All Business Segments Contribute to Consolidated Revenue Growth
First Quarter 2025 Financial Highlights:
•Net revenue of $283.6 million increased 6.9% year over year
•Adjusted EBITDA was $29.1 million with adjusted EBITDA margin of 10.3%
•Adjusted net income was $14.2 million with adjusted diluted earnings per share of $0.67
•Q2 2025 revenue outlook between $285 million and $305 million versus $278.6 million in year-ago period
•The Board of Directors declared a $0.15 per share cash dividend
CHICAGO, May 5, 2025 – 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 first quarter ended March 31, 2025.
“Our first quarter results exceeded the high end of our outlook, a testament to our resilient business model, our team’s intense focus, and the deep trust that clients place in Heidrick,” said Tom Monahan, CEO of Heidrick & Struggles. “When navigating economic uncertainty, we remain committed to serving as a highly strategic advisor, helping organizations turn complexity into opportunity. In addition, our new leadership team is focused on sharpening execution and ensuring our professionals have the resources to deliver exceptional results.
While mindful of current macroeconomic conditions, we know that by staying close to our clients and enabling our exceptional professionals with new tools and solutions, we can continue to engineer differentiated, deep and durable client partnerships. We are confident in our ability to create lasting value for our clients, our people and our shareholders.”
Selected Consolidated Results
(Dollars in millions, except per share amounts, and average revenue per executive search in thousands)
Three Months Ended March 31,
2025
2024
Revenue before reimbursements (net revenue)
$
283.6
$
265.2
Adjusted results (a):
Adjusted EBITDA
$
29.1
$
25.9
Adjusted EBITDA margin
10.3
%
9.8
%
Adjusted net income
$
14.2
$
14.0
Adjusted diluted earnings per share
$
0.67
$
0.67
Selected Executive Search Data
Revenue before reimbursements (net revenue)
$
213.4
$
201.5
Ending number of consultants
427
424
Consultant productivity
$
2.0
$
1.9
Average revenue per executive search
$
137
$
136
Confirmations (% increase/decrease)
5.3
%
(3.2)
%
Selected On-Demand Talent Data
Revenue before reimbursements (net revenue)
$
42.6
$
37.9
Selected Heidrick Consulting Data
Revenue before reimbursements (net revenue)
$
27.6
$
25.9
Ending number of consultants
91
95
(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.
2025 First Quarter Results
Consolidated net revenue increased 6.9% to $283.6 million in the 2025 first quarter compared to consolidated net revenue of $265.2 million in the 2024 first quarter (up 8.1%, or $21.6M 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.
2025 first quarter net income was $13.3 million and diluted earnings per share was $0.62 which included an acquisition-related earnout and contingent compensation fair value adjustment of $1.3 million related to the On-Demand Talent segment. Excluding this charge, 2025 first quarter adjusted net income was $14.2 million compared to adjusted net income of $14.0 million in the 2024 first quarter. 2025 first quarter adjusted diluted earnings per share was $0.67, consistent with the prior year period.
Adjusted EBITDA increased $3.3 million to $29.1 million in the 2025 first quarter compared to $25.9 million in the 2024 first quarter, and 2025 first quarter adjusted EBITDA margin expanded 50 basis points to 10.3% compared to 9.8% in the 2024 first quarter.
Executive Search net revenue was $213.4 million in the 2025 first quarter compared to net revenue of $201.5 million in the 2024 first quarter, an increase of $11.9 million, or 5.9% (up 7.0% on a constant currency basis). The higher revenue versus the year-ago period was driven by increases in all regions including 5.7% in the Americas (up 6.3% on a constant currency basis), 9.4% in Europe (up 11.4% on a constant currency basis), and 1.2% in Asia Pacific (up 3.5% on a constant currency basis) when compared to the prior year first quarter.
Adjusted EBITDA increased $3.9 million to $52.3 million in the 2025 first quarter compared to $48.4 million in the 2024 first quarter, and 2025 first quarter adjusted EBITDA margin grew to 24.5% compared to 24.0% in the 2024 first quarter.
On-Demand Talent net revenue increased $4.7 million, or 12.4%, to $42.6 million in the 2025 first quarter compared to net revenue of $37.9 million in the 2024 first quarter (up $5.4 million, or 14.3% on a constant currency basis).
