Heidrick & Struggles Q2 2025 slides: double-digit growth across all segments

Introduction & Market Context

Heidrick & Struggles International (NASDAQ:HSII) presented its second quarter 2025 results on August 4, 2025, revealing strong performance across all business segments. The executive search and consulting firm reported significant revenue growth and margin expansion, continuing the positive momentum from the first quarter.

The company’s stock closed at $43.05 on August 4, up 1.09% for the day, reflecting investor confidence ahead of the earnings presentation. HSII has been trading in a 52-week range of $35.38 to $49.02, with the current price sitting comfortably in the upper half of that range.

Quarterly Performance Highlights

Heidrick & Struggles delivered quarterly net revenue of $317.2 million in Q2 2025, representing a substantial improvement over the $284 million reported in Q1 2025. The company achieved an adjusted EBITDA of $33.9 million with a margin of 10.7%, showing continued expansion from the 10.3% margin reported in the previous quarter.

Net income for Q2 reached $21.1 million, translating to diluted earnings per share of $0.99. On an adjusted basis, net income was $18.1 million with adjusted diluted EPS of $0.85, significantly higher than the $0.67 reported in Q1 2025.

As shown in the following financial highlights:

The company demonstrated impressive growth across all three business segments:

• Executive Search revenue grew 13.4% year-over-year with an adjusted EBITDA margin of 22.9%
• On-Demand Talent revenue increased 14.3% year-over-year with an adjusted EBITDA margin of 2.1%
• Heidrick Consulting revenue rose 16.6% year-over-year with an adjusted EBITDA margin of 1.8%

The segment performance breakdown illustrates how the company is successfully diversifying its revenue streams:

Strategic Initiatives

Heidrick & Struggles is positioning itself as "the only global leadership advisory firm to focus exclusively on the full spectrum of executive and high-end talent solutions." The company’s investment highlights emphasize its preeminent leadership consultancy status, expanding addressable market, and new leadership team.

The company’s strategic framework is built around creating unrivaled value for clients through differentiated services, deep client relationships, and durable engagement models:

In early 2024, Heidrick & Struggles appointed CEO Tom Monahan and President Tom Murray, followed by CFO Nirupam Sinha in January 2025. This new leadership team has established a client-led culture and is optimizing resource allocation to drive growth and profitability.

The company’s strategy centers on three interconnected business segments that collectively address the full spectrum of executive talent solutions:

Detailed Financial Analysis

Examining the longer-term financial trends reveals Heidrick & Struggles’ consistent growth trajectory. The company has achieved a 9.9% CAGR in revenue and a 10.3% CAGR in adjusted EBITDA since Q1 2018, demonstrating resilience through various economic cycles, including the pandemic.

The following chart illustrates this long-term revenue and adjusted EBITDA growth:

Notably, the company has maintained profitability for 45 consecutive quarters, with adjusted diluted EPS increasing from $0.53 in Q2 2018 to $0.85 in Q2 2025:

Breaking down the performance by segment, Executive Search remains the largest revenue contributor with $238.2 million in Q2 2025, representing a 7.0% CAGR since Q1 2018:

Meanwhile, Heidrick Consulting has shown impressive growth with an 11.4% CAGR since Q1 2018, reaching $31.2 million in Q2 2025:

The Executive Search segment’s operational metrics also show positive trends, with consultant headcount increasing 1% year-over-year to 420, search confirmations up 5% to 1,467, and consultant productivity improving from $1.9 million to $2.0 million:

Balance Sheet Strength

Heidrick & Struggles maintains a strong financial position with significant cash and marketable securities and no debt. The company’s cash provided by operating activities increased to $68.6 million as of June 30, 2025, compared to $62.5 million a year earlier.

The following chart illustrates the company’s robust cash position and capital allocation priorities:

This strong balance sheet provides Heidrick & Struggles with the flexibility to invest in organic growth initiatives, pursue strategic acquisitions, and return capital to shareholders.

Forward-Looking Statements

Looking ahead, Heidrick & Struggles is targeting "through cycle" consolidated organic revenue growth of 4-6% and organic adjusted EBITDA growth of 5-8% per year. The company is focused on expanding its capabilities and expertise in areas with the greatest growth potential, creating solutions that enhance client performance, and leveraging technology and AI.

The company’s margin expansion opportunity is centered on enhancing its operating model and product positioning. With zero debt, strong free cash flow, and disciplined capital allocation, Heidrick & Struggles is well-positioned to execute its growth strategy while maintaining financial flexibility.

Based on the Q1 2025 earnings call, the company had projected Q2 2025 revenue between $285 million and $305 million. With actual revenue of $317.2 million, Heidrick & Struggles has exceeded the high end of its guidance, demonstrating strong execution and market demand for its services.

As CEO Tom Monahan noted in the Q1 earnings call, "Our business does have some attributes that allow us to weather these storms better than others," a statement that appears validated by the strong Q2 2025 performance across all business segments.

Full presentation:

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