Heidrick & Struggles Posts 9% Revenue Growth in Q4 with Strong Profitability

Rhea-AI Summary

Heidrick & Struggles (NASDAQ: HSII) reported strong Q4 2024 financial results with net revenue of $276.2 million, up 9.1% year-over-year. The company achieved full-year revenue of $1,098.6 million, representing a 7% increase from 2023.

Q4 performance highlights include adjusted net income of $22.9 million and adjusted diluted EPS of $1.08. However, the quarter saw a $43.3 million non-cash goodwill impairment charge related to the On-Demand Talent segment. All business segments contributed to growth, with Executive Search revenue up 10.1%, On-Demand Talent up 3%, and Heidrick Consulting increasing 11.5%.

The company declared a Q1 2025 dividend of $0.15 per share and provided revenue guidance of $263-273 million for Q1 2025. The adjusted EBITDA for Q4 2024 was $26.1 million with a 9.5% margin, while full-year adjusted EBITDA reached $111.2 million with a 10.1% margin.

Positive

• Q4 revenue grew 9.1% YoY to $276.2M
• Full-year revenue increased 7% to $1.09B
• Q4 adjusted EPS rose 50% to $1.08
• All business segments showed revenue growth
• Executive Search revenue up 10.1%

Negative

• Q4 net loss of $15M due to $43.3M goodwill impairment charge
• Q4 adjusted EBITDA margin declined to 9.5% from 14.1% YoY
• On-Demand Talent segment posted adjusted EBITDA loss of $1.2M
• Heidrick Consulting reported adjusted EBITDA loss of $1.8M
• Full-year adjusted EBITDA margin decreased to 10.1% from 12.2%

Insights

Financial Analyst

Heidrick & Struggles has delivered solid top-line performance in Q4 with $276.2 million in revenue, exceeding guidance and growing 9.1% year-over-year. Full-year revenue reached $1.1 billion, up 7% from 2023. All three business segments contributed positively, with Executive Search growing 10.1%, On-Demand Talent up 3%, and Heidrick Consulting increasing 11.5%.

While revenue growth is impressive, profitability metrics reveal mounting pressures. Q4 adjusted EBITDA fell to $26.1 million with margin compression to 9.5% from 14.1% in Q4 2023. Full-year adjusted EBITDA margin similarly contracted to 10.1% from 12.2%. This divergence between revenue growth and margin performance suggests escalating operational costs.

The $43.3 million goodwill impairment charge for the On-Demand Talent segment is particularly concerning, as this unit swung from positive EBITDA margin of 1.9% to negative 2.8%. Similarly, Heidrick Consulting shifted from positive to negative EBITDA despite revenue growth. Only Executive Search remains robustly profitable with 25% EBITDA margin, though this also declined from 29.7% year-over-year.

Q1 2025 revenue guidance of $263-273 million alongside the maintained $0.15 quarterly dividend indicates management's continued confidence in the business trajectory, but investors should closely monitor whether the company can reverse margin deterioration while maintaining revenue momentum.

Business Strategy Expert

Heidrick & Struggles' performance demonstrates a company successfully growing revenue across all business segments in a challenging market, but with emerging profitability concerns that require strategic attention. The Executive Search division, growing at 10.1%, remains the company's profit engine with 25% EBITDA margins, validating the strength of its core business and brand positioning.

The significant goodwill impairment in the On-Demand Talent segment raises questions about the execution of the company's diversification strategy. Despite 3% revenue growth, this unit's shift to negative EBITDA suggests challenges in scaling efficiently or potential mispricing of services relative to delivery costs. Similarly, the Consulting segment's impressive 11.5% revenue growth accompanied by margin deterioration indicates potential growing pains.

CEO Tom Monahan's comments about "significant opportunity for client impact in a complex, volatile world" point to a strategic posture leveraging market uncertainty to drive demand for leadership services. The company's first investor day in December signals increased emphasis on communicating long-term strategy and financial targets to shareholders.

The balanced geographic performance - Americas up 11.1%, Europe up 8.1%, and Asia Pacific up 7.6% - demonstrates effective global execution. Moving forward, the key strategic challenge will be optimizing the newer business segments to achieve the profitability levels of the core Executive Search business while maintaining the current growth trajectory.

Quarterly Revenue Exceeds High End of Outlook

All Business Segments Contribute to Top Line Growth

Financial 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 of $1.08 and full year adjusted net income was $66.1 million with adjusted diluted earnings per share of $3.12
• Q1 2025 revenue outlook between $263 million and $273 million
• The Board of Directors declared a $0.15 per share cash dividend

CHICAGO, March 3, 2025 /PRNewswire/ -- Heidrick & Struggles International, Inc. (Nasdaq: HSII) ("Heidrick & Struggles", "Heidrick" or the "Company"), a premier provider of global leadership advisory and on-demand talent solutions, today announced financial results for its fourth quarter and year ended December 31, 2024.

"We finished 2024 on a strong note, highlighted by a fourth quarter performance that exceeded our expectations," said CEO Tom Monahan. "As we move into 2025, our team is energized and focused on the significant opportunity for client impact in a complex, volatile world.  This opportunity – combined with the focus and caliber of our team – gives us great confidence that we can attain our long-term financial targets.