Adjusted EBITDA was $0.4 million in the 2025 first quarter compared to a loss of $0.9 million in the 2024 first quarter, and Adjusted EBITDA margin was 0.9% compared to (2.4)% in the 2024 first quarter.
Heidrick Consulting net revenue increased $1.8 million, or 6.8%, to $27.6 million in the 2025 first quarter compared to net revenue of $25.9 million in the 2024 first quarter (up $2.0 million, or 7.8% on a constant currency basis).
Adjusted EBITDA loss was $2.1 million in the 2025 first quarter compared to a loss of $2.0 million in the 2024 first quarter, and Adjusted EBITDA margin was (7.6)% compared to (7.8)% in the 2024 first quarter.
Dividend
The Board of Directors declared a 2025 first quarter cash dividend of $0.15 per share payable on May 29, 2025, to shareholders of record at the close of business on May 15, 2025.
2025 Second Quarter Outlook
The Company expects 2025 second quarter consolidated net revenue between $285 million and $305 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 March 2025 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 first quarter results today, May 5, 2025, at 5:00 pm Eastern Time. Participants may access the Company’s call and supporting slides through its website at 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 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 and acquisition contingent compensation fair value adjustments, net of tax.
Adjusted effective tax rate is effective tax rate excluding goodwill impairment, restructuring charges and earnout and acquisition contingent compensation 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 second 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, the conflict between Israel and Hamas and any broader regional conflict in the Middle East, 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 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:
Vance Edelson
Vance.Edelson@icrinc.com
Media:
Bianca Wilson, Global Director, Public Relations
bwilson@heidrick.com
Heidrick & Struggles International, Inc.
Consolidated Statements of Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended March 31,
2025
2024
$ Change
% Change
Revenue
Revenue before reimbursements (net revenue)
$
283,578
$
265,197
$
18,381
6.9
%
Reimbursements
3,864
3,901
(37)
(0.9)
%
Total revenue
287,442
269,098
18,344
6.8
%
Operating expenses
Salaries and benefits
189,475
174,413
15,062
8.6
%
General and administrative expenses
41,424
41,363
61
0.1
%
Cost of services
30,059
27,432
2,627
9.6
%
Research and development
6,392
5,715
677
11.8
%
Reimbursed expenses
3,864
3,901
(37)
(0.9)
%
Total operating expenses
271,214
252,824
18,390
7.3
%
Operating income
16,228
16,274
(46)
(0.3)
%
Non-operating income (loss)
Interest, net
3,955
4,086
Other, net
(2,566)
2,571
Net non-operating income
1,389
6,657
Income before income taxes
17,617
22,931
Provision for income taxes
4,311
8,899
Net income
13,306
14,032
Other comprehensive income (loss), net of tax
2,502
(4,091)
Comprehensive income
$
15,808
$
9,941
Weighted-average common shares outstanding
Basic
20,464
20,144
Diluted
21,318
21,040
Earnings (loss) per common share
Basic
$
0.65
$
0.70
Diluted
$
0.62
$
0.67
Salaries and benefits as a % of net revenue
66.8
%
65.8
%
General and administrative expenses as a % of net revenue
14.6
%
15.6
%
Cost of services as a % of net revenue
10.6
%
10.3
%
Research and development as a % of net revenue
2.3
%
2.2
%
Operating margin
5.7
%
6.1
%
Heidrick & Struggles International, Inc.
