Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 23, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 0-25837 | |
Entity Registrant Name | HEIDRICK & STRUGGLES INTERNATIONAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 36-2681268 | |
Entity Address, Address Line One | 233 South Wacker Drive | |
Entity Address, Address Line Two | Suite 4900 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60606-6303 | |
City Area Code | (312) | |
Local Phone Number | 496-1200 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | HSII | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 20,122,216 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001066605 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 286,429 | $ 355,447 |
Marketable securities | 47,560 | 266,169 |
Accounts receivable, net of allowances of $6,517 and $6,643, respectively | 189,442 | 126,437 |
Prepaid expenses | 28,333 | 24,098 |
Other current assets | 50,611 | 40,722 |
Income taxes recoverable | 10,799 | 10,946 |
Total current assets | 613,174 | 823,819 |
Non-current assets | ||
Property and equipment, net | 34,034 | 30,207 |
Operating lease right-of-use assets | 65,412 | 71,457 |
Assets designated for retirement and pension plans | 11,195 | 11,332 |
Investments | 43,154 | 34,354 |
Other non-current assets | 19,528 | 25,788 |
Goodwill | 198,241 | 138,361 |
Other intangible assets, net | 22,509 | 6,333 |
Deferred income taxes | 33,999 | 33,987 |
Total non-current assets | 428,072 | 351,819 |
Total assets | 1,041,246 | 1,175,638 |
Current liabilities | ||
Accounts payable | 18,966 | 14,613 |
Accrued salaries and benefits | 264,625 | 451,161 |
Deferred revenue | 41,502 | 43,057 |
Operating lease liabilities | 20,994 | 19,554 |
Other current liabilities | 33,171 | 56,016 |
Income taxes payable | 12,709 | 4,076 |
Total current liabilities | 391,967 | 588,477 |
Non-current liabilities | ||
Accrued salaries and benefits | 48,598 | 59,467 |
Retirement and pension plans | 57,351 | 48,456 |
Operating lease liabilities | 55,832 | 63,299 |
Other non-current liabilities | 40,985 | 5,293 |
Deferred income taxes | 7,365 | 0 |
Total non-current liabilities | 210,131 | 176,515 |
Total liabilities | 602,098 | 764,992 |
Commitments and contingencies (Note 18) | ||
Stockholders’ equity | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued at September 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.01 par value, 100,000,000 shares authorized, 20,127,296 and 19,866,287 shares issued, 20,122,216 and 19,861,207 shares outstanding at September 30, 2023 and December 31, 2022, respectively | 201 | 199 |
Treasury stock at cost, 5,080 and 5,080 shares at September 30, 2023 and December 31, 2022, respectively | (110) | (191) |
Additional paid in capital | 248,510 | 246,630 |
Retained earnings | 198,369 | 168,197 |
Accumulated other comprehensive loss | (7,822) | (4,189) |
Total stockholders’ equity | 439,148 | 410,646 |
Total liabilities and stockholders’ equity | $ 1,041,246 | $ 1,175,638 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for credit loss, current | $ 6,517 | $ 6,643 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, issued (in shares) | 20,127,296 | 19,866,287 |
Common stock, outstanding (in shares) | 20,122,216 | 19,861,207 |
Treasury stock (in shares) | 5,080 | 5,080 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue | ||||
Revenue before reimbursements (net revenue) | $ 263,160 | $ 255,185 | $ 773,702 | $ 837,747 |
Reimbursements | 4,736 | 3,086 | 10,090 | 7,170 |
Total revenue | 267,896 | 258,271 | 783,792 | 844,917 |
Operating expenses | ||||
Salaries and benefits | 167,219 | 171,473 | 504,994 | 580,602 |
General and administrative expenses | 37,564 | 32,189 | 112,405 | 97,186 |
Cost of services | 30,680 | 17,801 | 78,818 | 53,192 |
Research and development | 5,560 | 5,400 | 16,746 | 14,347 |
Impairment charges | 0 | 0 | 7,246 | 0 |
Reimbursed expenses | 4,736 | 3,086 | 10,090 | 7,170 |
Total operating expenses | 245,759 | 229,949 | 730,299 | 752,497 |
Operating income | 22,137 | 28,322 | 53,493 | 92,420 |
Non-operating income (expense) | ||||
Interest, net | 2,505 | 1,255 | 7,667 | 1,664 |
Other, net | (649) | (43) | 2,537 | (1,740) |
Net non-operating income (expense) | 1,856 | 1,212 | 10,204 | (76) |
Income before income taxes | 23,993 | 29,534 | 63,697 | 92,344 |
Provision for income taxes | 9,006 | 8,708 | 24,142 | 28,902 |
Net income | 14,987 | 20,826 | 39,555 | 63,442 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustment | (4,015) | (5,462) | (3,701) | (14,068) |
Net unrealized gain on available-for-sale investments | 14 | 8 | 68 | 8 |
Other comprehensive loss, net of tax | (4,001) | (5,454) | (3,633) | (14,060) |
Comprehensive income | $ 10,986 | $ 15,372 | $ 35,922 | $ 49,382 |
Weighted-average common shares outstanding | ||||
Basic (in shares) | 20,076,000 | 19,816,000 | 19,998,000 | 19,723,000 |
Diluted (in shares) | 20,553,000 | 20,413,000 | 20,716,000 | 20,558,000 |
Earnings per common share | ||||
Basic (in dollars per share) | $ 0.75 | $ 1.05 | $ 1.98 | $ 3.22 |
Diluted (in dollars per share) | 0.73 | 1.02 | 1.91 | 3.09 |
Cash dividends paid per share (in dollars per share) | $ 0.15 | $ 0.15 | $ 0.45 | $ 0.45 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2021 | 19,597,000 | |||||
Beginning balance at Dec. 31, 2021 | $ 336,020 | $ 196 | $ (191) | $ 233,163 | $ 101,177 | $ 1,675 |
Treasury stock, beginning balance (in shares) at Dec. 31, 2021 | 5,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 18,467 | 18,467 | ||||
Other comprehensive income (loss), net of tax | (1,082) | (1,082) | ||||
Common and treasury stock transactions: | ||||||
Stock-based compensation | 3,698 | 3,698 | ||||
Vesting of equity awards, net of tax withholding (in shares) | 126,000 | |||||
Vesting of equity awards, net of tax withholding | (3,219) | $ 1 | (3,220) | |||
Cash dividends declared ($0.15 per share) | (2,940) | (2,940) | ||||
Dividend equivalents on restricted stock units | (179) | (179) | ||||
Ending balance (in shares) at Mar. 31, 2022 | 19,723,000 | |||||
Ending balance at Mar. 31, 2022 | 350,765 | $ 197 | $ (191) | 233,641 | 116,525 | 593 |
Treasury stock, ending balance (in shares) at Mar. 31, 2022 | 5,000 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 19,597,000 | |||||
Beginning balance at Dec. 31, 2021 | 336,020 | $ 196 | $ (191) | 233,163 | 101,177 | 1,675 |
Treasury stock, beginning balance (in shares) at Dec. 31, 2021 | 5,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 63,442 | |||||
Other comprehensive income (loss), net of tax | (14,060) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 19,866,000 | |||||
Ending balance at Sep. 30, 2022 | 384,531 | $ 199 | $ (191) | 241,632 | 155,276 | (12,385) |
Treasury stock, ending balance (in shares) at Sep. 30, 2022 | 5,000 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 19,597,000 | |||||
Beginning balance at Dec. 31, 2021 | $ 336,020 | $ 196 | $ (191) | 233,163 | 101,177 | 1,675 |
Treasury stock, beginning balance (in shares) at Dec. 31, 2021 | 5,000 | |||||
Common and treasury stock transactions: | ||||||
Repurchase of common stock (in shares) | 0 | |||||
Ending balance (in shares) at Dec. 31, 2022 | 19,861,207 | 19,866,000 | ||||
Ending balance at Dec. 31, 2022 | $ 410,646 | $ 199 | $ (191) | 246,630 | 168,197 | (4,189) |
Treasury stock, ending balance (in shares) at Dec. 31, 2022 | 5,080 | 5,000 | ||||
Beginning balance (in shares) at Mar. 31, 2022 | 19,723,000 | |||||
Beginning balance at Mar. 31, 2022 | $ 350,765 | $ 197 | $ (191) | 233,641 | 116,525 | 593 |
Treasury stock, beginning balance (in shares) at Mar. 31, 2022 | 5,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 24,149 | 24,149 | ||||
Other comprehensive income (loss), net of tax | (7,524) | (7,524) | ||||
Common and treasury stock transactions: | ||||||
Stock-based compensation | 3,784 | 3,784 | ||||
Vesting of equity awards, net of tax withholding (in shares) | 19,000 | |||||
Vesting of equity awards, net of tax withholding | 404 | 404 | ||||
Cash dividends declared ($0.15 per share) | (2,957) | (2,957) | ||||
Dividend equivalents on restricted stock units | (147) | (147) | ||||
Ending balance (in shares) at Jun. 30, 2022 | 19,742,000 | |||||
Ending balance at Jun. 30, 2022 | 368,474 | $ 197 | $ (191) | 237,829 | 137,570 | (6,931) |
Treasury stock, ending balance (in shares) at Jun. 30, 2022 | 5,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 20,826 | 20,826 | ||||
Other comprehensive income (loss), net of tax | (5,454) | (5,454) | ||||
Common and treasury stock transactions: | ||||||
Stock-based compensation | 3,805 | 3,805 | ||||
Vesting of equity awards, net of tax withholding (in shares) | 124,000 | |||||
Vesting of equity awards, net of tax withholding | 0 | $ 2 | (2) | |||
Cash dividends declared ($0.15 per share) | (2,980) | (2,980) | ||||
Dividend equivalents on restricted stock units | (140) | (140) | ||||
Ending balance (in shares) at Sep. 30, 2022 | 19,866,000 | |||||
Ending balance at Sep. 30, 2022 | $ 384,531 | $ 199 | $ (191) | 241,632 | 155,276 | (12,385) |
Treasury stock, ending balance (in shares) at Sep. 30, 2022 | 5,000 | |||||
Beginning balance (in shares) at Dec. 31, 2022 | 19,861,207 | 19,866,000 | ||||