As we discussed at our inaugural investor day in December, we serve a large and growing market defined by urgent client needs. We've assembled a world class team and unique capabilities to meet those needs. With our iconic brand, powerful technology and valuable intellectual property, we are focused on rapidly achieving the long-term goals we shared and creating value for our clients and shareholders."

Selected Consolidated Results
(Dollars in millions, except per share amounts)
	Three Months Ended December 31,			Twelve Months Ended December 31,
	2024	2023		2024	2023
Revenue before reimbursements (net revenue)	$          276.2	$          253.2		$       1,098.6	$       1,026.9
Adjusted results (a):
Adjusted EBITDA	$            26.1	$            35.8		$          111.2	$          125.6
Adjusted EBITDA margin	9.5 %	14.1 %		10.1 %	12.2 %
Adjusted net income	$            22.9	$            14.9		$            66.1	$            60.4
Adjusted diluted earnings per share	$            1.08	$            0.72		$            3.12	$            2.91

(a) Non-GAAP financial measures. See Non-GAAP Financial Measures, Reconciliations of Net Income (Loss) and Adjusted Net Income, and Reconciliations of Operating Income (Loss) to Adjusted EBITDA at the end of this press release for more information.

2024 Fourth Quarter Results

Consolidated net revenue increased 9.1% to $276.2 million in the 2024 fourth quarter compared to consolidated net revenue of $253.2 million in the 2023 fourth quarter (up 9.3%, or $23.5 million on a constant currency basis). The revenue increase was driven by year-over-year growth in each of the Company's lines of business — Executive Search, On-Demand Talent, and Heidrick Consulting.

2024 fourth quarter net loss was $15.0 million and diluted loss per share was $0.73 which included a non-cash goodwill impairment charge of $43.3 million related to the Company's On-Demand Talent segment and an earnout fair value reduction of $0.8 million related to the Heidrick Consulting segment. Excluding these charges, 2024 fourth quarter adjusted net income increased 54.2% to $22.9 million compared to adjusted net income of $14.9 million in the 2023 fourth quarter. 2024 fourth quarter adjusted diluted earnings per share was $1.08, with an adjusted effective tax rate of 22.8% compared to adjusted diluted earnings per share of $0.72 with an effective tax rate of 40.5% in the 2023 fourth quarter. On a comparable basis, applying a 40.5% effective tax rate in the 2024 fourth quarter, adjusted diluted earnings per share increased 16.7% to $0.84 from the year-ago period.

Adjusted EBITDA was $26.1 million in the 2024 fourth quarter compared to $35.8 million in the 2023 fourth quarter, and 2024 fourth quarter adjusted EBITDA margin was 9.5% compared to 14.1% in the 2023 fourth quarter.

Fiscal 2024 Results

Consolidated net revenue increased 7.0%, or $71.7 million to $1,098.6 million compared to $1,026.9 million in 2023 (up 6.9%, or $71.4 million on a constant currency basis).

2024 net income was $8.7 million and diluted earnings per share was $0.41, which included a non-cash goodwill impairment charge of $59.5 million, a restructuring charge of $6.9 million and earnout fair value adjustments of $0.4 million. This compares to 2023 net income of $54.4 million and diluted earnings per share of $2.62, which included a non-cash goodwill impairment charge of $7.2 million. Excluding the charges in both periods, adjusted net income increased 9.4% to $66.1 million in 2024 compared to $60.4 million in 2023 and adjusted diluted earnings per share increased 7.2% to $3.12 in 2024 compared to $2.91 in 2023.

Adjusted EBITDA was $111.2 million compared to $125.6 million in the prior year. Adjusted EBITDA margin was 10.1%, compared to 12.2% in the prior year.

Selected Executive Search Data
(Dollars in millions, except Average revenue per executive search in thousands)
	Three Months Ended December 31,			Twelve Months Ended December 31,
	2024	2023		2024	2023
Revenue before reimbursements (net revenue)	$       202.5	$       184.0		$       818.4	$       780.0
Ending number of consultants	418	414		418	414
Consultant productivity	$           2.0	$           1.8		$           2.0	$           1.9
Average revenue per executive search	$          151	$          138		$          146	$          140
Confirmations (% increase/decrease)	0.5 %	4.0 %		0.1 %	(10.5) %
Adjusted results (a):
Adjusted EBITDA	$         50.5	$         54.7		$       202.4	$       206.7
Adjusted EBITDA margin	25.0 %	29.7 %		24.7 %	26.5 %

(a) Non-GAAP financial measures. See Non-GAAP Financial Measures, Reconciliations of Net Income (Loss) and Adjusted Net Income, and Reconciliations of Operating Income (Loss) to Adjusted EBITDA at the end of this press release for more information.

Executive Search net revenue was $202.5 million in the 2024 fourth quarter compared to net revenue of $184.0 million in the 2023 fourth quarter, an increase of $18.6 million, or 10.1%. The increase in revenue was driven by increases of 11.1% in the Americas (up 11.7% on a constant currency basis), 8.1% in Europe (up 7.3% on a constant currency basis), and 7.6% in Asia Pacific (up 8.0% on a constant currency basis) when compared to the prior year fourth quarter.

Adjusted EBITDA was $50.5 million in the 2024 fourth quarter compared to $54.7 million in the 2023 fourth quarter, and 2024 fourth quarter adjusted EBITDA margin was 25.0% compared to 29.7% in the 2023 fourth quarter.

