Heidrick & Struggles(HSII) - 2025 Q1 - Quarterly Results

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]