Heidrick & Struggles Delivers 7% Revenue Growth in Q1, Driving Strong Profitability

Q1 Revenue Exceeds High End of Outlook

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 /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 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."

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

[email protected]

Media:

Bianca Wilson, Global Director, Public Relations

[email protected]

 

 

 

 

 

 

 

 

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SOURCE Heidrick & Struggles