PR Newswire
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.”
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(Dollars in millions, except per share amounts) |
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Revenue before reimbursements (net revenue) |
$ 276.2 |
$ 253.2 |
$ 1,098.6 |
$ 1,026.9 |
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Adjusted EBITDA |
$ 26.1 |
$ 35.8 |
$ 111.2 |
$ 125.6 |
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Adjusted EBITDA margin |
9.5 % |
14.1 % |
10.1 % |
12.2 % |
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Adjusted net income |
$ 22.9 |
$ 14.9 |
$ 66.1 |
$ 60.4 |
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Adjusted diluted earnings per share |
$ 1.08 |
$ 0.72 |
$ 3.12 |
$ 2.91 |
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(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. |
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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.
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(Dollars in millions, except Average revenue per executive search in thousands) |
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Revenue before reimbursements (net revenue) |
$ 202.5 |
$ 184.0 |
$ 818.4 |
$ 780.0 |
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Ending number of consultants |
418 |
414 |
418 |
414 |
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Consultant productivity |
$ 2.0 |
$ 1.8 |
$ 2.0 |
$ 1.9 |
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Average revenue per executive search |
$ 151 |
$ 138 |
$ 146 |
$ 140 |
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Confirmations (% increase/decrease) |
0.5 % |
4.0 % |
0.1 % |
(10.5) % |
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Adjusted EBITDA |
$ 50.5 |
$ 54.7 |
$ 202.4 |
$ 206.7 |
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Adjusted EBITDA margin |
25.0 % |
29.7 % |
24.7 % |
26.5 % |
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(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.
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(Dollars in millions) |
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Revenue before reimbursements (net revenue) |
$ 42.3 |
$ 41.1 |
$ 168.3 |
$ 152.5 |
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Adjusted EBITDA |
$ (1.2) |
$ 0.8 |
$ (2.0) |
$ 1.4 |
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Adjusted EBITDA margin |
(2.8) % |
1.9 % |
(1.2) % |
0.9 % |
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(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. |
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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.
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(Dollars in millions) |
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Revenue before reimbursements (net revenue) |
$ 31.3 |
$ 28.1 |
$ 111.9 |
$ 94.3 |
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Ending number of consultants |
85 |
89 |
85 |
89 |
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Adjusted EBITDA |
$ (1.8) |
$ 1.0 |
$ (6.2) |
$ (5.8) |
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Adjusted EBITDA margin |
(5.7) % |
3.6 % |
(5.6) % |
(6.2) % |
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(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. |
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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
[email protected]
Media:
Bianca Wilson, Global Director, Public Relations
[email protected]
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(In thousands, except per share amounts) |
|||||||
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(Unaudited) |
|||||||
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|||||||
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Revenue before reimbursements (net revenue) |
$ 276,191 |
$ 253,162 |
$ 23,029 |
9.1 % |
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Reimbursements |
4,695 |
4,228 |
467 |
11.0 % |
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Total revenue |
280,886 |
257,390 |
23,496 |
9.1 % |
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|
|
|||||||
|
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 % |
|||
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Impairment charges |
43,254 |
— |
43,254 |
NM |
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Reimbursed expenses |
4,695 |
4,228 |
467 |
11.0 % |
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Total operating expenses |
304,531 |
235,526 |
69,005 |
29.3 % |
|||
|
|
(23,645) |
21,864 |