Selected On-Demand Talent Data
(Dollars in millions)
	Three Months Ended December 31,			Twelve Months Ended December 31,
	2024	2023		2024	2023
Revenue before reimbursements (net revenue)	$           42.3	$           41.1		$          168.3	$          152.5
Adjusted results (a):
Adjusted EBITDA	$            (1.2)	$             0.8		$             (2.0)	$              1.4
Adjusted EBITDA margin	(2.8) %	1.9 %		(1.2) %	0.9 %

(a) Non-GAAP financial measures. See Non-GAAP Financial Measures, Reconciliations of Net Income (Loss) and Adjusted Net Income, and Reconciliations of Operating Income (Loss) to Adjusted EBITDA at the end of this press release for more information.

On-Demand Talent net revenue was $42.3 million in the 2024 fourth quarter compared to net revenue of $41.1 million in the 2023 fourth quarter, an increase of $1.2 million or 3.0% (up $1.3 million, or 3.3% on a constant currency basis).

Adjusted EBITDA loss was $1.2 million in the 2024 fourth quarter compared to a gain of $0.8 million in the 2023 fourth quarter, and Adjusted EBITDA margin was (2.8%) compared to 1.9% in the 2023 fourth quarter.   

Selected Heidrick Consulting Data
(Dollars in millions)
	Three Months Ended December 31,			Twelve Months Ended December 31,
	2024	2023		2024	2023
Revenue before reimbursements (net revenue)	$           31.3	$           28.1		$          111.9	$           94.3
Ending number of consultants	85	89		85	89
Adjusted results (a):
Adjusted EBITDA	$            (1.8)	$             1.0		$            (6.2)	$            (5.8)
Adjusted EBITDA margin	(5.7) %	3.6 %		(5.6) %	(6.2) %

(a) Non-GAAP financial measures. See Non-GAAP Financial Measures, Reconciliations of Net Income (Loss) and Adjusted Net Income, and Reconciliations of Operating Income (Loss) to Adjusted EBITDA at the end of this press release for more information.

Heidrick Consulting net revenue was $31.3 million in the 2024 fourth quarter compared to net revenue of $28.1 million in the 2023 fourth quarter, an increase of $3.2 million or 11.5% (up $3.1 million, or 11.0% on a constant currency basis).

Adjusted EBITDA loss was $1.8 million in the 2024 fourth quarter compared to a gain of $1.0 million in the 2023 fourth quarter, and Adjusted EBITDA margin was (5.7%) compared to 3.6% in the 2023 fourth quarter.

Dividend

The Board of Directors declared a 2025 first quarter cash dividend of $0.15 per share payable on March 27, 2025, to shareholders of record at the close of business on March 13, 2025.  

2025 First Quarter Outlook

The Company expects 2025 first quarter consolidated net revenue of between $263 million and $273 million, which may be impacted by external factors, such as the foreign exchange and interest rate environments, foreign conflicts, inflation and macroeconomic constraints on pricing actions. In addition, this outlook is based on the average currency rates in December 2024 and reflects, among other factors, management's assumptions for the anticipated volume of new Executive Search confirmations, On-Demand Talent projects, and Heidrick Consulting assignments, consultant productivity, and consultant retention along with the current backlog.

Quarterly Webcast and Conference Call

Heidrick & Struggles will host a conference call to review its fourth quarter results today, March 3, 2025, at 5:00 pm Eastern Time. Participants may access the Company's call and supporting slides through its website at http://www.heidrick.com or by dialing (800) 715-9871 or (646) 307-1963, conference ID# 4805686. For those unable to participate on the live call, a webcast and copy of the slides will be archived at http://www.heidrick.com and available for up to 30 days following the investor call.  

About Heidrick & Struggles International, Inc.

Heidrick & Struggles (Nasdaq: HSII) is the world's foremost advisor on executive leadership, driving superior client performance through premier human capital leadership advisory services. For more than 70 years, we've delivered value for our clients by leveraging unrivaled expertise to help organizations discover and enable outstanding leaders and teams. Learn more at www.heidrick.com.

Non-GAAP Financial Measures

To supplement the financial results presented in accordance with generally accepted accounting principles in the United States ("GAAP"), Heidrick & Struggles presents certain non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance that excludes or includes amounts different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of comprehensive income, balance sheets or statements of cash flow of the Company.

Non-GAAP financial measures used within this earnings release are adjusted net income, adjusted diluted earnings per share, adjusted effective tax rate, adjusted EBITDA, adjusted EBITDA margin, and net revenue excluding the impact of exchange rate fluctuations (referred to as constant currency). These measures are presented because management uses this information to monitor and evaluate financial results and allocate resources. Management believes this information is also useful for investors to evaluate the comparability of financial information presented. Reconciliations of these non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with GAAP are provided as schedules attached to this release.

Adjusted net income and adjusted diluted earnings per share are net income and diluted earnings per share excluding goodwill impairment, restructuring charges and earnout fair value adjustments, net of tax.

Adjusted effective tax rate is effective tax rate excluding goodwill impairment, restructuring charges and earnout fair value adjustments, net of tax.

Adjusted EBITDA refers to net income before interest, taxes, depreciation and amortization, as adjusted, to the extent they occur, for earnout accretion, earnout fair value adjustments, contingent compensation, deferred compensation plan income or expense, certain reorganization costs, impairment charges and restructuring charges

Adjusted EBITDA margin refers to adjusted EBITDA as a percentage of net revenue in the same period.   

