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1. Company Snapshot

1.a. Company Description

Heidrick & Struggles International, Inc., together with its subsidiaries, provides executive search, consulting, and on-demand talent services to businesses and business leaders worldwide.The company enables its clients to build leadership teams by facilitating the recruitment, management, and development of senior executives.It also offers on-demand services to provide clients with independent talent, including professionals with industry and functional expertise for interim leadership roles and critical project-based initiatives; and consulting services, including leadership assessment and development, team and organization acceleration, digital acceleration and innovation, diversity and inclusion advisory services, and culture shaping services.


The company provides its services to Fortune 1000 companies; Major U.S. and non-U.S. companies; middle market and emerging growth companies; private equity firms; governmental, higher education, and not-for-profit organizations; and other private and public entities.Heidrick & Struggles International, Inc.was founded in 1953 and is headquartered in Chicago, Illinois.

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1.b. Last Insights on HSII

Heidrick & Struggles' recent performance was hindered by rising costs and profitability struggles in its consulting and On-Demand Talent segments. The company's 9.1% quarterly revenue increase and 54.2% rise in net income were overshadowed by escalating expenses, which may impact its short-term profitability. Additionally, the firm's focus on accelerating growth and transforming its business through promotions of 17 Partners may divert resources away from core operations, potentially affecting efficiency.

1.c. Company Highlights

2. Heidrick & Struggles' Q2 2025 Earnings: Strong Performance Across Segments

Heidrick & Struggles reported strong Q2 2025 earnings, exceeding the high end of their revenue range. The company's revenue came in at $317 million, with adjusted EBITDA of $34 million and adjusted diluted EPS of $0.85, surpassing estimates of $0.74. This robust performance was attributed to the company's diverse business mix and strong showings in Executive Search, On-Demand Talent, and Heidrick Consulting.

Publication Date: Aug -18

📋 Highlights
  • Revenue Exceeded Guidance: Q2 2025 revenue reached $317 million, surpassing the high end of the projected range.
  • Strong EBITDA Performance: Adjusted EBITDA totaled $34 million, with Q3 guidance set at $295–$315 million, factoring in seasonal volatility.
  • Executive Search Productivity: Annualized revenue per producer hit $2.3 million, exceeding the $2 million target, supporting hiring investments.
  • Strategic Hiring Focus: Second-half hiring aims to add talent for growth, with expenses impacting Q2 2026 margins but offset by scale and innovation.
  • Regional EBITDA Variance: Europe and Asia saw margin gains from scale and bonuses, while Americas declined due to higher-tier producer bonuses.

Financial Performance and Guidance

The company's CFO, Nirupam Sinha, provided a detailed review of their financial performance, including their outlook for Q3, expecting revenue to be between $295 million and $315 million. Sinha mentioned that the company still has earn-out payments to manage in Q1 2026 and that cash uses factor into the company's investments, including acquisitions and lift-outs.

Strategic Priorities and Trends

CEO Tom Monahan highlighted three key trends shaping their business and strategy: the chronic shortage of great leadership talent, changing geopolitics and global economic relationships, and the remaking of work through new technologies. Monahan emphasized that the company's strength lies in its ability to flex across industries, service lines, and geographies, which helps it navigate complex geopolitical environments. As Monahan stated, "We manage our business on an annual basis, so it won't be perfectly linear quarter-to-quarter."

Valuation Metrics

Heidrick & Struggles currently trades at a P/E Ratio of 29.35, P/B Ratio of 2.04, and P/S Ratio of 0.86, suggesting that the market is pricing in moderate growth expectations. The company's ROIC and ROE stand at 3.03% and 7.23%, respectively, indicating a relatively low return on investment. However, the company's net debt-to-EBITDA ratio of -1.11 suggests a healthy balance sheet.

3. NewsRoom

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Ensign Peak Advisors Inc Sells 2,000 Shares of Heidrick & Struggles International, Inc. $HSII

Dec -01

Source: defenseworld.net

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Geode Capital Management LLC Acquires 30,347 Shares of Heidrick & Struggles International, Inc. $HSII

Nov -29

Source: defenseworld.net

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FINAL NOTICE: Kaskela Law LLC Announces Investigation into Proposed $59.00 Per Share Buyout of Heidrick & Struggles (NASDAQ: HSII) Stockholders and Encourages Investors to Contact the Firm to Protect Their Investment

Nov -18

Source: globenewswire.com

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STOCKHOLDER NOTICE: Kaskela Law LLC Announces Investigation into Fairness of Proposed $59.00 Per Share Buyout of Heidrick & Struggles (NASDAQ: HSII) Stockholders and Encourages HSII Investors to Contact the Firm to Maximize Their Investment

Nov -12

Source: prnewswire.com

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2,212 Shares in Heidrick & Struggles International, Inc. $HSII Acquired by Atlantic Union Bankshares Corp

Nov -11

Source: defenseworld.net

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$HAREHOLDER ALERT: The M&A Class Action Firm Continues To Investigate Merger--AL, HNI, SCS, and ODP

Nov -05

Source: prnewswire.com

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Heidrick & Struggles Delivers 16% Revenue Growth in Q3, Driving Strong Profitability

Nov -03

Source: prnewswire.com

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Here Are 3 Staffing Stocks to Consider Despite Industry Woes

Oct -28

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.00%)

6. Segments

Executive Search - Americas

Expected Growth: 1.0%

Heidrick & Struggles' Executive Search - Americas segment growth is driven by increasing demand for leadership talent in the region, fueled by economic expansion, digital transformation, and the need for companies to adapt to changing market conditions. Additionally, the segment benefits from the company's strong brand reputation, extensive network, and expertise in identifying and placing top executive talent.