(45,509) |
NM |
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|
|||||||
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Interest, net |
5,154 |
3,950 |
|||||
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Other, net |
5,689 |
(840) |
|||||
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Net non-operating income |
10,843 |
3,110 |
|||||
|
|
(12,802) |
24,974 |
|||||
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Provision for income taxes |
2,174 |
10,119 |
|||||
|
|
(14,976) |
14,855 |
|||||
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Other comprehensive income, net of tax |
(14,985) |
7,951 |
|||||
|
|
$ (29,961) |
$ 22,806 |
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|
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|||||||
|
Basic |
20,409 |
20,122 |
|||||
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Diluted |
21,125 |
20,670 |
|||||
|
|
|||||||
|
Basic |
$ (0.73) |
$ 0.74 |
|||||
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Diluted |
$ (0.73) |
$ 0.72 |
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Salaries and benefits as a % of net revenue |
65.3 % |
59.7 % |
|||||
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General and administrative expenses as a % of net revenue |
14.3 % |
17.4 % |
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Cost of services as a % of net revenue |
11.1 % |
11.9 % |
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Research and development as a % of net revenue |
2.2 % |
2.4 % |
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Operating margin |
(8.6) % |
8.6 % |
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(In thousands) |
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(Unaudited) |
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Executive Search |
|||||||||||
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Americas |
$ 138,642 |
$ 124,778 |
$ 13,864 |
11.1 % |
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Europe |
40,312 |
37,275 |
3,037 |
8.1 % |
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Asia Pacific |
23,567 |
21,912 |
1,655 |
7.6 % |
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Total Executive Search |
202,521 |
183,965 |
18,556 |
10.1 % |
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On-Demand Talent |
42,342 |
41,096 |
1,246 |
3.0 % |
|||||||
|
Heidrick Consulting |
31,328 |
28,101 |
3,227 |
11.5 % |
|||||||
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Revenue before reimbursements (net revenue) |
276,191 |
253,162 |
23,029 |
9.1 % |
|||||||
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Reimbursements |
4,695 |
4,228 |
467 |
11.0 % |
|||||||
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Total revenue |
$ 280,886 |
$ 257,390 |
$ 23,496 |
9.1 % |
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Executive Search |
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Americas |
$ 43,812 |
$ 45,801 |
$ (1,989) |
(4.3) % |
31.6 % |
36.7 % |
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|
Europe |
3,578 |
5,759 |
(2,181) |
(37.9) % |
8.9 % |
15.5 % |
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|
Asia Pacific |
3,145 |
3,169 |
(24) |
(0.8) % |
13.3 % |
14.5 % |
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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 % |
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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 % |
|||||
|
|
Margin based on revenue before reimbursements (net revenue). |
|
|
|||||||
|
|
|||||||
|
(In thousands, except per share amounts) |
|||||||
|
(Unaudited) |
|||||||
|
|
|||||||
|
|
|
|
|
||||
|
|
|||||||
|
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 % |
|||
|
|
|||||||
|
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 % |
|||
|
|
7,528 |
75,357 |
(67,829) |
(90.0) % |
|||
|
|
|||||||
|
Interest, net |
14,422 |
11,617 |
|||||
|
Other, net |
8,702 |
1,697 |
|||||
|
Net non-operating income |
23,124 |
13,314 |
|||||
|
|
30,652 |
88,671 |
|||||
|
Provision for income taxes |
21,924 |
34,261 |
|||||
|
|
8,728 |
54,410 |
|||||
|
Other comprehensive income (loss), net of tax |
(14,174) |
4,318 |
|||||
|
|
$ (5,446) |
$ 58,728 |
|||||
|
|
|||||||
|
Basic |
20,293 |
20,029 |
|||||
|
Diluted |
21,188 |
20,766 |
|||||
|
|
|||||||
|
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 % |
|||||
|
|
|||||||||||
|
|
|||||||||||
|
(In thousands) |
|||||||||||
|
(Unaudited) |
|||||||||||
|
|
|||||||||||
|
|
|
|
|
|
|
||||||
|
|
|||||||||||
|
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 % |
|||||||
|
|
|||||||||||
|
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 % |
