Heidrick & Struggles International, Inc. (HSII) Bundle
A Brief History of Heidrick & Struggles International, Inc.
Heidrick & Struggles International, Inc. (HSII), a global executive search and consulting firm, has seen significant growth and transformations over the years. As of 2024, the company has expanded its services and enhanced its capabilities through strategic acquisitions and an increasing focus on technology.
Company Overview
Founded in 1953, HSII specializes in executive search and leadership consulting. The company operates in three main segments: Executive Search, On-Demand Talent, and Heidrick Consulting.
Financial Performance
In the nine months ended September 30, 2024, HSII reported consolidated total revenue of $834.8 million, an increase of 6.5% compared to $783.8 million in the same period of 2023. The growth was driven primarily by the Executive Search and Heidrick Consulting segments.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $282.8 million | $267.9 million | 5.6% |
| Net Income | $14.8 million | $15.0 million | -1.1% |
| Adjusted EBITDA | $30.4 million | $29.3 million | 3.8% |
| Cash Dividends Paid | $0.15 per share | $0.15 per share | No Change |
Segment Performance
For the nine months ended September 30, 2024, HSII's revenue by segment was as follows:
| Segment | Revenue | Change from 2023 |
|---|---|---|
| Executive Search | $615.8 million | +3.3% |
| On-Demand Talent | $126.0 million | +13.1% |
| Heidrick Consulting | $80.6 million | +21.7% |
Acquisitions and Strategic Initiatives
In 2023, HSII expanded its capabilities by acquiring businessfourzero, a consultancy focused on purpose-driven change, for $9.5 million, with additional potential earnouts estimated at $4.0 million to $8.0 million based on performance metrics through 2025. This acquisition aligns with HSII's strategic goal to enhance its consulting offerings.
Cash Flow and Financial Health
As of September 30, 2024, HSII reported cash, cash equivalents, and marketable securities totaling $409.4 million. The cash used in operating activities for the nine months ended September 30, 2024, was $39.8 million, primarily due to an increase in accounts receivable.
Stockholder Equity
As of September 30, 2024, the total stockholders' equity for HSII was $483.3 million, reflecting a slight increase from $462.3 million at the end of 2023. The company declared cash dividends of $0.15 per share during this period.
Challenges and Future Outlook
Despite the growth, HSII faced challenges, including an impairment charge of $16.2 million related to goodwill in the On-Demand Talent segment. The company continues to focus on leveraging technology and enhancing its service offerings to maintain its competitive edge in the market.
A Who Owns Heidrick & Struggles International, Inc. (HSII)
Ownership Structure
As of 2024, Heidrick & Struggles International, Inc. (HSII) has a diverse ownership structure that includes institutional investors, mutual funds, and individual shareholders. The largest shareholders are typically institutional investors, which own a significant portion of the company's stock.
| Shareholder Type | Percentage Owned |
|---|---|
| Institutional Investors | 75.6% |
| Mutual Funds | 15.2% |
| Individual Shareholders | 9.2% |
Major Institutional Investors
Some of the key institutional investors in Heidrick & Struggles include:
| Institution | Percentage Owned |
|---|---|
| BlackRock, Inc. | 12.3% |
| Vanguard Group, Inc. | 9.8% |
| Dimensional Fund Advisors LP | 7.5% |
| State Street Corporation | 5.6% |
Stock Performance
The stock performance of HSII shows fluctuations that are typical for companies in the consulting sector. The stock price as of the end of September 2024 was approximately $31.50, with a year-to-date increase of 12.5%.
| Metric | Value |
|---|---|
| Current Stock Price | $31.50 |
| Year-to-Date Increase | 12.5% |
| Market Capitalization | $750 million |
Financial Overview
Heidrick & Struggles reported a consolidated net revenue increase, demonstrating solid financial performance in the current fiscal year.
| Financial Metric | Value (2024) |
|---|---|
| Net Revenue | $822.4 million |
| Net Income | $23.7 million |
| Adjusted EBITDA | $85.1 million |
Recent Developments
In recent quarters, Heidrick & Struggles has seen growth in segments such as Executive Search and Heidrick Consulting, contributing positively to its overall financial health.
| Segment | Net Revenue (Q3 2024) | Change from Q3 2023 |
|---|---|---|
| Executive Search | $204.4 million | +2.8% |
| On-Demand Talent | $46.2 million | +12.6% |
| Heidrick Consulting | $27.9 million | +19.9% |
Heidrick & Struggles International, Inc. (HSII) Mission Statement
Overview
Heidrick & Struggles International, Inc. (HSII) is dedicated to providing leadership consulting and executive search services to help organizations achieve their goals. The mission statement reflects the company's commitment to excellence in leadership advisory services and talent solutions.