Segment Information
(In thousands)
(Unaudited)
Three Months Ended March 31,
2025
2024
$ Change
% Change
Revenue
Executive Search
Americas
$
144,404
$
136,679
$
7,725
5.7
%
Europe
45,391
41,481
3,910
9.4
%
Asia Pacific
23,595
23,321
274
1.2
%
Total Executive Search
213,390
201,481
11,909
5.9
%
On-Demand Talent
42,564
37,857
4,707
12.4
%
Heidrick Consulting
27,624
25,859
1,765
6.8
%
Revenue before reimbursements (net revenue)
283,578
265,197
18,381
6.9
%
Reimbursements
3,864
3,901
(37)
(0.9)
%
Total revenue
$
287,442
$
269,098
$
18,344
6.8
%
Adjusted EBITDA
Executive Search
Americas
$
44,222
$
41,871
$
2,351
5.6
%
Europe
5,042
3,353
1,689
50.4
%
Asia Pacific
3,035
3,195
(160)
(5.0)
%
Total Executive Search
52,299
48,419
3,880
8.0
%
On-Demand Talent
400
(921)
1,321
143.4
%
Heidrick Consulting
(2,096)
(2,027)
(69)
(3.4)
%
Total segments
50,603
45,471
5,132
11.3
%
Research and Development
(4,624)
(4,925)
301
6.1
%
Global Operations Support
(16,857)
(14,678)
(2,179)
(14.8)
%
Total Adjusted EBITDA
$
29,122
$
25,868
$
3,254
12.6
%
1 Margin based on revenue before reimbursements (net revenue).
Heidrick & Struggles International, Inc.
Reconciliation of Net Income and Adjusted Net Income (Non-GAAP)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended March 31,
2025
2024
Net income (loss)
$
13,306
$
14,032
Adjustments
Acquisition related earnout and contingent compensation fair value adjustments, net of tax(1)
885
—
Total adjustments
885
—
Adjusted net income
$
14,191
$
14,032
Weighted-average common shares outstanding
Basic
20,464
20,144
Diluted
21,318
21,040
Earnings (loss) per common share
Basic
$
0.65
$
0.70
Diluted
$
0.62
$
0.67
Adjusted earnings per common share
Basic
$
0.69
$
0.70
Diluted
$
0.67
$
0.67
1 The Company recorded a fair value adjustment to increase the On-Demand Talent earnout and contingent compensation accrual by $1.3 million for the three months ended March 31, 2025.
Heidrick & Struggles International, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, 2025
December 31, 2024
Current assets
Cash and cash equivalents
$
211,944
$
515,627
Marketable securities
112,715
47,896
Accounts receivable, net
182,136
134,331
Prepaid expenses
33,970
28,718
Other current assets
47,421
39,935
Income taxes recoverable
6,964
6,470
Total current assets
595,150
772,977
Non-current assets
Property and equipment, net
51,938
51,685
Operating lease right-of-use assets
80,863
83,518
Assets designated for retirement and pension plans
10,424
9,976
Investments
64,434
58,290
Other non-current assets
26,113
25,500
Goodwill
139,447
137,861
Other intangible assets, net
11,304
12,483
Deferred income taxes
44,018
41,898
Total non-current assets
428,541
421,211
Total assets
$
1,023,691
$
1,194,188
Current liabilities
Accounts payable
$
23,103
$
25,088
Accrued salaries and benefits
171,155
353,531
Deferred revenue
55,957
51,085
Operating lease liabilities
17,652
17,653
Other current liabilities
64,869
21,369
Income taxes payable
16,804
14,287
Total current liabilities
349,540
483,013
Non-current liabilities
Accrued salaries and benefits
41,826
58,547
Retirement and pension plans
79,118
72,138
Operating lease liabilities
82,436
83,152
Other non-current liabilities
4,318
42,905
Deferred income taxes
1,403
1,616
Total non-current liabilities
209,101
258,358
Total liabilities
558,641
741,371
Stockholders’ equity
465,050
452,817
Total liabilities and stockholders’ equity
$
1,023,691
$
1,194,188
Heidrick & Struggles International, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March 31,
2025
2024
Cash flows - operating activities
Net income
$
13,306
$
14,032
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
4,847
4,790
Deferred income taxes
(1,883)
(87)
Stock-based compensation expense
2,510
2,644
Accretion expense related to earnout payments
481
466
Gain on marketable securities
(948)
(539)
Loss on disposal of property and equipment
7
14
Changes in assets and liabilities, net of effects of acquisition:
Accounts receivable
(45,609)
(41,125)
Accounts payable
(2,510)
(2,069)
Accrued expenses
(199,320)
(182,590)
Restructuring accrual
(964)
—
Deferred revenue
4,347
1,951
Income taxes recoverable and payable, net
1,846
4,723
Retirement and pension plan assets and liabilities
6,732
5,453
Prepaid expenses
(4,673)
(7,991)
Other assets and liabilities, net
(10,393)
(3,096)
Net cash used in operating activities
(232,224)
(203,424)
Cash flows - investing activities
Capital expenditures
(2,734)
(6,173)
Purchases of marketable securities and investments
(118,719)
(5,400)
Proceeds from sales of marketable securities and investments
48,325
66,285
Net cash provided by (used in) investing activities
(73,128)
54,712
Cash flows - financing activities
Debt issuance costs
(360)
—
Cash dividends paid
(3,196)
(3,216)
Payment of employee tax withholdings on equity transactions
(2,889)
(2,862)
Net cash used in financing activities
(6,445)
(6,078)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
8,122
(4,997)
Net decrease in cash, cash equivalents and restricted cash
(303,675)
(159,787)
Cash, cash equivalents and restricted cash at beginning of period
515,813
412,618
Cash, cash equivalents and restricted cash at end of period
$
212,138
$
252,831
Heidrick & Struggles International, Inc.
