adjusted EBITDA margin of 10.3% for the first quarter[26] - Net income for the first quarter was $13.3 million, with an adjusted net income of $14.2 million[26] - Diluted earnings per share were $0.62 for the first quarter, and adjusted diluted earnings per share were $0.67[26] Segment Performance - Executive Search experienced a 5.9% year-over-year revenue growth, or 7.0% on a constant currency basis, with an adjusted EBITDA margin of 24.5%[30] - On-Demand Talent saw a 12.4% year-over-year revenue growth, or 14.3% on a constant currency basis, with an adjusted EBITDA margin of 0.9%[30] - Heidrick Consulting's revenue grew by 6.8% year-over-year, or 7.8% on a constant currency basis, with an adjusted EBITDA margin loss of 7.6%[30] Operational Highlights - Executive Search saw a 1% year-over-year increase in consultant headcount and a 5% year-over-year increase in confirmation volume[54] - Available cash and marketable securities for the quarter ending March 31, 2025, were $232.2 million[59] Strategic Focus - The company is targeting 'through cycle' consolidated organic revenue growth of 4-6% and organic adjusted EBITDA growth of 5-8% per year[23]

Core Viewpoint - Heidrick & Struggles (HSII) reported quarterly earnings of $0.67 per share, matching the Zacks Consensus Estimate, with revenues of $283.58 million, exceeding expectations by 6.04% [1][2] Financial Performance - Earnings per share (EPS) for the quarter were $0.67, unchanged from the previous year, and the company has surpassed consensus EPS estimates three times in the last four quarters [1] - Revenues for the quarter were $283.58 million, compared to $265.2 million a year ago, and the company has topped consensus revenue estimates four times over the last four quarters [2] Market Performance - Heidrick & Struggles shares have declined approximately 10.4% since the beginning of the year, while the S&P 500 has decreased by 3.3% [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 current consensus EPS estimate for the upcoming quarter is $0.70, with expected revenues of $278.07 million, and for the current fiscal year, the EPS estimate is $2.69 on revenues of $1.09 billion [7] - The staffing industry, to which Heidrick & Struggles belongs, is currently ranked in the bottom 9% of Zacks industries, which may impact stock performance [8]

Financial Data and Key Metrics Changes - First quarter revenue reached approximately $284 million, marking a 7% increase compared to Q1 2024 [19] - Adjusted EBITDA improved by $3.3 million to $29.1 million, with an adjusted EBITDA margin expanding by 50 basis points to 10.3% [19] - Adjusted net income for the quarter was $14.2 million, consistent with the previous year [26] Business Line Data and Key Metrics Changes - Executive Search revenue grew 6% to $213 million, with adjusted EBITDA of $52.3 million and an adjusted EBITDA margin of 24.5% [22] - On Demand Talent revenue increased 12% to $43 million, achieving adjusted EBITDA of $400,000 compared to a loss of $900,000 in the prior year [24] - Heidrick Consulting saw organic revenue increase 7% year-over-year to $28 million, with an adjusted EBITDA loss of $2.1 million [25] Market Data and Key Metrics Changes - Revenue increases were noted across regions: 6% in The Americas, 9% in Europe, and 1% in APAC [22] - European performance was strong across various sectors, including technology, financial services, and industrials [62] Company Strategy and Development Direction - The company aims to be the most trusted leadership partner for the C-suite and board, focusing on leadership talent [10] - There is a commitment to growing executive search and assessment capabilities, which are central to the business [11] - The strategy includes continuous client engagement and innovation in products and services to meet evolving client needs [16][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current economic environment's complexity but emphasizes the company's resilience and ability to create value for clients [5][18] - The company is closely monitoring client activities and tone, anticipating potential caution in decision-making as the year progresses [8][36] - The outlook for Q2 revenue is expected to be between $285 million and $305 million, reflecting ongoing demand despite economic uncertainties [27] Other Important Information - The company ended the first quarter with a strong cash position of $325 million, up from $253 million in March 2024 [26] - The business model is characterized by zero debt, low capital expenditure, and a diversified revenue stream across geographies and industries [9] Q&A Session Summary Question: Insights on past disruptions and their relevance to current circumstances - Management noted that while segments may slow during economic distress, current results do not reflect such trends, emphasizing the unique nature of each downturn [33][34] Question: Use of cash and acquisition pipeline - The company is managing cash flow for earn-out payments from past acquisitions while prioritizing organic investments and evaluating potential acquisition opportunities [37][38] Question: M&A activity as a driver of client demand - M&A activities create opportunities for the company to assist clients in leadership and cultural integration during transitions [42][43] Question: Profitability expectations for Heidrick Consulting and On Demand Talent - Both segments are expected to improve profitability, with consulting aiming for 11% to 13% growth and on-demand talent showing positive momentum [66] Question: Demand trends among different end markets - Demand has been broad-based across sectors, with financial services performing well alongside technology and consumer markets [70]

Financial Data and Key Metrics Changes - First quarter revenue reached approximately $284 million, marking a 7% increase compared to Q1 2024 [22] - Adjusted EBITDA improved by $3.3 million to $29.1 million, with an adjusted EBITDA margin expanding by 50 basis points to 10.3% [22] - Adjusted net income for the quarter was $14.2 million, consistent with the previous year [28] Business Line Data and Key Metrics Changes - Executive Search revenue grew 6% to $213 million, with adjusted EBITDA of $52.3 million and an adjusted EBITDA margin of 24.5% [25][26] - On Demand Talent revenue increased 12% to $43 million, achieving adjusted EBITDA of $400,000 compared to a loss of $900,000 in the prior year [26] - Heidrick Consulting saw organic revenue increase 7% year over year to $28 million, but recorded an adjusted EBITDA loss of $2.1 million [27] Market Data and Key Metrics Changes - Revenue increases in Executive Search were noted across regions: 6% in The Americas, 9% in Europe, and 1% in APAC [25] - European performance was strong across various sectors, including technology, financial services, and industrials [62] Company Strategy and Development Direction - The company aims to be the most trusted leadership partner for the C-suite and board, focusing on leadership talent [12] - There is a commitment to grow executive search and assessment capabilities, which are seen as cornerstones of the enterprise [13] - The strategy includes staying close to clients and adapting to their changing needs, particularly in times of economic uncertainty [10][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current tumultuous operating environment but emphasized strong results and resilience [4][5] - There is a recognition that client caution may affect decision-making in the second half of the year [8] - The company remains confident in its ability to navigate the evolving landscape and drive long-term value for shareholders [30] Other Important Information - The company ended the first quarter with a strong cash position of $325 million, up from $253 million in March 2024 [28] - The second quarter revenue is expected to be within the range of $285 million to $305 million, compared to $279 million in Q2 2024 [29] Q&A Session Summary Question: Insights on past disruptions and their relevance to current circumstances - Management noted that while segments may slow during economic distress, they are not currently seeing this impact [35] - They highlighted the importance of their business attributes, such as no debt and a diversified business mix, in weathering economic storms [36][38] Question: Thoughts on cash usage and acquisition pipeline - Management indicated that cash flow is being managed to pay out earn-out payments from past acquisitions, while also prioritizing organic investments [40][41] Question: Trends in M&A activity and its impact on client demand - M&A activity creates opportunities for the company to engage with clients on leadership and cultural integration [45][46] Question: Profitability expectations for Heidrick Consulting and On Demand Talent - Management expects both segments to move towards profitability, with long-term guidance remaining intact [68] Question: Demand trends among different end markets, particularly financial services - Demand has been broad-based across sectors, with financial services performing well [73]