The Company evaluates its results of operations on both an as reported and a constant currency basis. The constant currency presentation is a non-GAAP financial measure, which excludes the impact of fluctuations in foreign currency exchange rates. The Company believes providing constant currency information provides valuable supplemental information regarding its results of operations, consistent with how it evaluates its performance. The Company calculates constant currency percentages by converting its financial results in a local currency for a period using the average exchange rate for the prior period to which it is comparing. This calculation may differ from similarly titled measures used by other companies.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the federal securities laws, including statements regarding guidance for the first quarter of 2025. The forward-looking statements are based on current expectations, estimates, forecasts, and projections about the industry in which we operate and management's beliefs and assumptions. Forward-looking statements may be identified by the use of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "outlook," "projects," "forecasts," "aim" and similar expressions. Forward-looking statements are not guarantees of future performance, rely on a number of assumptions, and involve certain known and unknown risks and uncertainties that are difficult to predict, many of which are beyond our control. Factors that may cause actual outcomes and results to differ materially from what is expressed, forecasted or implied in the forward-looking statements include, among other things, our ability to attract, integrate, develop, manage, retain and motivate qualified consultants and senior leaders; our ability to prevent our consultants from taking our clients with them to another firm; our ability to maintain our professional reputation and brand name; our clients' ability to restrict us from recruiting their employees; our heavy reliance on information management systems; risks arising from our implementation of new technology and intellectual property to deliver new products and services to our clients; our dependence on third parties for the execution of certain critical functions; the fact that we face the risk of liability in the services we perform; the fact that data security, data privacy and data protection laws and other evolving regulations and cross-border data transfer restrictions may limit the use of our services and adversely affect our business; any challenges to the classification of our on-demand talent as independent contractors; the fact that increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted cyber-related attacks could pose a risk to our systems, networks, solutions, services and data; the fact that our net revenue may be affected by adverse macroeconomic or labor market conditions, including impacts of inflation and effects of geopolitical instability; the aggressive competition we face; the impact of foreign currency exchange rate fluctuations; our ability to access additional credit; social, political, regulatory, legal and economic risks in markets where we operate, including the impact of the ongoing war in Ukraine and the conflict in Israel and the Gaza strip, the risks of an expansion or escalation of those conflicts and our ability to quickly and completely recover from any disruption to our business; the impact from actions by the new U.S. presidential administration and Congress; unfavorable tax law changes and tax authority rulings; our ability to realize the benefit of our net deferred tax assets; the fact that we may not be able to align our cost structure with net revenue; any impairment of our goodwill, other intangible assets and other long-lived assets; our ability to maintain an effective system of disclosure controls and internal control over our financial reporting and produce accurate and timely financial statements; our ability to execute and integrate future acquisitions; and the fact that we have anti-takeover provisions that make an acquisition of us difficult and expensive. We caution the reader that the list of factors may not be exhaustive. For more information on these risks, uncertainties and other factors, refer to our Annual Report on Form 10-K for the year ended December 31, 2024, under the heading "Risk Factors" in Item 1A. The forward-looking statements contained in this press release speak only as of the date of this press release. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Contacts:

Investors & Analysts:
Suzanne Rosenberg, Vice President, Investor Relations
srosenberg@heidrick.com 

Media:
Bianca Wilson, Global Director, Public Relations
bwilson@heidrick.com 

 

Heidrick & Struggles International, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands, except per share amounts)
(Unaudited)
	Three Months Ended December 31,
	2024		2023		$ Change		% Change
Revenue
Revenue before reimbursements (net revenue)	$   276,191		$   253,162		$        23,029		9.1 %
Reimbursements	4,695		4,228		467		11.0 %
Total revenue	280,886		257,390		23,496		9.1 %
Operating expenses
Salaries and benefits	180,298		151,036		29,262		19.4 %
General and administrative expenses	39,439		44,089		(4,650)		(10.5) %
Cost of services	30,792		30,221		571		1.9 %
Research and development	6,053		5,952		101		1.7 %
Impairment charges	43,254		—		43,254		NM
Reimbursed expenses	4,695		4,228		467		11.0 %
Total operating expenses	304,531		235,526		69,005		29.3 %
Operating income (loss)	(23,645)		21,864		(45,509)		NM
Non-operating income (loss)
Interest, net	5,154		3,950
Other, net	5,689		(840)
Net non-operating income	10,843		3,110
Income (loss) before income taxes	(12,802)		24,974
Provision for income taxes	2,174		10,119
Net income (loss)	(14,976)		14,855
Other comprehensive income, net of tax	(14,985)		7,951
Comprehensive income (loss)	$    (29,961)		$     22,806
Weighted-average common shares outstanding
Basic	20,409		20,122
Diluted	21,125		20,670
Earnings (loss) per common share
Basic	$        (0.73)		$         0.74
Diluted	$        (0.73)		$         0.72
Salaries and benefits as a % of net revenue	65.3 %		59.7 %
General and administrative expenses as a % of net revenue	14.3 %		17.4 %
Cost of services as a % of net revenue	11.1 %		11.9 %
Research and development as a % of net revenue	2.2 %		2.4 %
Operating margin	(8.6) %		8.6 %