Beginning balance at Dec. 31, 2022 | $ 410,646 | $ 199 | $ (191) | 246,630 | 168,197 | (4,189) |
Treasury stock, beginning balance (in shares) at Dec. 31, 2022 | 5,080 | 5,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 15,586 | 15,586 | ||||
Other comprehensive income (loss), net of tax | 443 | 443 | ||||
Common and treasury stock transactions: | ||||||
Stock-based compensation | 1,853 | 1,853 | ||||
Vesting of equity awards, net of tax withholding (in shares) | 172,000 | |||||
Vesting of equity awards, net of tax withholding | (4,141) | $ 1 | (4,142) | |||
Clawback of equity awards (in shares) | 5,000 | |||||
Clawback of equity awards | (163) | $ (163) | ||||
Cash dividends declared ($0.15 per share) | (3,006) | (3,006) | ||||
Dividend equivalents on restricted stock units | (106) | (106) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 20,038,000 | |||||
Ending balance at Mar. 31, 2023 | $ 421,112 | $ 200 | $ (354) | 244,341 | 180,671 | (3,746) |
Treasury stock, ending balance (in shares) at Mar. 31, 2023 | 10,000 | |||||
Beginning balance (in shares) at Dec. 31, 2022 | 19,861,207 | 19,866,000 | ||||
Beginning balance at Dec. 31, 2022 | $ 410,646 | $ 199 | $ (191) | 246,630 | 168,197 | (4,189) |
Treasury stock, beginning balance (in shares) at Dec. 31, 2022 | 5,080 | 5,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 39,555 | |||||
Other comprehensive income (loss), net of tax | $ (3,633) | |||||
Ending balance (in shares) at Sep. 30, 2023 | 20,122,216 | 20,127,000 | ||||
Ending balance at Sep. 30, 2023 | $ 439,148 | $ 201 | $ (110) | 248,510 | 198,369 | (7,822) |
Treasury stock, ending balance (in shares) at Sep. 30, 2023 | 5,080 | 5,000 | ||||
Beginning balance (in shares) at Mar. 31, 2023 | 20,038,000 | |||||
Beginning balance at Mar. 31, 2023 | $ 421,112 | $ 200 | $ (354) | 244,341 | 180,671 | (3,746) |
Treasury stock, beginning balance (in shares) at Mar. 31, 2023 | 10,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 8,982 | 8,982 | ||||
Other comprehensive income (loss), net of tax | (75) | (75) | ||||
Common and treasury stock transactions: | ||||||
Stock-based compensation | $ 2,324 | 2,324 | ||||
Repurchase of common stock (in shares) | 36,000 | 36,000 | ||||
Repurchase of common stock | $ (904) | $ (904) | ||||
Re-Issuance of treasury stock (in shares) | (16,000) | |||||
Re-issuance of treasury stock | 0 | $ 439 | (439) | |||
Cash dividends declared ($0.15 per share) | (3,003) | (3,003) | ||||
Dividend equivalents on restricted stock units | (119) | (119) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 20,038,000 | |||||
Ending balance at Jun. 30, 2023 | 428,317 | $ 200 | $ (819) | 246,226 | 186,531 | (3,821) |
Treasury stock, ending balance (in shares) at Jun. 30, 2023 | 30,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 14,987 | 14,987 | ||||
Other comprehensive income (loss), net of tax | (4,001) | (4,001) | ||||
Common and treasury stock transactions: | ||||||
Stock-based compensation | 3,154 | 3,154 | ||||
Vesting of equity awards, net of tax withholding (in shares) | 89,000 | |||||
Vesting of equity awards, net of tax withholding | $ 0 | $ 1 | (1) | |||
Repurchase of common stock (in shares) | 0 | |||||
Clawback of equity awards (in shares) | 5,000 | |||||
Clawback of equity awards | $ (144) | $ (144) | ||||
Re-Issuance of treasury stock (in shares) | (30,000) | |||||
Re-issuance of treasury stock | (16) | $ 853 | (869) | |||
Cash dividends declared ($0.15 per share) | (3,014) | (3,014) | ||||
Dividend equivalents on restricted stock units | $ (135) | (135) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 20,122,216 | 20,127,000 | ||||
Ending balance at Sep. 30, 2023 | $ 439,148 | $ 201 | $ (110) | $ 248,510 | $ 198,369 | $ (7,822) |
Treasury stock, ending balance (in shares) at Sep. 30, 2023 | 5,080 | 5,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Cash dividends declared (in dollars per share) | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.15 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows - operating activities | ||
Net income | $ 39,555 | $ 63,442 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 13,432 | 7,824 |
Deferred income taxes | (548) | (976) |
Stock-based compensation expense | 7,331 | 11,691 |
Accretion expense related to earnout payments | 1,097 | 820 |
Gain on marketable securities | (2,040) | (113) |
Loss on disposal of property and equipment | 192 | 376 |
Impairment charges | 7,246 | 0 |
Changes in assets and liabilities: | ||
Accounts receivable | (52,205) | (64,753) |
Accounts payable | (1,657) | (3,250) |
Accrued expenses | (197,698) | (32,414) |
Deferred revenue | (1,622) | (5,913) |
Income taxes recoverable and payable, net | 6,617 | (5,661) |
Retirement and pension plan assets and liabilities | 6,697 | 3,476 |
Prepaid expenses | (3,771) | (6,637) |
Other assets and liabilities, net | (3,243) | (8,960) |
Net cash used in operating activities | (180,617) | (41,048) |
Cash flows - investing activities | ||
Acquisition of businesses, net of cash acquired | (37,953) | 0 |
Capital expenditures | (9,619) | (8,176) |
Purchases of marketable securities and investments | (75,464) | (186,097) |
Proceeds from sales of marketable securities and investments | 289,689 | 1,216 |
Net cash provided by (used in) investing activities | 166,653 | (193,057) |
Cash flows - financing activities | ||
Repurchases of common stock | (904) | 0 |
Cash dividends paid | (9,383) | (9,343) |
Payment of employee tax withholdings on equity transactions | (4,141) | (3,219) |
Acquisition earnout payments | (37,984) | 0 |
Net cash used in financing activities | (52,412) | (12,562) |
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash | (2,642) | (23,082) |
Net decrease in cash, cash equivalents and restricted cash | (69,018) | (269,749) |
Cash, cash equivalents and restricted cash at beginning of period | 355,489 | 545,259 |
Cash, cash equivalents and restricted cash at end of period | $ 286,471 | $ 275,510 |
Basis of Presentation of Interi
Basis of Presentation of Interim Financial Information | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation of Interim Financial Information | Basis of Presentation of Interim Financial Information The accompanying unaudited Condensed Consolidated Financial Statements of Heidrick & Struggles International, Inc. and subsidiaries (the "Company") have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Significant items subject to estimates and assumptions include revenue recognition, income taxes, interim effective tax rate and the assessment of goodwill, other intangible assets and long-lived assets for impairment. Estimates are subject to a degree of uncertainty and actual results could differ from these estimates. In the opinion of management, all adjustments necessary to fairly present the financial position of the Company at September 30, 2023 and December 31, 2022, the results of operations for the three and nine months ended September 30, 2023 and 2022 and its cash flows for the nine months ended September 30, 2023 and 2022 have been included and are of a normal, recurring nature except as otherwise disclosed. These financial statements and notes are to be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 27, 2023. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies A complete listing of the Company’s significant accounting policies is discussed in Note 2, Summary of Significant Accounting Policies , in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Revenue Recognition See Note 3 , Revenue. Cost of Services Cost of services consists of third-party contractor costs related to the delivery of various services in the Company's On-Demand Talent and Heidrick Consulting operating segments. Research and Development Research and development (“R&D”) expense consists of payroll, employee benefits, stock-based compensation, other employee expenses and third-party professional fees associated with the development of new technologies to enhance existing products and services and to expand the range of the Company's offerings. The benefits from the Company's R&D efforts are intended to be utilized to develop and enhance new and existing services and products across the Company's current offerings in Executive Search, Heidrick Consulting and On-Demand Talent, and for products and services in new segments that the Company may embark upon in the future from time to time. Marketable Securities The Company’s marketable securities consist of available-for-sale debt securities with original maturities exceeding three months. Restricted Cash The following table provides a reconciliation of the cash and cash equivalents between the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Cash Flows as of September 30, 2023, and 2022, and December 31, 2022, and 2021: September 30, December 31, 2023 2022 2022 2021 Cash and cash equivalents $ 286,429 $ 275,468 $ 355,447 $ 545,225 Restricted cash included within other non-current assets 42 42 42 34 Total cash, cash equivalents and restricted cash $ 286,471 $ 275,510 $ 355,489 $ 545,259 Earnings per Common Share Basic earnings per common share are computed by dividing net income by weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Common equivalent shares are excluded from the determination of diluted earnings per share in periods in which they have an anti-dilutive effect. The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net income $ 14,987 $ 20,826 $ 39,555 $ 63,442 Weighted average shares outstanding: Basic 20,076 19,816 19,998 19,723 Effect of dilutive securities: Restricted stock units 381 462 575 646 Performance stock units 96 135 143 189 Diluted 20,553 20,413 20,716 20,558 Basic earnings per share $ 0.75 $ 1.05 $ 1.98 $ 3.22 Diluted earnings per share $ 0.73 $ 1.02 $ 1.91 $ 3.09 Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets , Current liabilities - Operating lease liabilities and Non-current liabilities - Operating lease liabilities in the Company's Condensed Consolidated Balance Sheets. The Company does not have any leases that meet the finance lease criteria. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, an incremental borrowing rate based on the information available at the commencement date is used in determining the present value of lease payments. The operating lease right-of-use asset also includes any lease payments made in advance and any accrued rent expense balances. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components. For office leases, the Company accounts for the lease and non-lease components as a single lease component. For equipment leases, such as vehicles and office equipment, the Company accounts for the lease and non-lease components separately. Goodwill Goodwill represents the difference between the purchase price of acquired companies and the related fair value of the net assets acquired, which is accounted for by the acquisition method of accounting. The Company performs assessments of the carrying value of goodwill at least annually and whenever events occur or circumstances indicate that a carrying value of goodwill may not be recoverable. These circumstances include a significant change in business climate, attrition of key personnel, changes in financial condition or results of operations, prolonged decline in the Company’s stock price or market capitalization, increased competition, and other factors. The goodwill impairment test compares the fair value of a reporting unit to its carrying value, including goodwill. The Company operates five reporting units: Americas, Europe (which includes Africa), Asia Pacific (which includes the Middle East), On-Demand Talent and Heidrick Consulting. The fair value of each of the Company’s reporting units is determined using a discounted cash flow methodology. An impairment charge is recognized for the value by which the carrying value of the reporting unit exceeds its fair value; however, the loss recognized is not to exceed the total value of goodwill allocated to that reporting unit. On October 31, 2022, the Company conducted its annual goodwill impairment evaluation, which indicated that the carrying value of the Heidrick Consulting reporting unit was less than its fair value. During the three months ended June 30, 2023, the Company acquired businessfourzero and recorded approximately $7.1 million of goodwill in the Heidrick Consulting reporting unit. Due to the inclusion of goodwill in a reporting unit with a pre-existing fair value shortfall, the Company evaluated the recent and anticipated future financial performance of the Heidrick Consulting reporting unit and determined that it was more likely than not that the fair value of the reporting unit was less than its carrying value. As a result, the Company identified a triggering event and performed an interim goodwill impairment evaluation during the three months ended June 30, 2023. During the impairment evaluation process, the Company used a discounted cash flow methodology to estimate the fair value of each of its reporting units. The discounted cash flow approach is dependent on a number of factors, including estimates of future market growth and trends, forecasted revenue and costs, capital investments, appropriate discount rates, certain assumptions to allocate shared costs, assets and liabilities, historical and projected performance of the reporting unit, and the macroeconomic conditions affecting each of the Company’s reporting units. The assumptions used in the determination of fair value were (1) a forecast of growth in the near and long term; (2) the discount rate; (3) working capital investments; (4) macroeconomic conditions; and (5) other factors. Based on the results of the impairment evaluation, the Company determined that the goodwill within the Heidrick Consulting reporting unit was impaired, which resulted in an impairment charge of $7.2 million to write-off all of the associated goodwill. The impairment charge is recorded within Impairment charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2023, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023. The impairment was non-cash in nature and did not affect the Company's current liquidity, cash flows, borrowing capability or operations; nor did it impact the debt covenants under the Company's credit agreement. Recently Issued Financial Accounting Standards In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance was intended to provide temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This guidance is effective March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2024. The Company is currently evaluating the impact of this accounting guidance. The new guidance is not expected to have a material effect on the Company's financial statements. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Executive Search Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Generally, each executive search contract contains one performance obligation which is the process of identifying potentially qualified candidates for a specific client position. In most contracts, the transaction price includes both fixed and variable consideration. Fixed compensation is comprised of a retainer, equal to approximately one-third of the estimated first year compensation for the position to be filled, and indirect expenses, equal to a specified percentage of the retainer, as defined in the contract. The Company generally bills clients for the retainer and indirect expenses in one-third increments over a three-month period commencing in the month of a client’s acceptance of the contract. If actual compensation of a placed candidate exceeds the original compensation estimate, the Company is often authorized to bill the client for one-third of the excess compensation. The Company refers to this additional billing as uptick revenue. In most contracts, variable consideration is comprised of uptick revenue and direct expenses. The Company bills its clients for uptick revenue upon completion of the executive search, and direct expenses are billed as incurred. The Company estimates uptick revenue at contract inception, based on a portfolio approach, utilizing the expected value method based on a historical analysis of uptick revenue realized in the Company’s geographic regions and industry practices, and initially records a contract’s uptick revenue in an amount that is probable not to result in a significant reversal of cumulative revenue recognized when the actual amount of uptick revenue for the contract is known. Differences between the estimated and actual amounts of variable consideration are recorded when known. The Company does not estimate revenue for direct expenses as it is not materially different than recognizing revenue as direct expenses are incurred. Revenue from executive search engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance. Revenue from executive search engagements is recognized over the expected average period of performance, in proportion to the estimated personnel time incurred to fulfill the obligations under the executive search contract. Revenue is generally recognized over a period of approximately six months. The Company's executive search contracts contain a replacement guarantee which provides for an additional search to be completed, free of charge except for expense reimbursements, should the candidate presented by the Company be hired by the client and subsequently terminated by the client for performance reasons within a specified period of time. The replacement guarantee is an assurance warranty, which is not a performance obligation under the terms of the executive search contract, as the Company does not provide any services under the terms of the guarantee that transfer benefits to the client in excess of assuring that the identified candidate complies with the agreed-upon specifications. The Company accounts for the replacement guarantee under the relevant warranty guidance in Accounting Standards Codification 460 - Guarantees. On-Demand Talent The Company enters into contracts with clients that outline the general terms and conditions of the assignment to provide on-demand consultants for various types of consulting projects, which consultants may be independent contractors or temporary employees. The consideration the Company expects to receive under each contract is dependent on the time-based fees specified in the contract. Revenue from