Yahoo Finance

• Revenue: Approximately $284 million, a 7% increase compared to Q1 2024.

• Adjusted EBITDA: Improved by $3.3 million to $29.1 million.

• Adjusted EBITDA Margin: Expanded 50 basis points to 10.3%.

• Salaries and Benefits: Increased 8.6% from the prior quarter, accounting for 66.8% of net revenue.

• General Administrative Expenses: $41.4 million, improved 100 basis points to 14.6% of net revenue.

• R&D Spend: $6.4 million, or 2.3% of net revenue.

• Executive Search Revenue: Grew 6% to $213 million.

• On-Demand Talent Revenue: Increased 12% to $43 million.

• Heidrick Consulting Revenue: Organic revenue increased 7% to $28 million.

• Adjusted Net Income: $14.2 million, compared to $14 million last year.

• Adjusted Diluted EPS: $0.67, consistent with the year-ago period.

• Cash Position: $325 million, up $72 million from the end of March 2024.

• Q2 Revenue Guidance: Expected to be within a range of $285 million to $305 million.

• Warning! GuruFocus has detected 4 Warning Signs with HSII.

Release Date: May 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Heidrick & Struggles International Inc (NASDAQ:HSII) delivered strong Q1 2025 results, with revenue reaching approximately $284 million, marking a 7% increase compared to Q1 2024.

• The company exceeded the high end of its outlook with robust profitability, as adjusted EBITDA improved by $3.3 million to $29.1 million, and the adjusted EBITDA margin expanded by 50 basis points to 10.3%.

• The executive search segment saw revenue growth of 6% to $213 million, with improved profitability and an adjusted EBITDA margin of 24.5%.

• On-demand talent revenue increased by 12% to $43 million, marking continued outperformance amid market dynamics, and achieved profitability with an adjusted EBITDA of $0.4 million.

• The company maintains a strong cash position of $325 million, up $72 million from the previous year, providing strength and flexibility for future investments and shareholder returns.

Negative Points

• Operating expenses increased, with salary and benefits rising by 8.6% from the prior quarter, impacting overall profitability.

• There was a $3.7 million operational reorganization charge, which affected the percentage of net revenue allocated to salaries and benefits.

• Heidrick consulting reported an adjusted EBITDA loss of $2.1 million for the quarter, indicating challenges in achieving profitability in this segment.

• The current economic climate heightens uncertainty, potentially leading clients to delay or pause projects, which could impact future revenue.

• Despite strong Q1 results, there is caution about potential volatility in the second half of the year due to economic uncertainty and client decision-making dynamics.