 

Heidrick & Struggles International, Inc.
Segment Information
(In thousands)
(Unaudited)
	Three Months Ended December 31,
	2024		2023		$ Change		% Change		2024 Margin1		2023 Margin1
Revenue
Executive Search
Americas	$ 138,642		$ 124,778		$ 13,864		11.1 %
Europe	40,312		37,275		3,037		8.1 %
Asia Pacific	23,567		21,912		1,655		7.6 %
Total Executive Search	202,521		183,965		18,556		10.1 %
On-Demand Talent	42,342		41,096		1,246		3.0 %
Heidrick Consulting	31,328		28,101		3,227		11.5 %
Revenue before reimbursements (net revenue)	276,191		253,162		23,029		9.1 %
Reimbursements	4,695		4,228		467		11.0 %
Total revenue	$ 280,886		$ 257,390		$ 23,496		9.1 %
Adjusted EBITDA
Executive Search
Americas	$   43,812		$   45,801		$  (1,989)		(4.3) %		31.6 %		36.7 %
Europe	3,578		5,759		(2,181)		(37.9) %		8.9 %		15.5 %
Asia Pacific	3,145		3,169		(24)		(0.8) %		13.3 %		14.5 %
Total Executive Search	50,535		54,729		(4,194)		(7.7) %		25.0 %		29.7 %
On-Demand Talent	(1,197)		774		(1,971)		NM		(2.8) %		1.9 %
Heidrick Consulting	(1,790)		1,025		(2,815)		NM		(5.7) %		3.6 %
Total segments	47,548		56,528		(8,980)		(15.9) %		17.2 %		22.3 %
Research and Development	(4,704)		(5,139)		435		8.5 %		(1.7) %		(2.0) %
Global Operations Support	(16,700)		(15,632)		(1,068)		(6.8) %		(6.0) %		(6.2) %
Total Adjusted EBITDA	$   26,144		$   35,757		$  (9,613)		(26.9) %		9.5 %		14.1 %

1	Margin based on revenue before reimbursements (net revenue).

 

Heidrick & Struggles International, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands, except per share amounts)
(Unaudited)
	Twelve Months Ended December 31,
	2024		2023		$ Change		% Change
Revenue
Revenue before reimbursements (net revenue)	$ 1,098,573		$ 1,026,864		$        71,709		7.0 %
Reimbursements	17,103		14,318		2,785		19.5 %
Total revenue	1,115,676		1,041,182		74,494		7.2 %
Operating expenses
Salaries and benefits	715,628		656,030		59,598		9.1 %
General and administrative expenses	166,995		156,494		10,501		6.7 %
Cost of services	118,950		109,039		9,911		9.1 %
Research and development	23,055		22,698		357		1.6 %
Impairment charges	59,478		7,246		52,232		NM
Restructuring charges	6,939		—		6,939		100.0 %
Reimbursed expenses	17,103		14,318		2,785		19.5 %
Total operating expenses	1,108,148		965,825		142,323		14.7 %
Operating income	7,528		75,357		(67,829)		(90.0) %
Non-operating income
Interest, net	14,422		11,617
Other, net	8,702		1,697
Net non-operating income	23,124		13,314
Income before income taxes	30,652		88,671
Provision for income taxes	21,924		34,261
Net income	8,728		54,410
Other comprehensive income (loss), net of tax	(14,174)		4,318
Comprehensive income (loss)	$       (5,446)		$      58,728
Weighted-average common shares outstanding
Basic	20,293		20,029
Diluted	21,188		20,766
Earnings per common share
Basic	$          0.43		$          2.72
Diluted	$          0.41		$          2.62
Salaries and benefits as a % of net revenue	65.1 %		63.9 %
General and administrative expenses as a % of net revenue	15.2 %		15.2 %
Cost of services as a % of net revenue	10.8 %		10.6 %
Research and development as a % of net revenue	2.1 %		2.2 %
Operating margin	0.7 %		7.3 %

 

Heidrick & Struggles International, Inc.
Segment Information
(In thousands)
(Unaudited)
	Twelve Months Ended December 31,
	2024		2023		$ Change		% Change		2024 Margin1		2023 Margin1
Revenue
Executive Search
Americas	$     556,944		$     522,988		$    33,956		6.5 %
Europe	165,018		166,379		(1,361)		(0.8) %
Asia Pacific	96,396		90,678		5,718		6.3 %
Total Executive Search	818,358		780,045		38,313		4.9 %
On-Demand Talent	168,325		152,506		15,819		10.4 %
Heidrick Consulting	111,890		94,313		17,577		18.6 %
Revenue before reimbursements (net revenue)	1,098,573		1,026,864		71,709		7.0 %
Reimbursements	17,103		14,318		2,785		19.5 %
Total revenue	$  1,115,676		$  1,041,182		$    74,494		7.2 %
Adjusted EBITDA
Executive Search
Americas	$     174,260		$     173,358		$         902		0.5 %		31.3 %		33.1 %
Europe	14,793		22,246		(7,453)		(33.5) %		9.0 %		13.4 %
Asia Pacific	13,327		11,070		2,257		20.4 %		13.8 %		12.2 %
Total Executive Search	202,380		206,674		(4,294)		(2.1) %		24.7 %		26.5 %
On-Demand Talent	(1,984)		1,434		(3,418)		NM		(1.2) %		0.9 %
Heidrick Consulting	(6,237)		(5,823)		(414)		(7.1) %		(5.6) %		(6.2) %
Total segments	194,159		202,285		(8,126)		(4.0) %		17.7 %		19.7 %
Research and Development	(19,016)		(20,535)		1,519		7.4 %		(1.7) %		(2.0) %
Global Operations Support	(63,905)		(56,133)		(7,772)		(13.8) %		(5.8) %		(5.5) %
Total Adjusted EBITDA	$     111,238		$     125,617		$   (14,379)		(11.4) %		10.1 %		12.2 %