on-demand engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance. The Company has applied the practical expedient to recognize revenue for these services in the amount to which the Company has a right to invoice the client, as this amount corresponds directly with the value provided to the client for the performance completed to date. For transactions where a third-party contractor is involved in providing the services to the client, the Company reports the revenue and the related direct costs on a gross basis as it has determined that it is the principal in the transaction. The Company is primarily responsible for fulfilling the promise to provide consulting services to its clients and the Company has discretion in establishing the prices charged to clients for the consulting services and is able to contractually obligate the independent service provider to deliver services and deliverables that the Company has agreed to provide to its clients. Heidrick Consulting Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Heidrick Consulting enters into contracts with clients that outline the general terms and conditions of the assignment to provide succession planning, executive assessment, top team and board effectiveness and culture shaping programs. The consideration the Company expects to receive under each contract is generally fixed. Most of the Company's consulting contracts contain one performance obligation, which is the overall process of providing the consulting service requested by the client. The majority of the Company's consulting revenue is recognized over time utilizing both input and output methods. Contracts that contain coaching sessions, training sessions or the completion of assessments are recognized using the output method as each session or assessment is delivered to the client. Contracts that contain general consulting work are recognized using the input method utilizing a measure of progress that is based on time incurred on the project. The Company enters into enterprise agreements with clients to provide a license for online access, via the Company's Culture Connect platform, to training and other proprietary material related to the Company's culture shaping programs. The consideration the Company expects to receive under the terms of an enterprise agreement is comprised of a single fixed fee. The enterprise agreements contain multiple performance obligations, the delivery of materials via Culture Connect and material rights related to options to renew enterprise agreements at a significant discount. The Company allocates the transaction price to the performance obligations in the contract on a stand-alone selling price basis. The stand-alone selling price for the initial term of the enterprise agreement is outlined in the contract and is equal to the price paid by the client for the agreement over the initial term of the contract. The stand-alone selling price for the options to renew, or material right, are not directly observable and must be estimated. This estimate is required to reflect the discount the client would obtain when exercising the option to renew, adjusted for the likelihood that the option will be exercised. The Company estimates the likelihood of renewal using a historical analysis of client renewals. Access to Culture Connect represents a right to access the Company’s intellectual property that the client simultaneously receives and consumes as the Company performs under the agreement, and therefore the Company recognizes revenue over time. Given the continuous nature of this commitment, the Company utilizes straight-line ratable revenue recognition over the estimated subscription period as the Company's clients will receive and consume the benefits from Culture Connect equally throughout the contract period. Revenue related to client renewals of enterprise agreements is recognized over the term of the renewal, which is generally twelve months. Enterprise agreements do not comprise a significant portion of the Company's revenue. Contract Balances Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets and liabilities are classified as current due to the nature of the Company's contracts, which are completed within one year. Contract assets are included within Current assets - Other current assets on the Condensed Consolidated Balance Sheets. Unbilled receivables: Unbilled receivables represents contract assets from revenue recognized over time in excess of the amount billed to the client and the amount billed to the client is solely dependent upon the passage of time. This amount includes revenue recognized in excess of billed Executive Search retainers, Heidrick Consulting fees, and On-Demand Talent fees. Contract assets: Contract assets represent revenue recognized over time in excess of the amount billed to the client, and the amount billed to the client is not solely subject to the passage of time. This amount primarily includes revenue recognized for upticks and contingent placement fees in executive search contracts. Deferred revenue: Contract liabilities consist of deferred revenue, which is equal to billings in excess of revenue recognized. The following table outlines the changes in the contract asset and liability balances from December 31, 2022, to September 30, 2023: September 30, December 31, Change Contract assets Unbilled receivables, net $ 17,322 $ 13,940 $ 3,382 Contract assets 18,808 21,348 (2,540) Total contract assets 36,130 35,288 842 Contract liabilities Deferred revenue $ 41,502 $ 43,057 $ (1,555) During the nine months ended September 30, 2023, the Company recognized revenue of $37.5 million that was included in the contract liabilities balance at the beginning of the period. The amount of revenue recognized during the nine months ended September 30, 2023, from performance obligations partially satisfied in previous periods as a result of changes in the estimates of variable consideration was $19.3 million. Each of the Company's contracts has an expected duration of one year or less. |
Credit Losses
Credit Losses | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
Credit Losses | Credit Losses The Company is exposed to credit losses primarily through the provision of its executive search, consulting, and on-demand talent services. The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of clients' trade accounts receivables. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is primarily based on historical loss-rate experience. When required, the Company adjusts the loss-rate methodology to account for current conditions and reasonable and supportable expectations of future economic and market conditions. The Company generally assesses future economic conditions for a period of sixty to ninety days, which corresponds with the contractual life of its accounts receivables. Additionally, specific allowance amounts are established to record the appropriate provision for clients that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of clients' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. The activity in the allowance for credit losses on the Company's trade receivables is as follows: Balance at December 31, 2022 $ 6,643 Provision for credit losses 5,390 Write-offs (5,460) Foreign currency translation (56) Balance at September 30, 2023 $ 6,517 There were no investments with unrealized losses at September 30, 2023. At December 31, 2022, the fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position, were as follows: Less Than 12 Months Balance Sheet Classification Balance at December 31, 2022 Fair Value Unrealized Loss Cash and Cash Equivalents Marketable Securities U.S. Treasury securities $ 194,056 $ 56 $ 11,918 $ 182,138 |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net The components of the Company’s property and equipment are as follows: September 30, December 31, Leasehold improvements $ 42,328 $ 40,829 Office furniture, fixtures and equipment 14,546 14,322 Computer equipment and software 36,743 30,085 Property and equipment, gross 93,617 85,236 Accumulated depreciation (59,583) (55,029) Property and equipment, net $ 34,034 $ 30,207 Depreciation expense for the three months ended September 30, 2023, and 2022 was $2.4 million and $1.8 million, respectively. Depreciation expense for the nine months ended September 30, 2023, and 2022 was $6.6 million and $5.4 million, respectively. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company's lease portfolio is comprised of operating leases for office space and equipment. The majority of the Company's leases include both lease and non-lease components, which the Company accounts for differently depending on the underlying class of asset. Certain of the Company's leases include one or more options to renew or terminate the lease at the Company's discretion. Generally, the renewal and termination options are not included in the right-of-use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal and termination options and, when they are reasonably certain of exercise, includes the renewal or termination option in the lease term. As most of the Company's leases do not provide an implicit interest rate, the Company utilizes an incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of lease payments. The Company has a centrally managed treasury function and, therefore, a portfolio approach is applied in determining the incremental borrowing rate. