Heidrick & Struggles International (HSII) Q2 2024 earnings summary

Executive summary

• Q2 2024 net revenue reached $278.6 million, up 2.7% year-over-year and surpassing the high end of guidance, with growth across all business lines except Executive Search in Europe.

• Adjusted EBITDA was $28.8 million (10.3% margin), down from $34.9 million (12.9% margin) in Q2 2023, reflecting non-recurring expenses and operational efficiency.

• Net loss for Q2 2024 was $5.2 million, driven by $16.2 million in goodwill impairment and $6.9 million in restructuring charges.

• Leadership changes and organizational realignment were implemented to accelerate growth, efficiency, and digital transformation.

• A $0.15 per share cash dividend was declared for the quarter.

Financial highlights

• Q2 2024 net revenue was $278.6 million; total revenue was $282.9 million, up 3.3% year-over-year.

• Adjusted net income was $14.1 million and adjusted diluted EPS was $0.67, compared to $15.0 million and $0.73 in Q2 2023.

• Net cash from operating activities was $62.5 million in Q2 2024.

• Cash, cash equivalents, and marketable securities totaled $296.9 million at June 30, 2024, with no debt.

• Six-month net revenue was $543.8 million, up 6.5% year-over-year.

Outlook and guidance

• Q3 2024 consolidated net revenue is expected between $260 million and $280 million.

• Management expects available cash, operating funds, and credit facility to be sufficient for at least the next 12 months.

• Tax rate expected to be around 38% for 2024-2025 due to non-deductible acquisition earn-out costs, normalizing to low 30% range thereafter.

• Focus remains on expanding digital and consulting offerings and optimizing cost structure.

• Guidance is subject to risks from FX volatility, interest rates, inflation, geopolitical conflicts, and macroeconomic constraints.