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Heidrick & Struggles Posts 46.6 Percent Q1 Revenue Gain
Heidrick & Struggles / (NASDAQ:HSII) has posted first quarter revenues of $283.9 million, an increase of 46.6 percent vs. the prior year period. Revenue growth was driven by all regions in executive search, by Heidrick Consulting, and by the addition of on-demand talent.
Executive search revenue of $242.5 million increased by $62.9 million, or 35 percent, compared to net revenue of $179.6 million in the 2021 first quarter. Revenue increased 39.5 percent in the Americas, 32.1 percent in Europe, and 18.8 percent in Asia-Pacific. All industry practices exhibited growth compared to the prior year.
“We are pleased with yet another quarter of record financial performance that builds on our solid foundation of ongoing and deliberate shareholder value creation,” said Krishnan Rajagopalan, president and CEO of Heidrick. “Today’s announcement marks five consecutive quarters of record year-over-year net revenue results for Heidrick achieved by strong productivity in executive search, growth from our on-demand talent business, and the expanding impact of Heidrick Consulting’s advisory work, all while we continue partnership incubation for future digital innovation.”
“Companies across all industries and regions know that top talent, whether permanent, interim or project-based, quality work environments, and data-driven actionable insights are business imperatives now more than ever, contributing to demand for our products and services,” said Mr. Rajagopalan. “Heidrick’s differentiated strategy is working, and we look to the future to continue to benefit from an increasingly diversified mix of businesses, with cross collaboration opportunities expected to amplify our long-term business success.”
Heidrick had 394 executive search consultants on March 31, compared to 373 on March 31, 2021. Productivity, as measured by annualized executive search net revenue per consultant, was $2.5 million compared to $1.9 million in the 2021 first quarter. Average revenue per executive search was approximately $124,000 compared to $113,000 a year earlier. The number of confirmed searches increased 23.1 percent compared to the year-ago period.
On-demand talent, a new business segment which the firm acquired on April 1, 2021, generated net revenue of $23.4 million, exceeding the company’s expectations.
Heidrick Consulting net revenue of $17.9 million increased by $3.9 million, or 27.7 percent, compared to net revenue of $14.0 million in the 2021 first quarter. The company had 70 Heidrick Consulting consultants on March 31, compared to 64 on March 31, 2021.
The Chicago-headquartered recruiter — the fifth largest global firm as ranked by Hunt Scanlon Media — recorded net income $18.5 million and diluted earnings per share was $0.90 with an effective tax rate of 33.7 percent. This compares to net income of $14.8 million and diluted earnings per share of $0.74, with an effective tax rate of 34.9 percent, in the 2021 first quarter. Excluding the restructuring charge in the 2021 first quarter, adjusted net income was $17.4 million and adjusted diluted earnings per share was $0.86.
During the quarter, Heidrick’s board of directors declared a 2022 first quarter cash dividend of $0.15 per share payable on May 20, to shareholders of record at the close of business on May 6.
