NASDAQ$HSII

Heidrick & Struggles International Inc · Q4 2019 earnings

Q4 2019 earnings · · Investor relations

Briefing

Heidrick & Struggles' Q4 2019 financial results were announced, with net revenue at the high end of guidance.

Heidrick & Struggles reported Q4 2019 net revenue of $180.0 million, which was at the high end of their guidance. While this was a decrease of 2.8% compared to Q4 2018, the company highlighted Heidrick Consulting's sequential net revenue growth and their focus on operational efficiencies.

  • Net revenue for the fourth quarter was $180.0 million, at the high end of the company's guidance.
  • Heidrick Consulting's net revenue was $17.0 million in the fourth quarter, marking the third consecutive quarter of sequential growth.
  • The average revenue per executive search was $149,300, compared to $142,000 in the fourth quarter of 2018.
  • Cash and marketable securities totaled $332.9 million at the end of the year.

Headline financials

Total Revenue

$180M

Previous: $185M-2.8%
EPS (adj)

$0.54

Previous: $0.58-6.9%
Consultant Productivity

$1.7M

Previous: $1.9M-10.5%
Avg Revenue per Exec Search

$149K

Previous: $142K+5.1%
Adjusted EBITDA

$20.5M

Previous: $22.2M-7.9%
Adjusted EBITDA Margin

11.4%

Previous: 12.0%-5.0%
Capital Expenditures

$711K

Previous: $1.02M-30.4%
Free Cash Flow

$42.5M

Previous: $125M-65.9%
Net Income

$10.6M

Previous: $11.2M-5.7%
Operating Income

$14.3M

Previous: $16.7M-14.4%
Gross Profit

$54.8M

Previous: $57.6M-5.0%
Cash & Equivalents

$272M

Previous: $280M-2.9%
Total Assets

$844M

Previous: $701M+20.5%
Stock-Based Comp

$3.05M

Previous: $2.18M+39.6%

Revenue & EPS history

Heidrick & Struggles · Revenue · Quarterly

$180M

Q4 2019-2.8%vs Q4 2018
Beat estimate in 11 of 16 quarters(69%)
ActualEstimate

Revenue by segment

Heidrick & Struggles · $180M total across 2 segments · Q4 2019

  • Executive Search
    $163M-3.3%
  • On-Demand Talent
    $17M+1.4%

Forward guidance

The company expects 2019 first quarter consolidated net revenue of between $165 million and $175 million.

Tailwinds

  • The outlook is based on the average currency rates in December 2019.
  • The outlook reflects management’s assumptions for the anticipated volume of new Executive Search confirmations.
  • The outlook reflects management’s assumptions for Heidrick Consulting assignments.
  • The outlook reflects management’s assumptions the current backlog.
  • The outlook reflects management’s assumptions consultant productivity and consultant retention, and the seasonality of its business.

Headwinds

  • The company is proactively monitoring the significant level of uncertainty associated with the Coronavirus.
  • The company is keeping in close communication with its team and clients in affected regions.
  • The situation is still fluid and it is too early to quantify.
  • It is reasonable to assume that along with the reported economic pressure, the Coronavirus could have a related impact on first quarter results.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 6 quarterly earnings reports

Historical avg

+2.0%

Avg return

Earnings day

+10.0%

Avg return

5 days after

+10.5%

Avg return

30 days after

58%

37 / 64 earnings

Positive

+27.6%

Q4 2018

Best reaction

-19.4%

Q1 2022

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q4 2025
Q3 2025+0.0%-0.0%+0.3%
Q2 2025+4.8%+3.8%+15.9%
Q1 2025+3.8%+8.2%+11.4%
Q4 2024+12.3%+18.0%+4.1%
Q3 2024+7.6%+20.7%+16.7%
Q2 2024+14.3%+6.1%+6.4%
Q1 2024-1.4%+8.3%+16.6%
Q4 2023+16.5%+15.2%+12.6%
Q3 2023+7.6%
Q2 2023+3.8%
Q1 2023-11.1%
Q4 2022+14.8%
Q3 2022-5.4%
Q2 2022+1.5%
Q1 2022-19.4%
Q4 2021-5.6%
Q3 2021+2.1%
Q2 2021+3.0%
Q1 2021+7.7%
Q4 2020+8.6%
Q3 2020+9.0%
Q2 2020+1.1%
Q1 2020-3.5%
Q4 2019-18.6%
Q3 2019+1.3%
Q2 2019-3.1%
Q1 2019-8.5%
Q4 2018+27.6%
Q3 2018+25.5%
Q2 2018+18.2%
Q1 2018+18.4%
Q4 2017+1.2%
Q3 2017+15.7%
Q2 2017-10.6%
Q1 2017-15.9%
Q4 2016+13.7%
Q3 2016-13.4%
Q2 2016+19.7%
Q1 2016-16.6%
Q4 2015-0.4%
Q3 2015+26.4%
Q2 2015-6.1%
Q1 2015+4.2%
Q4 2014+2.3%
Q3 2014-4.7%
Q2 2014+5.6%
Q1 2014-2.3%
Q4 2013+2.4%
Q3 2013+0.3%
Q2 2013+2.6%
Q1 2013+11.6%
Q4 2012-17.6%
Q3 2012-0.5%
Q2 2012-14.8%
Q1 2011-5.6%
Q1 2012-0.8%
Q4 2009+2.7%
Q4 2011+2.7%
Q3 2010+1.2%
Q3 2011+1.2%
Q2 2011-2.2%
Q2 2010-2.2%
Q4 2010-2.2%
Q1 2010-4.0%

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