Heidrick & Struggles International Inc (HSII) Reports Q3 2023 Earnings
Heidrick & Struggles International Inc (NASDAQ:HSII) reported a 3% YoY increase in net revenue, reaching $263.2 million in Q3 2023.
The company's operating income rose to $22.1 million, marking an increase of $8.6 million sequentially.
HSII's net income was $15.0 million, with diluted earnings per share standing at $0.73.
The company's Board of Directors declared a Q4 2023 cash dividend of $0.15 per share.
On October 25, 2023, Heidrick & Struggles International Inc (NASDAQ:HSII) released its financial results for the third quarter ending September 30, 2023. The company reported a 3% year-over-year increase in net revenue, reaching $263.2 million. Operating income rose to $22.1 million, marking an increase of $8.6 million sequentially. The operating margin stood at 8.4%. Adjusted EBITDA was reported at $32.3 million, a decrease of $4.1 million sequentially, with an adjusted EBITDA margin of 12.3%. The net income for the quarter was $15.0 million, with diluted earnings per share standing at $0.73.
Performance Highlights
Heidrick & Struggles International Inc (NASDAQ:HSII) reported growth in its On-Demand Talent, Heidrick Consulting, and Executive Search in Europe segments. However, this was partially offset by declines in Executive Search in Asia Pacific and the Americas. The company's net revenue for Executive Search was $198.8 million, reflecting a decrease in the volume of executive search confirmations. On-Demand Talent net revenue increased by 76.6% to $41.1 million, primarily due to the acquisition of Atreus Group GmbH. Heidrick Consulting net revenue stood at $23.3 million, marking an increase due to organic growth and the acquisition of businessfourzero.
Financial Position
HSII's consolidated salaries and benefits decreased by $4.3 million, or 2.5%, to $167.2 million compared to $171.5 million in Q3 2022. General and administrative expenses increased by $5.4 million, or 16.7%, to $37.6 million. The company's cash, cash equivalents, and marketable securities at the end of September 2023 amounted to $334.0 million. Net cash provided by operating activities was reported at $109.5 million.
Company's Outlook
For Q4 2023, Heidrick & Struggles International Inc (NASDAQ:HSII) expects consolidated net revenue to be between $240 million and $260 million. This outlook is based on the average currency rates in September 2023 and reflects management's assumptions for the anticipated volume of new Executive Search confirmations, On-Demand Talent projects, and Heidrick Consulting assignments.
Dividend Declaration
The Board of Directors declared a Q4 2023 cash dividend of $0.15 per share, payable on November 21, 2023, to shareholders of record at the close of business on November 7, 2023.
CEO's Commentary
Heidrick & Struggles President and Chief Executive Officer, Krishnan Rajagopalan, commented on the results,
We are very pleased with our third quarter results, posting year over year revenue growth and another double-digit adjusted EBITDA margin quarter despite ongoing macro uncertainty. These results reflect the benefits of our One Heidrick strategy, which is to bring the best permanent executive level and on-demand talent to our clients, and to help leadership and organizations be more effective through our diversified product offering."
Explore the complete 8-K earnings release (here) from Heidrick & Struggles International Inc for further details.
This article first appeared on GuruFocus.