Mission Statement
As of 2024, HSII's mission is to be the trusted advisor to the world's leading organizations, helping them build exceptional leadership teams and enhance their organizational performance through innovative solutions.
Core Values
- Integrity: Upholding the highest ethical standards in every interaction.
- Collaboration: Working together with clients and partners to achieve shared goals.
- Innovation: Continuously evolving to meet the changing needs of clients.
- Diversity: Promoting inclusive practices to enhance organizational effectiveness.
Financial Performance
Heidrick & Struggles reported significant financial performance metrics in 2024, emphasizing the success of its mission-driven approach.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Consolidated Net Revenue | $278.6 million | $263.2 million | 5.9% |
| Executive Search Net Revenue | $204.4 million | $198.8 million | 2.8% |
| On-Demand Talent Net Revenue | $46.2 million | $41.1 million | 12.6% |
| Heidrick Consulting Net Revenue | $27.9 million | $23.3 million | 19.9% |
| Net Income | $14.8 million | $15.0 million | -1.1% |
Employee Metrics
As of September 30, 2024, HSII maintained a robust workforce to support its mission.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Average Number of Employees | 2,170 | 2,232 |
| Executive Search Consultants | 414 | 417 |
| Heidrick Consulting Consultants | 84 | 90 |
Strategic Initiatives
HSII continues to innovate in its service offerings, focusing on leadership assessment, development, and enhancing client relationships through tailored consulting solutions.
Conclusion on Mission Alignment
The financial results and employee metrics reflect Heidrick & Struggles International's commitment to its mission of enhancing organizational performance through exceptional leadership solutions.
How Heidrick & Struggles International, Inc. (HSII) Works
Overview of Business Segments
Heidrick & Struggles International, Inc. operates through three primary business segments: Executive Search, On-Demand Talent, and Heidrick Consulting. Each segment contributes differently to the overall financial performance of the company.
| Segment | Net Revenue (Q3 2024) | Net Revenue (Q3 2023) | Change (%) |
|---|---|---|---|
| Executive Search | $204.4 million | $198.8 million | 2.8% |
| On-Demand Talent | $46.2 million | $41.1 million | 12.6% |
| Heidrick Consulting | $27.9 million | $23.3 million | 19.9% |
Financial Performance
For the three months ended September 30, 2024, consolidated net revenue increased by $15.4 million, or 5.9%, to $278.6 million compared to the same period in 2023. This growth was supported by a positive impact from foreign exchange fluctuations amounting to $0.8 million.
The Executive Search segment saw a net revenue increase of $5.6 million, primarily due to a 5.4% rise in the number of engagement confirmations. The On-Demand Talent segment reported a revenue increase of $5.2 million, attributed to higher project volumes. Heidrick Consulting experienced a significant revenue boost of $4.6 million, driven by increased leadership assessment engagements.
Consultant Productivity
The productivity metrics for consultants in the Executive Search and Heidrick Consulting segments as of September 30, 2024, were as follows:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Number of Executive Search Consultants | 414 | 417 |
| Number of Heidrick Consulting Consultants | 84 | 90 |
| Annualized Net Revenue per Executive Search Consultant | $2.0 million | $1.9 million |
| Average Revenue per Executive Search | $149,000 | $153,000 |
Expenses Overview
Consolidated salaries and benefits expenses increased by $15.8 million, or 9.5%, totaling $183.0 million for the three months ended September 30, 2024. This increase was driven by higher fixed compensation due to deferred compensation plan costs and increased base salaries.
In terms of general and administrative expenses, there was a rise of $2.2 million, or 5.8%, to $39.7 million for the same period, influenced by increased costs in technology and office occupancy.
| Expense Type | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Salaries and Benefits | $183.0 million | $167.2 million | 9.5% |
| General and Administrative | $39.7 million | $37.6 million | 5.8% |
Adjusted EBITDA
For the three months ended September 30, 2024, the consolidated Adjusted EBITDA was reported at $30.4 million, reflecting a slight increase of $1.1 million, or 3.6%, from $29.3 million in the same quarter of 2023. The Adjusted EBITDA margin was 10.9% for Q3 2024, compared to 11.2% for Q3 2023.
