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

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 , /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[email protected] Media:Bianca Wilson, Global Director, Public Relations[email protected] 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. SOURCE Heidrick & Struggles WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

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

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