Reconciliation of Net Income to Adjusted EBITDA (Non-GAAP)
(In thousands)
(Unaudited)
Three Months Ended March 31,
2025
2024
Revenue before reimbursements (net revenue)
$
283,578
$
265,197
Net income
13,306
14,032
Interest, net
(3,955)
(4,086)
Other, net
2,566
(2,571)
Provision for income taxes
4,311
8,899
Operating income
16,228
16,274
Adjustments
Depreciation
3,179
2,493
Intangible amortization
1,668
2,297
Earnout accretion
481
466
Earnout fair value adjustments
942
—
Acquisition contingent consideration
2,821
1,988
Deferred compensation plan
(358)
2,350
Reorganization costs
4,161
—
Total adjustments
12,894
9,594
Adjusted EBITDA
$
29,122
$
25,868
Adjusted EBITDA margin
10.3
%
9.8
%
Heidrick & Struggles International, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA by Line of Business (Non-GAAP)
(In thousands)
(Unaudited)
Three Months Ended March 31, 2025
Executive Search
On-Demand Talent
Heidrick Consulting
Research & Development
Global Operations Support
Total
Revenue before reimbursements (net revenue)
$
213,390
$
42,564
$
27,624
$
—
$
—
$
283,578
Operating income (loss)1
50,508
(5,634)
(3,827)
(6,392)
(18,427)
16,228
Adjustments
Depreciation
1,176
208
208
1,437
150
3,179
Intangible amortization
11
1,290
367
—
—
1,668
Earnout accretion
—
427
54
—
—
481
Earnout fair value adjustments
—
942
—
—
—
942
Acquisition contingent compensation
—
1,917
904
—
—
2,821
Deferred compensation plan
(349)
—
(4)
(5)
—
(358)
Reorganization costs
953
1,250
202
336
1,420
4,161
Total adjustments
1,791
6,034
1,731
1,768
1,570
12,894
Adjusted EBITDA
$
52,299
$
400
$
(2,096)
$
(4,624)
$
(16,857)
$
29,122
Adjusted EBITDA margin
24.5
%
0.9
%
(7.6)
%
(1.6)
%
(5.9)
%
10.3
%
Three Months Ended March 31, 2024
Executive Search
On-Demand Talent
Heidrick Consulting
Research & Development
Global Operations Support
Total
Revenue before reimbursements (net revenue)
$
201,481
$
37,857
$
25,859
$
—
$
—
$
265,197
Operating income (loss)1
45,532
(4,849)
(3,842)
(5,715)
(14,852)
16,274
Adjustments
Depreciation
1,241
131
197
754
170
2,493
Intangible amortization
17
1,835
445
—
—
2,297
Earnout accretion
—
406
60
—
—
466
Earnout fair value adjustments
—
—
—
—
—
—
Acquisition contingent compensation
(630)
1,556
1,062
—
—
1,988
Deferred compensation plan
2,259
—
51
36
4
2,350
Total adjustments
2,887
3,928
1,815
790
174
9,594
Adjusted EBITDA
$
48,419
$
(921)
$
(2,027)
$
(4,925)
$
(14,678)
$
25,868
Adjusted EBITDA margin
24.0
%
(2.4
%)
(7.8
%)
(1.9)
%
(5.5)
%
9.8
%
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.
