Heidrick & Struggles Posts 15 Percent Revenue Gain in 2018

One of the nation's top executive search firms delivers its annual revenue report to Wall Street. Let’s go inside the latest numbers.

February 26, 2019 – Executive search, leadership consulting and culture shaping services provider Heidrick & Struggles International / (NASDAQ:HSII) posted global revenues of $716 million in 2018, a 15.2 percent increase from revenues of $621.4 million the year before. The Chicago-headquartered recruiter – the third largest in the Americas as ranked by Hunt Scanlon Media last year – reported net income of $49.3 million, or $2.52 per share, on the year.

“We achieved another strong quarter that contributed to our second consecutive year of record net revenue as we execute on our plan to drive profitable growth and operating excellence,” said Krishnan Rajagopalan, president and CEO of Heidrick. “The launch of Heidrick Consulting in 2018 perfectly complements our executive search business and enhances our ability to help clients navigate volatile and fast-changing markets. Our fourth quarter and 2018 results reflect the tremendous efforts and contributions of our employees globally and I extend my sincere appreciation,” he said.

For the fourth quarter, the firm recorded revenues of $185.3 million, a gain of 9.4 percent from revenues of $169.4 million a year ago. Executive search net revenue increased 13.2 percent year over year, or $19.6 million, to $185.3 million from $169.4 million in the 2017 fourth quarter. All three reporting regions contributed to growth in executive search. Net revenue increased 20.2 percent in the Americas region, 0.3 percent in Europe, and 4.7 percent in Asia Pacific. The four largest industry practices – financial services, industrial, global technology & services, and consumer markets – all contributed to growth in the fourth quarter.

Positive Outlook

“The new year has started well and our outlook for the executive search and leadership advisory markets is positive,” Mr. Rajagopalan said. “Heidrick & Struggles continues to effectively introduce new data-driven, tech-enabled platforms and offer an expanded range of executive talent and human capital solutions to help our clients accelerate their performance.”

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Our announcement last month of an exclusive agreement with Business Talent Group (BTG), for example, allows us to offer our clients seamless access to BTG’s pool of top-tier independent professionals for specialized project-based work,” he said. “Our own digital transformation – driving and leveraging our propriety IP-based solutions and data – will continue to distinguish Heidrick & Struggles in the market, as will our commitment to building and fostering a diverse talent landscape.”

Leadership Appointments

Heidrick recently announced three new leadership appointments to support the firm’s long-term growth strategy. Jenni Hibbert assumes the role of global practice managing partner of the financial services practice. Dan Ryan becomes regional leader for the Americas. And Stephen Schwanhausser was named global practice managing partner of the consumer markets practice.

Ms. Hibbert has been regional practice managing partner for financial services in Europe and Africa since 2017 and previously led the U.K. financial services practice. Mr. Ryan continues to work with the firm’s senior management and office leaders to continue driving profitable growth in the Americas. Mr. Schwanhausser was previously co-managing partner for the global consumer products sector and earlier led that sector in the Americas.

“Succession planning is a core service we provide our clients to help them effectively manage change and the future growth of their companies,” said Mr. Rajagopalan. “We also have a strong focus on succession planning within our firm, and we work closely with our leaders to help them grow and take on new challenges. The leaders that have been appointed into their new positions have proven track records of managing with agility and delivering results, and they will play key leadership roles as we continue to expand our search and consulting offerings.”


Late last year, Heidrick & Struggles named Sarah Payne as its new chief human resources officer. Rick Greene, Heidrick’s current CHRO, will move into the Heidrick Consulting business as a partner. Both leadership changes became effective on January 1st.

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Ms. Payne had served as vice president of human resources, global executive search, where she worked closely with Heidrick & Struggles’ global human resources team and regional leadership teams “to create employee-focused solutions that have supported the company during a period of significant growth and innovation,” the firm said. “She has demonstrated her ability to effectively align people and business strategies and will bring nearly 20 years of HR experience and leadership into the CHRO role.”

“As Heidrick & Struggles continues to grow and evolve into a data-driven leadership advisor and people solutions provider, strong leadership and collaboration with our human resources teams will remain integral to our success,” said Mr. Rajagopalan. “Sarah’s proven leadership record and experience with total rewards, employee engagement and development, talent management and acquisition will be critical in the ongoing growth and development of our global workforce.”

Looking Forward

“Heidrick & Struggles is committed to investing for growth and returning excess cash to our shareholders,” said Mark Harris, CFO of Heidrick. “By generating strong adjusted free cash flow, we have the flexibility to do both. Our announcement today of an increase to the quarterly cash dividend reflects our positive outlook for the business and demonstrates the confidence we have in our ability to generate strong cash flow over the long-term. We also remain committed to a well-balanced capital allocation strategy, and have $21.7 million remaining under our current share buyback authorization,” he said.

Heidrick expects 2019 first quarter consolidated net revenue of between $165 million and $175 million. This outlook is based on the average currency rates in December 2018 and reflects, among other factors, management’s assumptions for the anticipated volume of new executive search confirmations, Heidrick Consulting assignments, the current backlog, consultant productivity, consultant retention, and the seasonality of its business.

Shares of Heidrick traded up $0.05 during trading hours on Monday, hitting $33.86. The search firm has a one year low of $20.95 and a one year high of $45.29. Its market cap now stands at $641.9 million.

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media

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