1	Margin based on revenue before reimbursements (net revenue).

 

Heidrick & Struggles International, Inc.
Reconciliation of Net Income (Loss) and Adjusted Net Income (Non-GAAP)
(In thousands, except per share amounts)
(Unaudited)
	Three Months Ended December 31,				Twelve Months Ended December 31,
	2024		2023		2024		2023
Net income (loss)	$         (14,976)		$          14,855		$          8,728		$        54,410
Adjustments
Impairment charges, net of tax(1)	37,621		—		51,811		6,038
Earnout fair value adjustment, net of tax(2)	(349)		—		439		—
Restructuring charges, net of tax(3)	615		—		5,131		—
Total adjustments	37,887		—		57,381		6,038
Adjusted net income	$          22,911		$          14,855		$        66,109		$        60,448
Weighted-average common shares outstanding
Basic	20,409		20,122		20,293		20,029
Diluted	21,125		20,670		21,188		20,766
Earnings (loss) per common share
Basic	$            (0.73)		$              0.74		$            0.43		$            2.72
Diluted	$            (0.73)		$              0.72		$            0.41		$            2.62
Adjusted earnings per common share
Basic	$              1.12		$              0.74		$            3.26		$            3.02
Diluted	$              1.08		$              0.72		$            3.12		$            2.91

1	The Company recorded goodwill impairment charges of $43.3 million in the On-Demand Talent segment for the three months ended December 31, 2024. The Company recorded goodwill impairment charges of $58.0 million in the On-Demand Talent segment and $1.5 million in the Europe segment for the twelve months ended December 31, 2024. The Company recorded a goodwill impairment charge of $7.2 million in the Heidrick Consulting segment for the twelve months ended December 31, 2023.
2	The Company recorded a fair value adjustment to decrease the Heidrick Consulting earnout by $0.8 million for the three months ended December 31, 2024. The Company recorded a fair value adjustment to increase the On-Demand Talent earnout by $1.1 million and decrease the Heidrick Consulting earnout by $0.7 million for the twelve months ended December 31, 2024.
3	The Company recorded restructuring charges of $6.9 million for the twelve months ended December 31, 2024.

 

Heidrick & Struggles International, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
	December 31, 2024		December 31, 2023
Current assets
Cash and cash equivalents	$         515,627		$         412,618
Marketable securities	47,896		65,538
Accounts receivable, net	134,331		133,128
Prepaid expenses	28,718		23,597
Other current assets	39,935		47,923
Income taxes recoverable	6,470		10,410
Total current assets	772,977		693,214
Non-current assets
Property and equipment, net	51,685		35,752
Operating lease right-of-use assets	83,518		86,063
Assets designated for retirement and pension plans	9,976		11,105
Investments	58,290		47,287
Other non-current assets	25,500		17,071
Goodwill	137,861		202,252
Other intangible assets, net	12,483		20,842
Deferred income taxes	41,898		28,005
Total non-current assets	421,211		448,377
Total assets	$      1,194,188		$      1,141,591
Current liabilities
Accounts payable	$           25,088		$           20,837
Accrued salaries and benefits	353,531		322,744
Deferred revenue	51,085		45,732
Operating lease liabilities	17,653		21,498
Other current liabilities	21,369		21,823
Income taxes payable	14,287		6,057
Total current liabilities	483,013		438,691
Non-current liabilities
Accrued salaries and benefits	58,547		52,108
Retirement and pension plans	72,138		62,100
Operating lease liabilities	83,152		78,204
Other non-current liabilities	42,905		41,808
Deferred income taxes	1,616		6,402
Total non-current liabilities	258,358		240,622
Total liabilities	741,371		679,313
Stockholders' equity	452,817		462,278
Total liabilities and stockholders' equity	$      1,194,188		$      1,141,591

 

Heidrick & Struggles International, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
		Three Months Ended December 31,
		2024		2023
Cash flows - operating activities
Net income (loss)		$      (14,976)		$        14,855
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		5,207		5,076
Deferred income taxes		(17,361)		12,448
Stock-based compensation expense		2,824		3,499
Accretion expense related to earnout payments		513		457
Gain on marketable securities		(340)		(878)
Loss on disposal of property and equipment		190		17
Impairment charges		43,254		—
Changes in assets and liabilities, net of effects of acquisition:
Accounts receivable		47,187		59,118
Accounts payable		17,917		1,526
Accrued expenses		88,403		54,668
Restructuring accrual		(484)		—
Deferred revenue		5,109		3,657
Income taxes recoverable and payable, net		11,979		(13,309)
Retirement and pension plan assets and liabilities		(364)		796
Prepaid expenses		(1,479)		5,004
Other assets and liabilities, net		2,609		8,979
Net cash provided by operating activities		190,188		155,913
Cash flows - investing activities
Acquisition of businesses, net of cash acquired		—		(11,905)
Capital expenditures		(16,668)		(3,814)
Purchases of marketable securities and investments		(48,003)		(65,518)
Proceeds from sales of marketable securities and investments		46,237		48,183
Net cash used in investing activities		(18,434)		(33,054)
Cash flows - financing activities
Cash dividends paid		(3,314)		(3,154)
Payment of employee tax withholdings on equity transactions		(17)		—
Net cash used in financing activities		(3,331)		(3,154)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash		(16,032)		6,442
Net increase in cash, cash equivalents and restricted cash		152,391		126,147
Cash, cash equivalents and restricted cash at beginning of period		363,422		286,471
Cash, cash equivalents and restricted cash at end of period		$      515,813		$      412,618

