Heidrick & Struggles Reports $1.1 Billion Revenue with 7% Growth, Faces Profitability Challenges

Heidrick & Struggles International, Inc. reported a consolidated net revenue of $1.1 billion for the fiscal year ending December 31, 2024, marking a 7.0% increase from $1.0 billion in 2023. The growth was driven by a 4.9% rise in Executive Search revenue, which reached $818.4 million, attributed to higher average revenue per search. The On-Demand Talent segment also saw a significant increase of 10.4%, generating $168.3 million, while Heidrick Consulting's revenue surged by 18.6% to $111.9 million, largely due to increased leadership assessment engagements and the impact of recent acquisitions.

Despite the revenue growth, the company faced challenges in profitability, with net income dropping to $8.7 million from $54.4 million in the previous year. This decline was primarily due to a substantial impairment charge of $59.5 million, which included $58.0 million related to the On-Demand Talent reporting unit. Adjusted EBITDA decreased to $111.2 million, representing an 11.4% decline from $125.6 million in 2023, with the Adjusted EBITDA margin falling to 10.1% from 12.2%. The increase in operating expenses, particularly in salaries and benefits, contributed to this decline.

Strategically, Heidrick & Struggles made significant acquisitions in 2023, including Atreus Group GmbH, enhancing its On-Demand Talent capabilities in Europe, and businessfourzero, which expanded its consulting services. These acquisitions are expected to bolster the company's service offerings and market presence. The firm also reported a slight increase in its consultant headcount, with 418 in Executive Search and 85 in Heidrick Consulting as of December 31, 2024.

Operationally, the company maintained a strong cash position, ending the year with $563.5 million in cash, cash equivalents, and marketable securities, up from $478.2 million in 2023. The firm also reported a slight increase in average revenue per Executive Search consultant, which rose to $2.0 million in 2024. However, the company noted that the average revenue per search increased to $146,000, up from $140,000 in the prior year, indicating improved efficiency in its search operations.

Looking ahead, Heidrick & Struggles anticipates continued growth in its core segments, driven by strategic investments and an expanding client base. However, the company remains cautious about potential macroeconomic challenges and their impact on demand for its services. The firm is focused on leveraging its recent acquisitions and enhancing its service offerings to navigate these challenges effectively.