|||||
|
|
Margin based on revenue before reimbursements (net revenue). |
|
|
|||||||
|
|
|||||||
|
(In thousands, except per share amounts) |
|||||||
|
(Unaudited) |
|||||||
|
|
|
||||||
|
|
|
|
|
||||
|
|
$ (14,976) |
$ 14,855 |
$ 8,728 |
$ 54,410 |
|||
|
|
|||||||
|
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 |
|||
|
|
$ 22,911 |
$ 14,855 |
$ 66,109 |
$ 60,448 |
|||
|
|
|||||||
|
Basic |
20,409 |
20,122 |
20,293 |
20,029 |
|||
|
Diluted |
21,125 |
20,670 |
21,188 |
20,766 |
|||
|
|
|||||||
|
Basic |
$ (0.73) |
$ 0.74 |
$ 0.43 |
$ 2.72 |
|||
|
Diluted |
$ (0.73) |
$ 0.72 |
$ 0.41 |
$ 2.62 |
|||
|
|
|||||||
|
Basic |
$ 1.12 |
$ 0.74 |
$ 3.26 |
$ 3.02 |
|||
|
Diluted |
$ 1.08 |
$ 0.72 |
$ 3.12 |
$ 2.91 |
|||
|
|
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. |
|
|
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. |
|
|
The Company recorded restructuring charges of $6.9 million for the twelve months ended December 31, 2024. |
|
|
|||
|
|
|||
|
(In thousands) |
|||
|
(Unaudited) |
|||
|
|
|
||
|
|
|||
|
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 |
|
|
|
|||
|
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 |
|
|
|
$ 1,194,188 |
$ 1,141,591 |
|
|
|
|||
|
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 |
|
|
|
|||
|
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 |
|
|
|
741,371 |
679,313 |
|
|
|
452,817 |
462,278 |
|
|
|
$ 1,194,188 |
$ 1,141,591 |
|
|
|
||||
|
|
||||
|
(In thousands) |
||||
|
(Unaudited) |
||||
|
|
||||
|
|
|
|||
|
|
||||
|
Net income (loss) |
$ (14,976) |
$ 14,855 |
||
|
Adjustments to reconcile net income (loss) to net cash provided by operating |
||||
|
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 |
||
|
|
||||
|
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 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 |
||
|
|
||||
|
|
||||
|
(In thousands) |
||||
|
(Unaudited) |
||||
|
|
||||
|
|
|
|||
|
|
||||
|
Net income |
$ 8,728 |
$ 54,410 |
||
|
Adjustments to reconcile net income to net cash provided by (used in) operating |
||||
|
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) |
||
|
|
||||
|
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 |
||
|
|
||||
|
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 |
||
|
|
|||||||
|
|
|||||||
|
(In thousands) |
|||||||
|
(Unaudited) |
|||||||
|
|
|
||||||
|
|
|
|
|
||||
|
|
$ 276,191 |
$ 253,162 |
$ 1,098,573 |
$ 1,026,864 |
|||
|
|
(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 |
|||
|
|
(23,645) |
21,864 |
7,528 |
75,357 |
|||
|
|
|||||||
|
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 |
|||
|
|
$ 26,144 |
$ 35,757 |
$ 111,238 |
$ 125,617 |
|||
|
|
9.5 % |
14.1 % |
10.1 % |
12.2 % |
|||
|
|
|||||||||||
|
|
|||||||||||
|
(In thousands) |
|||||||||||
|
(Unaudited) |
|||||||||||
|
|
|||||||||||
|
|
|
|
|
|
|
||||||
|
|
$ 202,521 |
$ 42,342 |
$ 31,328 |
$ — |
$ — |
$ 276,191 |
|||||
|
|
49,015 |
(48,153) |
(1,578) |
(6,053) |
(16,876) |
(23,645) |
|||||
|
|
|||||||||||
|
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 |
|||||
|
|
$ 50,535 |
$ (1,197) |
$ (1,790) |
$ (4,704) |
$ (16,700) |
$ 26,144 |
|||||
|
|
25.0 % |
(2.8) % |
(5.7) % |
(1.7) % |
(6.0) % |
9.5 % |
|||||
|
|
|||||||||||
|
|
|
|
|
|
|
||||||
|
|
$ 183,965 |
$ 41,096 |
$ 28,101 |
$ — |
$ — |
$ 253,162 |
|||||
|
|
49,086 |
(4,616) |
(852) |
(5,952) |
(15,802) |
21,864 |
|||||
|
|
|||||||||||
|
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 |
|||||
|
|
$ 54,729 |
$ 774 |
$ 1,025 |
$ (5,139) |
$ (15,632) |
$ 35,757 |
|||||
|
|
29.7 % |
1.9 % |
3.6 % |
(2.0) % |
(6.2) % |
14.1 % |
|||||
|
|
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. |
|
|
|||||||||||
|
|
|||||||||||
|
(In thousands) |
|||||||||||
|
(Unaudited) |
|||||||||||
|
|
|||||||||||
|
|
|
|
|
|
|
||||||
|
|
$ 818,358 |
$ 168,325 |
$ 111,890 |
$ — |
$ — |
$ 1,098,573 |
|||||
|
|
187,638 |
(76,733) |
(14,785) |
(23,055) |
(65,537) |
7,528 |
|||||
|
|
|||||||||||
|
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 |
|||||
|
|
$ 202,380 |
$ (1,984) |
$ (6,237) |
$ (19,016) |
$ (63,905) |
$ 111,238 |
|||||
|
|
24.7 % |
(1.2 %) |
(5.6 %) |
(1.7 %) |
(5.8) % |
10.1 % |
|||||
|
|
|||||||||||
|
|
|
|
|
|
|
||||||
|
|
$ 780,045 |
$ 152,506 |
$ 94,313 |
$ — |
$ — |
$ 1,026,864 |
|||||
|
|
190,009 |
(16,437) |
(18,729) |
(22,698) |
(56,788) |
75,357 |
|||||
|
|
|||||||||||
|
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 |
|||||
|
|
$ 206,674 |
$ 1,434 |
$ (5,823) |
$ (20,535) |
$ (56,133) |
$ 125,617 |
|||||
|
|
26.5 % |
0.9 % |
(6.2 %) |
(2.0 %) |
(5.5 %) |
12.2 % |
|||||
|
|
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