 

Heidrick & Struggles International, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
		Twelve Months Ended December 31,
		2024		2023
Cash flows - operating activities
Net income		$            8,728		$          54,410
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		18,857		18,508
Deferred income taxes		(19,421)		11,900
Stock-based compensation expense		12,725		10,830
Accretion expense related to earnout payments		1,926		1,554
Gain on marketable securities		(2,663)		(2,918)
Loss on disposal of property and equipment		454		209
Impairment charges		59,478		7,246
Changes in assets and liabilities:
Accounts receivable		(4,520)		6,913
Accounts payable		4,625		(131)
Accrued expenses		47,031		(145,118)
Restructuring accrual		2,506		—
Deferred revenue		6,272		2,035
Income taxes recoverable and payable, net		12,326		(6,692)
Retirement and pension plan assets and liabilities		6,021		7,493
Prepaid expenses		(5,536)		1,233
Other assets and liabilities, net		1,622		5,736
Net cash provided by (used in) operating activities		150,431		(26,792)
Cash flows - investing activities
Acquisition of business, net of cash acquired		—		(49,858)
Capital expenditures		(26,315)		(13,433)
Purchases of marketable securities and investments		(163,611)		(140,982)
Proceeds from sales of marketable securities and investments		175,307		337,872
Net cash provided by (used in) investing activities		(14,619)		133,599
Cash flows - financing activities
Repurchases of common stock		—		(904)
Cash dividends paid		(12,923)		(12,537)
Payment of employee tax withholdings on equity transactions		(3,817)		(4,141)
Acquisition earnout payments		—		(35,946)
Net cash used in financing activities		(16,740)		(53,528)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash		(15,877)		3,850
Net increase in cash, cash equivalents and restricted cash		103,195		57,129
Cash, cash equivalents and restricted cash at beginning of period		412,618		355,489
Cash, cash equivalents and restricted cash at end of period		$        515,813		$        412,618

 

Heidrick & Struggles International, Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA (Non-GAAP)
(In thousands)
(Unaudited)
	Three Months Ended December 31,				Twelve Months Ended December 31,
	2024		2023		2024		2023
Revenue before reimbursements (net revenue)	$    276,191		$    253,162		$  1,098,573		$  1,026,864
Net income (loss)	(14,976)		14,855		8,728		54,410
Interest, net	(5,154)		(3,950)		(14,422)		(11,617)
Other, net	(5,689)		840		(8,702)		(1,697)
Provision for income taxes	2,174		10,119		21,924		34,261
Operating income (loss)	(23,645)		21,864		7,528		75,357
Adjustments
Depreciation	3,302		2,550		10,782		9,113
Intangible amortization	1,905		2,526		8,075		9,395
Earnout accretion	513		457		1,926		1,554
Earnout fair value adjustments	(773)		—		438		—
Acquisition contingent consideration	2,595		3,223		10,815		11,934
Deferred compensation plan	(1,007)		3,823		5,257		6,132
Reorganization costs	—		1,314		—		4,886
Impairment charges	43,254		—		59,478		7,246
Restructuring charges	—		—		6,939		—
Total adjustments	49,789		13,893		103,710		50,260
Adjusted EBITDA	$      26,144		$      35,757		$    111,238		$    125,617
Adjusted EBITDA margin	9.5 %		14.1 %		10.1 %		12.2 %

 