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a fully collateralized basis over a similar term in an amount equal to the total lease payments in a similar economic environment. As of September 30, 2023, office leases have remaining lease terms that range from less than one year to 10.0 years, some of which also include options to extend or terminate the lease. Most office leases contain both fixed and variable lease payments. Variable lease costs consist primarily of rent escalations based on an established index or rate and taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor. The Company has elected to utilize the available practical expedient to not separate lease and non-lease components for office leases. As of September 30, 2023, equipment leases, which are comprised of vehicle and office equipment leases, have remaining terms that range from less than one year to 4.8 years, some of which also include options to extend or terminate the lease. The Company's equipment leases do not contain variable lease payments. The Company separates the lease and non-lease components for its equipment leases. Equipment leases do not comprise a significant portion of the Company's lease portfolio. Lease cost components included within Operating expenses - General and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income were as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Operating lease cost $ 4,751 $ 4,124 $ 13,843 $ 12,967 Variable lease cost 2,213 $ 1,760 7,200 4,393 Total lease cost $ 6,964 $ 5,884 $ 21,043 $ 17,360 Supplemental cash flow information related to the Company's operating leases is as follows for the nine months ended September 30: 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 14,923 $ 13,572 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 7,944 $ 9,059 The weighted average remaining lease term and weighted average discount rate for operating leases as of September 30, are as follows: 2023 2022 Weighted Average Remaining Lease Term Operating leases 6.2 years 6.5 years Weighted Average Discount Rate Operating leases 3.77 % 3.31 % The future maturities of the Company's operating lease liabilities as of September 30, 2023, for the years ended December 31 are as follows: Operating Lease Maturity 2023 $ 4,304 2024 20,749 2025 12,482 2026 11,161 2027 9,808 Thereafter 27,610 Total lease payments 86,114 Less: Interest 9,288 Present value of lease liabilities $ 76,826 |
Financial Instruments and Fair
Financial Instruments and Fair Value | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value | Financial Instruments and Fair Value Cash, Cash Equivalents and Marketable Securities The Company's investments in marketable debt securities, which consist of U.S. Treasury bills, are classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument's underlying contractual maturity date. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recognized in Accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets until realized. The Company's cash, cash equivalents, and marketable securities by significant investment category are as follows: Amortized Cost Unrealized Gains Fair Value Cash and Cash Equivalents Marketable Securities Balance at September 30, 2023 Cash $ 171,155 $ — Level 1 (1) : Money market funds 14,585 — U.S. Treasury securities $ 148,221 $ 28 $ 148,249 100,689 47,560 Total Level 1 148,221 28 148,249 115,274 47,560 Total $ 148,221 $ 28 $ 148,249 $ 286,429 $ 47,560 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities Balance at December 31, 2022 Cash $ 247,198 $ — Level 1 (1) : Money market funds 62,338 — U.S. Treasury securities $ 312,121 $ 15 $ (56) $ 312,080 45,911 266,169 Total Level 1 312,121 15 (56) 312,080 108,249 266,169 Total $ 312,121 $ 15 $ (56) $ 312,080 $ 355,447 $ 266,169 (1) Level 1 – Quoted prices in active markets for identical assets and liabilities. Investments, Assets Designated for Retirement and Pension Plans and Associated Liabilities The Company has a U.S. non-qualified deferred compensation plan that consists primarily of U.S. marketable securities and mutual funds. The aggregate cost basis for these investments was $35.9 million and $29.1 million as of September 30, 2023, and December 31, 2022, respectively. The Company also maintains a pension plan for certain current and former employees in Germany. The pensions are individually fixed Euro amounts that vary depending on the function and the eligible years of service of the employee. The Company’s investment strategy is to support its pension obligations through reinsurance contracts. The BaFin—German Federal Financial Supervisory Authority—supervises the insurance companies and the reinsurance contracts. The BaFin requires each reinsurance contract to guarantee a fixed minimum return. The Company’s pension benefits are fully reinsured by group insurance contracts with ERGO Lebensversicherung AG, and the group insurance contracts are measured in accordance with BaFin guidelines (including mortality tables and discount rates) which are considered Level 2 inputs. The following tables provide a summary of the fair value measurements for each major category of investments, assets designated for retirement and pension plans and associated liabilities measured at fair value: Balance Sheet Classification Current Assets Non-Current Assets Current Liabilities Non-current Liabilities Fair Value Other Current Assets Assets Designated for Retirement and Pension Plans Investments Other Current Liabilities Retirement and Pension Plans Balance at September 30, 2023 Measured on a recurring basis: Level 1 (1) : U.S. non-qualified deferred compensation plan $ 43,154 $ — $ — $ 43,154 $ — $ — Level 2 (2) : Retirement and pension plan assets 12,432 1,237 11,195 — — — Pension benefit obligation (13,783) — — — (1,237) (12,546) Total Level 2 (1,351) 1,237 11,195 — (1,237) (12,546) Total $ 41,803 $ 1,237 $ 11,195 $ 43,154 $ (1,237) $ (12,546) Balance Sheet Classification Current Assets Non-Current Assets Current Liabilities Non-Current Liabilities Fair Value Other Current Assets Assets Designated for Retirement and Pension Plans Investments Other Current Liabilities Retirement and Pension Plans Balance at December 31, 2022 Measured on a recurring basis: Level 1 (1) : U.S. non-qualified deferred compensation plan $ 34,354 $ — $ — $ 34,354 $ — $ — Level 2 (2) : Retirement and pension plan assets 12,584 1,252 11,332 — — — Pension benefit obligation (13,951) — — — (1,252) (12,699) Total Level 2 (1,367) 1,252 11,332 — (1,252) (12,699) Total $ 32,987 $ 1,252 $ 11,332 $ 34,354 $ (1,252) $ (12,699) (1) Level 1 – Quoted prices in active markets for identical assets and liabilities. (2) Level 2 – Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. (3) Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Contingent Consideration and Compensation The former owners of the Company's acquired businesses are eligible to receive contingent consideration or additional cash compensation based on the attainment of certain operating metrics or performance criteria in the periods subsequent to acquisition. Contingent consideration and compensation are valued using significant inputs that are not observable in the market, which are defined as Level 3 inputs pursuant to fair value measurement accounting. The Company determines the fair value of contingent consideration and compensation using discounted cash flow models. The following table provides a reconciliation of the beginning and ending balance of Level 3 liabilities for the nine months ended September 30, 2023: Earnout Contingent Compensation Balance at December 31, 2022 $ (36,010) $ (8,192) Purchase accounting (See Note 8, Acquisitions ) (36,266) — Earnout accretion (1,097) — Compensation expense — (8,711) Payments 35,946 2,038 Foreign currency translation 894 (118) Balance at September 30, 2023 $ (36,533) $ (14,983) Earnout accruals of zero and $36.0 million were recorded within Current liabilities - Other current liabilities as of September 30, 2023, and December 31, 2022, respectively, and earnout accruals of $36.5 million and zero were recorded within Non-current liabilities - Other non-current liabilities as of September 30, 2023, and December 31, 2022, respectively. Contingent compensation accruals of $5.3 million and $1.5 million are recorded within Current liabilities - Accrued salaries and benefits as of September 30, 2023 and December 31, 2022, respectively, and contingent compensation accruals of $9.6 million and $6.7 million are recorded within Non-current liabilities - Accrued salaries and benefits as of September 30, 2023 and December 31, 2022, respectively. Goodwill Goodwill represents the difference between the purchase price of acquired companies and the related fair value of the net assets acquired, which is accounted for by the acquisition method of accounting. The Company performs assessments of the carrying value of goodwill at least annually and whenever events occur or circumstances indicate that a carrying amount of goodwill