FINANCIALS: Heidrick & Struggles reveals increase in revenue

Heidrick & Struggles International, a provider of global leadership advisory and on-demand talent solutions, has announced financial results for its second quarter ended 30 June, 2024.
The second quarter highlights reveal:
- Net revenue grew to $278.6m (£216.86m) driven by all businesses
- Adjusted EBITDA was $28.8m
- Adjusted EBITDA margin was 10.3%.
CEO Tom Monahan commented: “Even as we continued to deliver value to clients, we also made important changes to our leadership team and staffing levels. As a result, we enter the second half of the year with more targeted solutions and better alignment of our organisation with client needs. Going forward, we are tightly focused on accelerating returns from our recent investment cycle and on creating unmatched value for clients, colleagues and investors.”
Consolidated net revenue of $278.6m compared to $271.2m in Q2 2023. The company experienced revenue growth in On-Demand Talent, Heidrick Consulting and executive search in the Americas and Asia Pacific, partially offset by a decrease in executive search in Europe.
Adjusted EBITDA was $28.8m compared to $34.9m in the 2023 second quarter. Adjusted EBITDA margin was 10.3%, compared to 12.9% in the 2023 second quarter. In executive search, adjusted EBITDA was $52.7m compared to $53.2m in the previous year period. In On-Demand Talent, adjusted EBITDA was a loss of $1.6m versus a gain of $2.6m in the prior year period. In Heidrick Consulting, adjusted EBITDA was a loss of $1.4m compared to a loss of $1.7m in the prior year period.
In the 2024 second quarter, the company recorded a non-cash goodwill impairment charge of $16.2m primarily related to the company’s On-Demand Talent segment, a $6.9m restructuring charge and a $1.2m earnout fair value adjustment. In Q2 2023, the company recorded a non-cash goodwill impairment charge of $7.2m associated with the company’s Heidrick Consulting segment.
Executive Search net revenue of $210m increased 1.5% compared to net revenue of $206.8m in Q2 2023. Excluding the impact of exchange rate fluctuations, which negatively impacted results by 0.4%, or $0.9m, net revenue increased 2%, or $4.1m from Q2 2023. Net revenue increased 6.1% in the Americas (up 6.3% on a constant currency basis), decreased 12% in Europe (down 11.7% on a constant currency basis), and increased 0.7% in Asia Pacific (up 3.3% on a constant currency basis) when compared to the prior year second quarter. All practice groups, except for Consumer and Industrial, exhibited growth over the prior year period.
On-Demand Talent net revenue of $41.9m increased 6.8% compared to net revenue of $39.2m in Q2 2023. Excluding the impact of exchange rate fluctuations, which negatively impacted results by $0.2m, or 0.5%, net revenue increased 7.3%, or $2.9m from Q2 2023.
Heidrick Consulting net revenue of $26.8m increased 6.2% compared to net revenue of $25.2m in Q2 2023. The company had 85 Heidrick Consulting consultants at 30 June, 2024, compared to 89 at 30 June, 2023.
The company said it expects 2024 third quarter consolidated net revenue of between $260m and $280m, while acknowledging that continued fluidity in external factors, such as the foreign exchange and interest rate environments, foreign conflicts, inflation and macroeconomic constraints on pricing actions, may impact quarterly results.
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