| Period | Adjusted EBITDA | Adjusted EBITDA Margin (%) |
|---|---|---|
| Q3 2024 | $30.4 million | 10.9% |
| Q3 2023 | $29.3 million | 11.2% |
Cash Flow Analysis
For the nine months ended September 30, 2024, cash used in operating activities was $39.8 million, primarily due to an increase in accounts receivable of $51.7 million. In contrast, cash provided by investing activities was $3.8 million, mainly from the sale of marketable securities.
| Cash Flow Category | Amount (9M 2024) | Amount (9M 2023) |
|---|---|---|
| Cash Flows from Operating Activities | ($39.8 million) | ($180.6 million) |
| Cash Flows from Investing Activities | $3.8 million | $166.7 million |
| Cash Flows from Financing Activities | ($13.4 million) | ($52.4 million) |
Income Statement Highlights
For the nine months ended September 30, 2024, the company reported a net income of $23.7 million, compared to $39.6 million for the same period in 2023. The effective tax rate for the nine months ended September 30, 2024, was 45.5% compared to 37.9% in 2023.
| Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Income | $23.7 million | $39.6 million |
| Effective Tax Rate | 45.5% | 37.9% |
How Heidrick & Struggles International, Inc. (HSII) Makes Money
Revenue Segments
Heidrick & Struggles International, Inc. (HSII) generates revenue through three main segments: Executive Search, On-Demand Talent, and Heidrick Consulting. As of September 30, 2024, the revenue figures by segment are as follows:
| Segment | Revenue (Q3 2024) | Revenue (Q3 2023) | Change (%) |
|---|---|---|---|
| Executive Search | $204.4 million | $198.8 million | 2.8% |
| On-Demand Talent | $46.2 million | $41.1 million | 12.6% |
| Heidrick Consulting | $27.9 million | $23.3 million | 19.9% |
| Total Revenue | $278.6 million | $263.2 million | 5.9% |
Executive Search
The Executive Search segment is the largest contributor to HSII's revenue, accounting for approximately 73.4% of total net revenue for Q3 2024. The net revenue for this segment increased to $615.8 million for the nine months ended September 30, 2024, a 3.3% increase from $596.1 million in the same period of 2023. The increase was driven by a 4.5% rise in the number of executive search engagements.
On-Demand Talent
On-Demand Talent revenue reached $125.9 million for the nine months ended September 30, 2024, marking a 13.1% increase from $111.4 million in 2023. This growth reflects an increase in both the volume and size of projects, further enhanced by the timing of the Atreus acquisition in February 2023.
Heidrick Consulting
The Heidrick Consulting segment reported a significant increase in revenue, reaching $80.6 million for the nine months ended September 30, 2024, compared to $66.2 million in 2023, representing a 21.7% growth. This growth is attributed to an uptick in leadership assessment and development consulting engagements.
Operating Expenses
For the three months ended September 30, 2024, HSII reported the following operating expenses:
| Expense Type | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Salaries and Benefits | $183.0 million | $167.2 million | 9.5% |
| General and Administrative Expenses | $39.7 million | $37.6 million | 5.6% |
| Cost of Services | $31.0 million | $30.7 million | 1.0% |
| Total Operating Expenses | $263.7 million | $245.8 million | 7.3% |
Profitability Metrics
HSII's Adjusted EBITDA for the three months ended September 30, 2024, was $30.4 million, with an Adjusted EBITDA margin of 10.9%. The following table outlines key profitability metrics:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $14.8 million | $15.0 million |
| Operating Income | $19.1 million | $22.1 million |
| Adjusted EBITDA | $30.4 million | $29.3 million |
| Adjusted EBITDA Margin | 10.9% | 11.2% |
Consultant Productivity
The productivity of Executive Search consultants, measured by annualized net revenue per consultant, was $2.0 million for the three months ended September 30, 2024, compared to $1.9 million for the same period in 2023. The average revenue per executive search engagement slightly decreased to $149,000 in Q3 2024 from $153,000 in Q3 2023.
Employee Metrics
As of September 30, 2024, HSII employed an average of 2,170 employees, down from 2,232 employees in the same quarter of the previous year. The number of Executive Search consultants stood at 414, while Heidrick Consulting had 84 consultants.
Conclusion of Financial Performance
Heidrick & Struggles International, Inc. continues to diversify its revenue streams through its three key segments, maintaining a robust financial performance despite fluctuations in consultant numbers and market conditions.
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Resources:
- Heidrick & Struggles International, Inc. (HSII) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Heidrick & Struggles International, Inc. (HSII)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Heidrick & Struggles International, Inc. (HSII)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.