may not be recoverable. During the three months ended June 30, 2023, an interim goodwill impairment evaluation was conducted to determine the fair value of the Company's goodwill. Goodwill is valued using significant inputs that are not observable in the market which are defined as Level 3 inputs pursuant to fair value measurement accounting. The Company determines the fair value of goodwill using discounted cash flow models. The following table provides a reconciliation of the beginning and ending balance of Level 3 assets for the nine months ended September 30, 2023: Goodwill Balance at December 31, 2022 $ 138,361 Acquired goodwill 68,338 Impairment (7,246) Foreign currency translation (1,212) Balance at September 30, 2023 $ 198,241 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions On February 1, 2023, the Company acquired Atreus Group GmbH ("Atreus"), a leading provider of executive interim management in Germany. The Company paid $33.4 million in the first quarter of 2023, with a subsequent estimated payment of between $9.0 million and $13.0 million to be paid in 2023 upon the completion of Atreus' statutory audit for the year ended December 31, 2022, for all of the outstanding equity of Atreus. The former owners of Atreus are eligible to receive additional cash consideration, which the Company estimated on the acquisition date to be between $30.0 million and $40.0 million, to be paid in 2026 based on the achievement of certain revenue and operating income milestones for the period from the acquisition date through 2025. When estimating the present value of future cash consideration, the Company accrued an estimated $32.0 million as of the acquisition date for the earnout liability. The Company recorded an estimated $11.3 million for customer relationships, $5.4 million for software, $2.5 million for a trade name and $61.3 million of goodwill. Goodwill is primarily related to the acquired workforce and strategic fit and is not deductible for tax purposes. The consideration transferred was allocated on a preliminary basis to the assets acquired and liabilities assumed on their estimated fair values at the date of acquisition. The measurement period for purchase price allocation ends when information on the facts and circumstances becomes available, not to exceed twelve months, and the Company expects to finalize its measurements for the acquisition during the fourth quarter of 2023 upon the evaluation of the statutory audit results and determination of the final payment amount. As of September 30, 2023, the allocations remain preliminary with regard to customer relationships, software, trade name, goodwill and earnout liability.On April 1, 2023, the Company acquired businessfourzero, a next generation consultancy specializing in developing and implementing purpose-driven change. In connection with the acquisition, the Company paid $9.5 million in the second quarter of 2023 with a subsequent working capital settlement of $2.2 million paid in the third quarter of 2023. The former owners of businessfourzero are eligible to receive additional cash consideration, which the Company estimated on the acquisition date to be between $4.0 million and $8.0 million, to be paid in 2026 based on the achievement of certain revenue and operating income metrics for the period from the acquisition date through 2025. When estimating the present value of future cash consideration, the Company accrued an estimated $4.3 million as of the acquisition date for the earnout liability. The Company recorded $3.5 million for customer relationships, $0.5 million for a trade name, and $7.1 million of goodwill. The goodwill is primarily related to the acquired workforce and strategic fit. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The Company's goodwill by segment (for the segments that had recorded goodwill) is as follows: September 30, December 31, Executive Search Americas $ 91,519 $ 91,383 Europe 1,432 1,449 Total Executive Search 92,951 92,832 On-Demand Talent 105,290 45,529 Heidrick Consulting 7,246 — Goodwill, gross 205,487 138,361 Accumulated impairment (7,246) — Total goodwill $ 198,241 $ 138,361 Changes in the carrying amount of goodwill by segment (for the segments that had recorded goodwill) for the nine months ended September 30, 2023, are as follows: Executive Search On-Demand Talent Heidrick Consulting Americas Europe Total Goodwill $ 91,383 $ 1,449 $ 45,529 $ — $ 138,361 Accumulated impairment losses — — — — — Balance at December 31, 2022 91,383 1,449 45,529 — 138,361 Atreus acquisition — — 61,265 — 61,265 businessfourzero acquisition — — — 7,073 7,073 Impairment — — — (7,246) (7,246) Foreign currency translation 136 (17) (1,504) 173 (1,212) Goodwill 91,519 1,432 105,290 7,246 205,487 Accumulated impairment losses — — — (7,246) (7,246) Balance at September 30, 2023 $ 91,519 $ 1,432 $ 105,290 $ — $ 198,241 In February 2023, the Company acquired Atreus and recorded an estimated $61.3 million of goodwill related to the acquisition in the On-Demand Talent operating segment. In April 2023, the Company acquired businessfourzero and recorded an estimated $7.1 million of goodwill related to the acquisition in the Heidrick Consulting operating segment. On October 31, 2022, the Company conducted its annual goodwill impairment evaluation, which indicated that the carrying value of the Heidrick Consulting reporting unit was less than its fair value. During the three months ended June 30, 2023, the Company acquired businessfourzero and recorded approximately $7.1 million of goodwill in the Heidrick Consulting reporting unit. Due to the inclusion of goodwill in a reporting unit with a pre-existing fair value shortfall, the Company evaluated the recent and anticipated future financial performance of the Heidrick Consulting reporting unit and determined that it was more likely than not that the fair value of the reporting unit was less than its carrying value. As a result, the Company identified a triggering event and performed an interim goodwill impairment evaluation during the three months ended June 30, 2023. During the impairment evaluation process, the Company used a discounted cash flow methodology to estimate the fair value of each of its reporting units. The discounted cash flow approach is dependent on a number of factors, including estimates of future market growth and trends, forecasted revenue and costs, capital investments, appropriate discount rates, certain assumptions to allocate shared costs, assets and liabilities, historical and projected performance of the reporting unit, and the macroeconomic conditions affecting each of the Company’s reporting units. The assumptions used in the determination of fair value were (1) a forecast of growth in the near and long term; (2) the discount rate; (3) working capital investments; (4) macroeconomic conditions and (5) other factors. Based on the results of the impairment evaluation, the Company determined that the goodwill within the Heidrick Consulting reporting unit was impaired, which resulted in an impairment charge of $7.2 million to write off all of the associated goodwill. The impairment charge is recorded within Impairment charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2023, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023. The impairment was non-cash in nature and did not affect the Company's current liquidity, cash flows, borrowing capability or operations, nor did it impact the debt covenants under the Company's credit agreement. Other Intangible Assets, net The Company’s other intangible assets, net by segment, are as follows: September 30, December 31, Executive Search Americas $ 25 $ 51 Europe 111 216 Asia Pacific 4 15 Total Executive Search 140 282 Heidrick Consulting 3,242 — On-Demand Talent 19,127 6,051 Total other intangible assets, net $ 22,509 $ 6,333 In February 2023, the Company acquired Atreus and recorded estimated customer relationships short-term, customer relationships long-term, software and trade name intangible assets in the On-Demand Talent operating segment of $6.0 million, $5.3 million, $5.4 million and $2.5 million, respectively. The combined estimated weighted-average amortization period for the acquired intangible assets is 6.7 years with estimated amortization periods of 5.0, 14.0, 3.0 and 3.0 years for the customer relationships short-term, customer relationships long-term, software and trade name, respectively. In April 2023, the Company acquired businessfourzero and recorded estimated customer relationships and trade name intangible assets in the Heidrick Consulting operating segment of $3.5 million and $0.5 million, respectively. The combined estimated weighted-average amortization period for the acquired intangible assets is 8.3 years with estimated amortization periods of 9.0 and 3.0 years for the customer relationships and trade name intangible assets, respectively. The carrying amount of amortizable intangible assets and the related accumulated amortization are as follows: Weighted September 30, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Client relationships 9.8 $ 25,336 $ (9,771) $ 15,565 $ 10,720 $ (6,164) $ 4,556 Trade name 3.0 4,929 (2,615) 2,314 2,406 (1,925) 481 Software 3.0 8,397 (3,767) 4,630 3,110 (1,814) 1,296 Total intangible assets 7.7 $ 38,662 $ (16,153) $ 22,509 $ 16,236 $ (9,903) $ 6,333 Intangible asset amortization expense for the three months ended September 30, 2023, and 2022 was $2.4 million and $0.8 million, respectively. Intangible asset amortization expense for the nine months ended September 30, 2023, and 2022 was $6.9 million and $2.4 million, respectively. The Company's estimated future amortization expense related to intangible assets as of September 30, 2023, for the following years ended December 31 is as follows: 2023 $ 2,394 2024 7,499 2025 5,750 2026 2,441 2027 1,486 Thereafter 2,939 Total $ 22,509 |
