NASDAQ$HSII

Heidrick & Struggles International Inc · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Reported record net revenue and progress in diversifying business.

Heidrick & Struggles reported Q4 2022 results with a net revenue of $235.7 million. Operating income was $19.8 million, and net income reached $16.0 million, with diluted earnings per share at $0.78. The company's focus on diversifying its business and investing in digital innovation contributed to these results.

  • Net revenue was $235.7 million; on a constant currency basis net revenue was $243.9 million.
  • Operating income and Adjusted EBITDA were $19.8 million and $30.9 million, respectively; operating margin was 8.4% and Adjusted EBITDA margin was 13.1%.
  • Net income was $16.0 million and diluted earnings per share was $0.78.
  • Acquired Atreus, a leading German on-demand talent business, on February 1, 2023; expands diversification strategy embarked upon in 2021 with the acquisition of BTG in the U.S.

Headline financials

Total Revenue

$236M

Previous: $286M-17.4%
EPS (adj)

$0.78

Previous: $1.02-23.5%
Consultant Productivity

$2M

Previous: $2.7M-25.9%
Avg Revenue per Exec Search

$150K

Previous: $144K+4.2%
Adjusted EBITDA

$30.9M

Previous: $36.8M-16.0%
Adjusted EBITDA Margin

13.1%

Previous: 12.9%+1.6%
Capital Expenditures

$2.96M

Previous: $2.34M+26.5%
Free Cash Flow

$157M

Previous: $204M-23.0%
Net Income

$16M

Previous: $12.5M+28.4%
Operating Income

$19.8M

Previous: $16.6M+19.6%
Gross Profit

$64.4M

Previous: $65.1M-1.2%
Cash & Equivalents

$355M

Previous: $545M-34.8%
Total Assets

$1.18B

Previous: $1.11B+6.2%
Stock-Based Comp

$5M

Previous: $4.09M+22.3%

Revenue & EPS history

Heidrick & Struggles · Revenue · Quarterly

$236M

Q4 2022-17.4%vs Q4 2021
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Revenue by segment

Heidrick & Struggles · $236M total across 3 segments · Q4 2022

  • Executive Search
    $193M-20.8%
  • On-Demand Talent
    $22.4M-5.3%
  • Heidrick Consulting
    $20.7M+11.6%

Forward guidance

The Company expects 2023 first quarter consolidated net revenue of between $235 million and $255 million, while acknowledging that continued fluidity in external factors such as the foreign exchange and interest rate environments, foreign conflicts, inflation and macroeconomic constraints on pricing actions may impact quarterly results.

Tailwinds

  • Expects 2023 first quarter consolidated net revenue of between $235 million and $255 million
  • Outlook is based on the average currency rates in December 2022
  • Reflects management's assumptions for the anticipated volume of new Executive Search confirmations
  • Reflects management's assumptions for On-Demand Talent projects, and Heidrick Consulting assignments
  • Reflects management's assumptions for consultant productivity and consultant retention

Headwinds

  • Acknowledges continued fluidity in external factors such as the foreign exchange and interest rate environments
  • Acknowledges foreign conflicts
  • Acknowledges inflation
  • Acknowledges macroeconomic constraints on pricing actions
  • These factors may impact quarterly 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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