Heidrick & Struggles Posts 11 Percent Revenue Increase for Q1

The Chicago-based firm had all business lines provide positive growth for the first quarter of the year. “During the first quarter we generated double-digit top line growth achieving the high end of our guidance range with solid margin performance," stated Tom Monahan, CEO. Hunt Scanlon Media takes a closer look inside these just released numbers from the fourth largest search firm.

May 7, 2024 – Executive search, leadership consulting, and culture shaping services provider Heidrick & Struggles / (NASDAQ:HSII) has posted first quarter revenues of $265.2 million, an 11 percent increase from a year ago. Revenues included the acquisition of Atreus Group GmbH completed on February 1, 2023 and the acquisition businessfourzero completed on April 1, 2023. The firm experienced revenue growth in On-Demand Talent, Heidrick Consulting, and executive search in the Americas and Europe, partially offset by a decrease in executive search in Asia Pacific. 

Executive search net revenue of $201.5 million increased 5.8 percent compared to net revenue of $190.5 million in the 2023 first quarter. Net revenue increased 7.3 percent in the Americas (up 7.1 percent on a constant currency basis), increased 6.6 percent in Europe (up 4.3 percent on a constant currency basis), and decreased 3.7 percent in Asia Pacific (down 0.9 percent on a constant currency basis) when compared to the prior year first quarter. All practice groups, except for consumer and industrial, exhibited growth over the prior year period.

Heidrick had 424 executive search consultants at March 31, 2024, compared to 432 at March 31, 2023. Productivity, as measured by annualized executive search net revenue per consultant, was $1.9 million compared to $1.8 million in the 2023 first quarter, reflecting a lower number of consultants combined with higher revenue. Average revenue per executive search was approximately $136,000 compared to $124,000 in the prior year period. The number of search confirmations decreased 3.2 percent compared to the year-ago period.

On-Demand Talent net revenue of $37.9 million increased 21.7 percent compared to net revenue of $31.1 million in the 2023 first quarter, primarily due to the acquisition of Atreus. Foreign exchange rate fluctuations positively impacted results by $0.3 million, or 0.8 percent.

Heidrick Consulting net revenue of $25.9 million increased 46 percent compared to net revenue of $17.7 million in the 2023 first quarter due to the acquisition of businessfourzero and increases in leadership assessment and development engagements. Excluding the impact of exchange rate fluctuations, which positively impacted results by 2.2 percent, or $0.4 million, Heidrick Consulting net revenue increased 43.8 percent, or $7.8 million, compared to the prior year period. The company had 95 Heidrick Consulting consultants at March 31, 2024, compared to 78 at March 31, 2023.

Net income was $14.0 million and diluted earnings per share was $0.67, with an effective tax rate of 38.8 percent driven by the non-deductibility of earnout expense associated with the acquisitions of Atreus and businessfourzero. This compares to net income of $15.6 million and diluted earnings per share of $0.76, with an effective tax rate of 31.7 percent, in the 2023 first quarter.

Related: Heidrick & Struggles Appoints New Global and Regional Leaders

“During the first quarter we generated double-digit top line growth achieving the high end of our guidance range with solid margin performance,” stated Tom Monahan, CEO. “For the clients we serve, more than ever before, driving great corporate performance requires discovering, accessing, evaluating and enabling exceptional leadership. During my first two months as CEO, I have come to fully appreciate the vast market opportunity we have in front of us given the vital and expanding nature of the client needs we address, and our inherent strengths including our strong collection of intellectual property and people, trust in the Heidrick brand and our deep relationships at the c-suite and board levels.”

“Looking ahead, it is clear we need to more consistently and forcefully use these tremendous assets to create value for our clients, people and shareholders,” Mr. Monahan said. “Together with our leadership team, I am tightly focused on empowering our highly talented people to effectively meet client needs through clearer offer strategies, an intense focus on organic service innovation and even more robust technology.” 

Newly Appointed CEO and President

Heidrick recently announced that Krishnan Rajagopalan has decided to retire, after more than 23 years with the firm. Following a planned succession process, the board has appointed Mr. Monahan to succeed Mr. Rajagopalan as CEO and member of the board, effective March 4. Mr. Monahan currently serves as managing partner of Norton Street Holdings and was previously president and CEO of DeVry University. Mr. Rajagopalan will step down, effective March 4, 2024, and will retire from the firm as of April 1, 2024, after which he will continue to serve as an advisor. “Search firms are highly focused on trying to leverage data, innovative technology, analytics, and IT to not only lift their client’s performance, but also their own,” said Scott Scanlon, CEO of Hunt Scanlon Media. “Bringing in this outsider at this time makes a whole lot of sense.”

Heidrick & Struggles Closes Atreus Acquisition
Heidrick & Struggles has closed the acquisition of Atreus, one of the leading players for executive interim management in Germany. Together, Atreus and Heidrick & Struggles’ wholly owned, U.S.-based Business Talent Group (BTG), which was acquired in 2021, constitute the company’s on-demand talent segment and build on its strong market position in this space. The brand name Atreus, well-known in the German market, will be retained, and the Atreus management team, led by Dr. Harald Linné and Rainer Nagel, will remain in place.

“The board of directors, including Krishnan, have thoughtfully and deliberately developed this succession plan, and we are confident these leadership announcements position Heidrick & Struggles for continued success well into the future,” said Adam Warby, chairman of the board of Heidrick & Struggles. “Tom Monahan is a proven and innovative executive with a deep passion for the leadership arena and a unique view into what matters – and what works – when driving corporate performance. Tom’s decades of experience in growing technology-enabled services firms focused on delivering C-suite advice makes him the right person to build on our strengths in leadership advisory and to unlock transformative growth through our strategy of innovative diversification.

Related: Heidrick & Struggles to Acquire London-based businessfourzero

“Anyone who knows me, understands that I am passionate about the work of finding, developing, and supporting great leaders,” said Mr. Monahan. “Heidrick & Struggles has shaped the leadership advisory industry for decades. As a longtime client, I can see endless possibilities to extend our strength in search, which will continue to be the cornerstone of our strategy, and leverage our diverse assets — including our On-Demand, Consulting and Digital solutions — to deliver value for our clients and our shareholders, and I look forward to leading the company’s talented team as we help clients put the right leadership teams and strategies in place to change the world.”

Heidrick also announced that Mr. Murray, global managing partner of Executive Search, will become president, reporting to Mr. Monahan, effective March 4. In addition to continuing to lead Executive Search, he will have operational responsibility for On-Demand Talent, Heidrick Consulting and Go-to-Market in his new role. Based in Heidrick’s Boston office, Mr. Murray is a member of the global management committee and is responsible for leading the firm’s global executive search business and client operations.


Heidrick expects 2024 second quarter consolidated net revenue of between $255 million and $275 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.

In addition, this outlook is based on the average currency rates in March 2024 and reflects, among other factors, management’s assumptions for the anticipated volume of new Executive search confirmations, On-Demand Talent projects, and Heidrick Consulting assignments, consultant productivity, consultant retention, and the seasonality of the business along with the current backlog.

Related: Heidrick & Struggles Enters Agreement to Acquire RosExpert in Russia and WE Partners in Ukraine and Kazakhstan

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media

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