Other Current and Non-current A
Other Current and Non-current Assets and Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current and Non-current Assets and Liabilities | Other Current and Non-current Assets and Liabilities The components of other current assets are as follows: September 30, December 31, Contract assets $ 36,130 $ 35,288 Other 14,481 5,434 Total other current assets $ 50,611 $ 40,722 The components of other current liabilities are as follows: September 30, December 31, Earnout liability $ — $ 36,010 Other 33,171 20,006 Total other current liabilities $ 33,171 $ 56,016 The components of other non-current liabilities are as follows: September 30, December 31, Earnout liability $ 36,533 $ — Other 4,452 5,293 Total other non-current liabilities $ 40,985 $ 5,293 |
Other Current and Non-current Assets and Liabilities | Other Current and Non-current Assets and Liabilities The components of other current assets are as follows: September 30, December 31, Contract assets $ 36,130 $ 35,288 Other 14,481 5,434 Total other current assets $ 50,611 $ 40,722 The components of other current liabilities are as follows: September 30, December 31, Earnout liability $ — $ 36,010 Other 33,171 20,006 Total other current liabilities $ 33,171 $ 56,016 The components of other non-current liabilities are as follows: September 30, December 31, Earnout liability $ 36,533 $ — Other 4,452 5,293 Total other non-current liabilities $ 40,985 $ 5,293 |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Line of Credit | Line of Credit On February 24, 2023, the Company entered into the Second Amendment (the “Second Amendment”) to the Credit Agreement, dated as of October 26, 2018 (the “Credit Agreement” and, as amended by the First Amendment to Credit Agreement, dated as of July 13, 2021, and the Second Amendment, the "Amended Credit Agreement") by and among the Company, Bank of America, N.A., as administrative agent, and the lenders party thereto. The Second Amendment replaced the interest rate benchmark, from LIBOR to the Secured Overnight Financing Rate (“SOFR”). At the Company's option, borrowings under the Amended Credit Agreement will bear interest at one-, three- or six-month term SOFR, or an alternate base rate as set forth in the Amended Credit Agreement, in each case plus an applicable margin. Additionally, the Second Amendment provided the Company with a committed unsecured revolving credit facility in an aggregate amount of $200 million, increased from $175 million as set forth in the Credit Agreement, which includes a sublimit of $25 million for letters of credit and a sublimit of $10 million for swingline loans, with a $75 million expansion feature. Other than the foregoing, the material terms of the Amended Credit Agreement remain unchanged. The Amended Credit Agreement matures on July 13, 2026. Borrowings under the Amended Credit Agreement may be used for working capital, capital expenditures, permitted acquisitions, restricted payments and for other general corporate purposes of the Company and its subsidiaries. The obligations under the Amended Credit Agreement are guaranteed by certain of the Company’s subsidiaries. As of September 30, 2023, and December 31, 2022, the Company had no outstanding borrowings. As of such dates, the Company was in compliance with the financial and other covenants under the Amended Credit Agreement and no event of default existed. |
Stock-Based Compensation and Co
Stock-Based Compensation and Common Stock | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation and Common Stock | Stock-Based Compensation and Common Stock On May 25, 2023, the stockholders of the Company approved an amendment to the Company's Third Amended and Restated 2012 Heidrick & Struggles GlobalShare Program (as so amended, the "Fourth A&R Program") to increase the number of shares of common stock reserved for issuance under the 2012 program by 1,060,000 shares. The Fourth A&R Program provides for grants of stock options, stock appreciation rights, restricted stock units, performance stock units, and other stock-based compensation awards that are valued based upon the grant date fair value of the awards. These awards may be granted to directors, selected employees and independent contractors. As of September 30, 2023, 4,166,113 awards have been issued under the Fourth A&R Program, including 784,325 forfeited awards, and 1,028,212 shares remain available for future awards. The Fourth A&R Program provides that no awards can be granted after May 25, 2033. The Company measures its stock-based compensation costs based on the grant date fair value of the awards and recognizes these costs over the requisite service period. A summary of information with respect to stock-based compensation is as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Salaries and benefits (1) $ 2,934 $ 3,535 $ 6,337 $ 7,713 General and administrative expenses 203 405 1,013 810 Income tax benefit related to stock-based compensation included in net income 864 1,072 2,024 2,320 (1) Includes less than $0.1 million of expense and $0.2 million of income related to cash-settled restricted stock units for the three months ended September 30, 2023, and 2022, respectively, and $0.1 million of expense and $3.1 million of income related to cash-settled restricted stock units for the nine months ended September 30, 2023, and 2022, respectively. Restricted Stock Units Restricted stock units granted to employees are subject to ratable vesting over a three-year or four-year period dependent upon the terms of the individual grant. Compensation expense related to service-based restricted stock units is recognized on a straight-line basis over the vesting period. Non-employee members of the Board of Directors may elect to receive restricted stock units or shares of common stock annually pursuant to the Fourth A&R Program as part of their annual compensation. Based on their respective elections, the Company issued 23,620 and 11,850 restricted stock units for services provided by the non-employee directors during the nine months ended September 30, 2023, and 2022, respectively. Restricted stock units issued to non-employee directors remain unvested until the respective non-employee directors retire from the Board of Directors. Restricted stock unit activity for the nine months ended September 30, 2023, is as follows: Number of Weighted- Outstanding on December 31, 2022 728,285 $ 31.97 Granted 276,227 26.91 Vested and converted to common stock (291,113) 31.04 Forfeited (25,693) 31.54 Outstanding on September 30, 2023 687,706 $ 30.35 As of September 30, 2023, there was $8.3 million of pre-tax unrecognized compensation expense related to unvested restricted stock units, which is expected to be recognized over a weighted average of 2.4 years. Performance Stock Units The Company grants performance stock units to certain of its senior executives. The performance stock units are generally subject to cliff vesting at the end of a three-year period. The vesting will vary between 0% and 200% based on the attainment of certain performance and market conditions over the three-year vesting period. Half of the award is based on the achievement of adjusted operating margin thresholds and half of the award is based on the Company's total shareholder return, relative to a peer group. The fair value of the awards subject to total shareholder return metrics is determined using the Monte Carlo simulation model. A Monte Carlo simulation model uses stock price volatility and other variables to estimate the probability of satisfying the performance conditions and the resulting fair value of the award. The performance stock units are expensed on a straight-line basis over the three-year vesting period. Performance stock unit activity for the nine months ended September 30, 2023, is as follows: Number of Weighted- Outstanding on December 31, 2022 260,452 $ 40.02 Granted 103,916 34.14 Vested and converted to common stock (124,743) 31.51 Forfeited — Outstanding on September 30, 2023 239,625 $ 41.91 As of September 30, 2023, there was $5.4 million of pre-tax unrecognized compensation expense related to unvested performance stock units, which is expected to be recognized over a weighted average of 1.9 years. Phantom Stock Units Phantom stock units are grants of phantom stock with respect to shares of the Company's common stock that are settled in cash and are subject to various restrictions, including restrictions on transferability, vesting and forfeiture provisions. Shares of phantom stock that