Net revenue

World – Heidrick and Struggles’ fourth quarter net sales soar 77.4%

March 01, 2022

Executive search firm Heidrick & Struggles International Inc. (NASDAQ: HSII) reported a 77.4% increase in net revenue in the fourth quarter year-over-year.

Excluding the impact of exchange rate fluctuations, which negatively impacted results by $1.0 million year-over-year, consolidated net revenues increased by $125.5 million , or 78.0%. Net revenue growth was driven by all regions in Executive Search, Heidrick Consulting and the addition of On-Demand Talent.

“We are very pleased with our outstanding fourth quarter and year-end performance, which continues to lay the foundation for continued creation of shareholder value,” said Heidrick & Struggles President and CEO. . “2021 has been an exciting year of geographic expansion and industry-leading productivity in executive search, increased demand for our wide range of leadership, organizational effectiveness and culture-shaping offerings. from Heidrick Consulting, the addition of our high-growth On-Demand Talent business segment, and the initiation of a partnership for future digital innovation. Our record results demonstrate that our differentiated strategy is working.”

(in thousands of dollars) Q4 2021 Q4 2020 % change
Net revenue 285,539 160,987 77.4%
Refunds 1,654 1,200 37.8%
Total revenue 278 193 162 187 77.1%
Net revenue 12,477 5,538 125.3%

Adjusted EBITDA was $36.8 million, an increase of 69% and Adjusted EBITDA margin was 12.9%.

The company recorded a one-time earnout charge of $11.4 million in the fourth quarter of 2021 associated with its On-Demand Talent business.

The group noted that it recorded a restructuring charge of $4.3 million primarily related to a reduction in the company’s real estate footprint. Including these charges, operating profit was $16.6 million, compared to $8.5 million in the fourth quarter of 2020.

On-Demand Talent, a new business segment the company acquired on April 1, 2021, generated net revenue of $23.6 million and exceeded company expectations.

Executive Search Revenue by Geography

(in thousands of dollars) Q4 2021 Q4 2020 % change
Americas 168,700 96,328 75.1%
Europe 45,084 32 135 40.3%
Asia Pacific 29,579 17,857 65.6%
Total executive search 243 363 146,320 66.3%
Talent on Demand 23,630
Heidrick Consulting 18,546 14,667 26.4%

Annual results

(in thousands of dollars) 2021 2020 % change
Net revenue 1,003,001 621 615 61.4%
Refunds 5,473 7,755 -29.4%
Total revenue 1,008,474 629 370 60.2%
Net loss/income 72,572 (37,707)

Advice

The company expects consolidated net revenue for the first quarter of 2022 to be between $270 million and $280 million, while acknowledging the continued fluidity of the Covid-19 pandemic and the instability in Ukraine and Russia which could have an impact on quarterly results.

In addition, this outlook is based on average exchange rates in December 2021 and reflects, among other factors, management’s assumptions regarding the expected volume of new executive hire confirmations, Heidrick Consulting assignments, talent projects demand and current backlog, consultant productivity, consultant retention and seasonality of business.

Shares of Heidrick & Struggles International closed at $42.75, down 1.27% on the day and 14.55% below its 52-week high of $50.03, set on October 8, 2021 The company has a market capitalization of $837.54 million.