Heidrick & Struggles International, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Line of Business (Non-GAAP)
(In thousands)
(Unaudited)
	Three Months Ended December 31, 2024
	Executive Search		On-Demand Talent		Heidrick Consulting		Research & Development		Global Operations Support		Total
Revenue before reimbursements (net revenue)	$    202,521		$      42,342		$      31,328		$              —		$             —		$    276,191
Operating income (loss)1	49,015		(48,153)		(1,578)		(6,053)		(16,876)		(23,645)
Adjustments
Depreciation	1,352		177		229		1,365		179		3,302
Intangible amortization	15		1,519		371		—		—		1,905
Earnout accretion	—		428		85		—		—		513
Earnout fair value adjustments	—		—		(773)		—		—		(773)
Acquisition contingent compensation	1,122		1,578		(105)		—		—		2,595
Deferred compensation plan	(969)		—		(19)		(16)		(3)		(1,007)
Impairment charges	—		43,254		—		—		—		43,254
Total adjustments	1,520		46,956		(212)		1,349		176		49,789
Adjusted EBITDA	$      50,535		$       (1,197)		$       (1,790)		$       (4,704)		$     (16,700)		$      26,144
Adjusted EBITDA margin	25.0 %		(2.8) %		(5.7) %		(1.7) %		(6.0) %		9.5 %
	Three Months Ended December 31, 2023
	Executive Search		On-Demand Talent		Heidrick Consulting		Research & Development		Global Operations Support		Total
Revenue before reimbursements (net revenue)	$    183,965		$      41,096		$      28,101		$              —		$              —		$    253,162
Operating income (loss)1	49,086		(4,616)		(852)		(5,952)		(15,802)		21,864
Adjustments
Depreciation	1,310		74		247		754		165		2,550
Intangible amortization	28		2,060		438		—		—		2,526
Earnout accretion	—		399		58		—		—		457
Acquisition contingent compensation	640		1,543		1,040		—		—		3,223
Deferred compensation plan	3,665		—		94		59		5		3,823
Reorganization costs	—		1,314		—		—		—		1,314
Total adjustments	5,643		5,390		1,877		813		170		13,893
Adjusted EBITDA	$      54,729		$           774		$        1,025		$       (5,139)		$     (15,632)		$      35,757
Adjusted EBITDA margin	29.7 %		1.9 %		3.6 %		(2.0) %		(6.2) %		14.1 %

1

The Company does not allocate interest income or expense, other income or expense, and the provision for income taxes to the Company's reportable operating segments. As such, the Company has concluded that operating income (loss) represents the most directly comparable measure of financial performance presented in accordance with U.S. GAAP for the reconciliation of Adjusted EBITDA in this presentation.

 

Heidrick & Struggles International, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA (Non-GAAP)
(In thousands)
(Unaudited)
	Twelve Months Ended December 31, 2024
	Executive Search		On-Demand Talent		Heidrick Consulting		Research & Development		Global Operations Support		Total
Revenue before reimbursements (net revenue)	$    818,358		$    168,325		$    111,890		$              —		$              —		$ 1,098,573
Operating income (loss)1	187,638		(76,733)		(14,785)		(23,055)		(65,537)		7,528
Adjustments
Depreciation	4,845		600		735		3,957		645		10,782
Intangible amortization	69		6,447		1,559		—		—		8,075
Earnout accretion	—		1,679		247		—		—		1,926
Earnout fair value adjustments	—		1,125		(687)		—		—		438
Acquisition contingent compensation	996		6,597		3,222		—		—		10,815
Deferred compensation plan	5,059		—		105		82		11		5,257
Impairment charges	1,463		58,015		—		—		—		59,478
Restructuring charges	2,310		286		3,367		—		976		6,939
Total adjustments	14,742		74,749		8,548		4,039		1,632		103,710
Adjusted EBITDA	$    202,380		$       (1,984)		$       (6,237)		$     (19,016)		$     (63,905)		$    111,238
Adjusted EBITDA margin	24.7 %		(1.2 %)		(5.6 %)		(1.7 %)		(5.8) %		10.1 %
	Twelve Months Ended December 31, 2023
	Executive Search		On-Demand Talent		Heidrick Consulting		Research & Development		Global Operations Support		Total
Revenue before reimbursements (net revenue)	$    780,045		$    152,506		$      94,313		$              —		$              —		$ 1,026,864
Operating income (loss)1	190,009		(16,437)		(18,729)		(22,698)		(56,788)		75,357
Adjustments
Depreciation	5,238		400		754		2,073		648		9,113
Intangible amortization	173		7,797		1,425		—		—		9,395
Earnout accretion	—		1,381		173		—		—		1,554
Acquisition contingent compensation	3,089		5,687		3,158		—		—		11,934
Deferred compensation plan	5,885		—		150		90		7		6,132
Reorganization costs	2,280		2,606		—		—		—		4,886
Impairment charges	—		—		7,246		—		—		7,246
Total adjustments	16,665		17,871		12,906		2,163		655		50,260
Adjusted EBITDA	$    206,674		$        1,434		$       (5,823)		$     (20,535)		$     (56,133)		$    125,617
Adjusted EBITDA margin	26.5 %		0.9 %		(6.2 %)		(2.0 %)		(5.5 %)		12.2 %

1

The Company does not allocate interest income or expense, other income or expense, and the provision for income taxes to the Company's reportable operating segments. As such, the Company has concluded that operating income (loss) represents the most directly comparable measure of financial performance presented in accordance with U.S. GAAP for the reconciliation of Adjusted EBITDA in this presentation.

 

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SOURCE Heidrick & Struggles

FAQ

What was Heidrick & Struggles (HSII) revenue growth in Q4 2024?

HSII reported Q4 2024 revenue of $276.2 million, representing a 9.1% increase year-over-year.

How much was HSII's Q4 2024 adjusted earnings per share?

HSII's Q4 2024 adjusted diluted earnings per share was $1.08, up from $0.72 in Q4 2023.

What is Heidrick & Struggles' dividend payment for Q1 2025?

HSII declared a Q1 2025 cash dividend of $0.15 per share, payable on March 27, 2025.

What is HSII's revenue guidance for Q1 2025?

HSII expects Q1 2025 consolidated net revenue between $263 million and $273 million.

How did HSII's Executive Search segment perform in Q4 2024?

Executive Search revenue increased 10.1% to $202.5 million, with growth across all regions.