Executive Search - Europe

Expected Growth: 1.0%

Heidrick & Struggles' Executive Search - Europe segment growth is driven by increasing demand for leadership talent in a rapidly changing business environment, fueled by digital transformation, sustainability, and diversity initiatives. Strong brand reputation, extensive network, and expertise in C-suite placements contribute to the segment's 1.0% growth.

On-Demand Talent

Expected Growth: 1.0%

Heidrick & Struggles' On-Demand Talent growth is driven by increasing demand for flexible workforce solutions, accelerated digital transformation, and the need for companies to access specialized skills quickly. Additionally, the shift towards a gig economy, rising talent scarcity, and the desire for cost savings also contribute to this growth.

Heidrick Consulting

Expected Growth: 1.0%

Heidrick Consulting's 1.0 growth is driven by increasing demand for leadership advisory services, expansion into new markets, and strategic partnerships. The segment benefits from its strong brand reputation, diverse client base, and ability to adapt to changing market conditions. Additionally, investments in digital capabilities and talent acquisition have enhanced its service offerings, contributing to sustainable growth.

Executive Search - Asia Pacific

Expected Growth: 1.0%

Heidrick & Struggles' Executive Search - Asia Pacific segment growth is driven by increasing demand for leadership talent in the region, fueled by economic growth, urbanization, and digital transformation. Additionally, the segment benefits from the company's strong brand reputation, extensive network, and expertise in identifying and placing top executives in key industries.

Reimbursements

Expected Growth: 1.0%

Reimbursements from Heidrick & Struggles International, Inc. grew 1.0% driven by increased demand for executive search services, expansion into new markets, and higher average fees per search. Additionally, the company's strategic partnerships and diversified client base contributed to the growth.

7. Detailed Products

Executive Search

Heidrick & Struggles provides executive search services to help clients find and recruit top talent for senior-level positions.

Leadership Consulting

Heidrick & Struggles offers leadership consulting services to help clients develop and implement effective leadership strategies.

Culture Shaping

Heidrick & Struggles helps clients shape their organizational culture to drive business performance and achieve strategic objectives.

Talent Advisory

Heidrick & Struggles provides talent advisory services to help clients assess, develop, and retain top talent.

Board Advisory

Heidrick & Struggles offers board advisory services to help clients optimize their board composition and effectiveness.

CEO & Board Services

Heidrick & Struggles provides CEO and board services to help clients navigate complex leadership and governance issues.

8. Heidrick & Struggles International, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Heidrick & Struggles International, Inc. is medium due to the presence of other executive search firms and recruitment agencies that offer similar services.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Heidrick & Struggles International, Inc.'s services, which makes it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers of recruitment services, but Heidrick & Struggles International, Inc.'s reputation and scale of operations give it some bargaining power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the executive search industry, including the need for specialized knowledge and a strong network of contacts.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the executive search industry, leading to a competitive market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 17.74%
Debt Cost 3.95%
Equity Weight 82.26%
Equity Cost 8.31%
WACC 7.54%
Leverage 21.57%

11. Quality Control: Heidrick & Struggles International, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Barrett Business Services

A-Score: 6.0/10

Value: 5.9

Growth: 5.6

Quality: 6.0

Yield: 2.0

Momentum: 7.0

Volatility: 9.7

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Heidrick & Struggles

A-Score: 5.2/10

Value: 4.9

Growth: 4.1

Quality: 5.6

Yield: 3.0

Momentum: 8.0

Volatility: 5.7

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Kforce

A-Score: 5.1/10

Value: 7.0

Growth: 4.4

Quality: 6.5

Yield: 7.0

Momentum: 0.0

Volatility: 5.3

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Kelly Services

A-Score: 4.3/10

Value: 8.6

Growth: 2.0

Quality: 4.2

Yield: 4.0

Momentum: 1.0

Volatility: 6.0

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HireRight

A-Score: 4.1/10

Value: 6.4

Growth: 7.1

Quality: 3.4

Yield: 0.0

Momentum: 5.0

Volatility: 2.7

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BGSF

A-Score: 4.0/10

Value: 8.1

Growth: 3.3

Quality: 3.0

Yield: 8.0

Momentum: 0.5

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

58.97$

Current Price

58.97$

Potential

-0.00%

Expected Cash-Flows