do not vest for any reason will be forfeited by the recipient and will revert to the Company. Phantom stock units are subject to vesting over a period of four years, and such vesting is subject to certain other conditions, including continued service to the Company. As a result of the cash-settlement feature of the awards, the Company classifies the awards as liability awards, which are measured at fair value at each reporting date and the vested portion of the award is recognized as a liability to the extent that the service condition is deemed probable. The fair value of the phantom stock awards on the balance sheet date is determined using the closing share price of the Company's common stock on that date. The Company recorded phantom stock-based compensation expense of less than $0.1 million and income of $0.2 million during the three months ended September 30, 2023, and 2022, respectively and $0.1 million of expense and $3.1 million of income related to phantom stock units during the nine months September 30, 2023, and 2022, respectively. Phantom stock unit activity for the nine months ended September 30, 2023, is as follows: Number of Outstanding on December 31, 2022 321,155 Granted — Vested (115,180) Forfeited (18,674) Outstanding on September 30, 2023 187,301 As of September 30, 2023, there was $1.0 million of pre-tax unrecognized compensation expense related to unvested phantom stock units, which is expected to be recognized over a weighted average of 2.5 years. Common Stock Non-employee members of the Board of Directors may elect to receive restricted stock units or shares of common stock annually pursuant to the Fourth A&R Program as part of their annual compensation. Based on their respective elections, the Company issued 16,134 and 11,850 shares of common stock for services provided by the non-employee directors during the nine months ended September 30, 2023, and 2022, respectively. On February 11, 2008, the Company's Board of Directors authorized management to repurchase shares of the Company's common stock with an aggregate purchase price of up to $50 million (the "Repurchase Authorization"). From time to time and as business conditions warrant, the Company may purchase shares of its common stock on the open market or in negotiated or block trades. No time limit has been set for completion of this program. During the three months ended June 30, 2023, the Company purchased 36,000 shares of common stock for $0.9 million. There were no purchases of common stock during the three months ended September 30, 2023. There were no purchases of shares of common stock in 2022, and prior to the 2023 purchase, the most recent purchase of the Company's shares of common stock occurred during the year ended December 31, 2012. As of September 30, 2023, the Company has purchased 1,074,670 shares of its common stock pursuant to the Repurchase Authorization for a total of $29.2 million and $20.8 million remains available for future purchases under the Repurchase Authorization. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the year ended December 31, 2020, the Company implemented a restructuring plan (the "2020 Plan") to optimize future growth and profitability. The primary components of the 2020 Plan included a workforce reduction, a reduction of the Company's real estate expenses and professional fees, and the elimination of certain deferred compensation programs. The Company did not incur any charges during the three and nine months ended September 30, 2023 and 2022 and does not anticipate incurring any future charges under the 2020 Plan. Changes in the restructuring accrual for the nine months ended September 30, 2023, were as follows: Employee Related Accrual balance at December 31, 2022 3,422 Cash payments (3,516) Exchange rate fluctuations 94 Accrual balance at September 30, 2023 $ — Restructuring accruals associated with the elimination of certain deferred compensation programs of $3.4 million were recorded within Current liabilities - Accrued salaries and benefits |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company reported income before taxes of $24.0 million and an income tax provision of $9.0 million for the three months ended September 30, 2023. The Company reported income before taxes of $29.5 million and an income tax provision of $8.7 million for the three months ended September 30, 2022. The effective tax rates for the three months ended September 30, 2023, and 2022, were 37.5% and 29.5%, respectively. The effective tax rate for the three months ended September 30, 2023 was impacted by the tax effect on goodwill impairment and the inability to recognize losses. The effective tax rate for the three months ended September 30, 2022 was impacted by one-time items and the mix of income. The Company reported income before taxes of $63.7 million and an income tax provision of $24.1 million for the nine months ended September 30, 2023. The Company reported income before taxes of $92.3 million and an income tax provision of $28.9 million for the nine months ended September 30, 2022. The effective tax rates for the nine months ended September 30, 2023, and 2022, were 37.9% and 31.3%, respectively. The effective tax rate for the nine months ended September 30, 2023 was impacted by the tax effect on goodwill impairment and the inability to recognize losses. The effective tax rate for the nine months ended September 30, 2022 was impacted by one-time items and the mix of income. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income (Loss) | Changes in Accumulated Other Comprehensive Income (Loss) The changes in Accumulated other comprehensive income (loss) (“AOCI”) by component for the nine months ended September 30, 2023, are as follows: Available- Foreign Pension AOCI Balance at December 31, 2022 $ (41) $ (4,163) $ 15 $ (4,189) Other comprehensive income before reclassification, net of tax 68 (3,701) — (3,633) Balance at September 30, 2023 $ 27 $ (7,864) $ 15 $ (7,822) |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has five operating segments. The Executive Search business operates in the Americas, Europe (which includes Africa) and Asia Pacific (which includes the Middle East), and the Heidrick Consulting and On-Demand Talent businesses operate globally. For segment purposes, reimbursements of out-of-pocket expenses classified as revenue and other operating income are reported separately and, therefore, are not included in the results of each segment. The Company believes that analyzing trends in revenue before reimbursements (net revenue) and analyzing operating expenses as a percentage of net revenue, more appropriately reflect its core operations. Revenue and operating income by segment are as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenue Executive Search Americas $ 132,320 $ 143,747 $ 398,210 $ 482,320 Europe 44,606 41,141 129,104 139,017 Asia Pacific 21,888 27,919 68,766 87,928 Total Executive Search 198,814 212,807 596,080 709,265 On-Demand Talent 41,053 23,247 111,410 68,981 Heidrick Consulting 23,293 19,131 66,212 59,501 Revenue before reimbursements (net revenue) 263,160 255,185 773,702 837,747 Reimbursements 4,736 3,086 10,090 7,170 Total revenue $ 267,896 $ 258,271 $ 783,792 $ 844,917 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Operating income (loss) Executive Search Americas $ 39,285 $ 39,741 $ 121,128 $ 123,842 Europe 8,519 5,652 12,663 15,661 Asia Pacific 2,486 4,503 7,132 13,469 Total Executive Search 50,290 49,896 140,923 152,972 On-Demand Talent (4,595) (276) (11,821) (1,207) Heidrick Consulting (1) (4,075) (2,000) (17,877) (4,492) Total segment operating income 41,620 47,620 111,225 147,273 Research and Development (5,560) (5,400) (16,746) (14,347) Global Operations Support (13,923) (13,898) (40,986) (40,506) Total operating income $ 22,137 $ 28,322 $ 53,493 $ 92,420 (1) Includes $7.2 million of impairment charges for the nine months ended September 30, 2023. |
Guarantees
Guarantees | 9 Months Ended |
Sep. 30, 2023 | |
Guarantees and Product Warranties [Abstract] | |
Guarantees | Guarantees The Company has utilized letters of credit to support certain obligations, primarily for its office lease agreements. The letters of credit were made to secure the respective agreements and are for the terms of the agreements, which extend through 2033. For each letter of credit issued, the Company would have to use cash to fulfill the obligation if there is a default on a payment. The maximum amount of undiscounted payments the Company would be required to make in the event of default on all outstanding letters of credit is approximately $4.4 million as of September 30, 2023. The Company has not accrued for these arrangements as no event of default exists or is expected to exist. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company has contingent liabilities from various pending claims and litigation matters arising in the ordinary course of the Company’s business, some of which involve claims for damages that are substantial in amount. Some of these matters are covered in part by insurance. Based upon information currently available, the Company believes the ultimate resolution of such claims and litigation will not have a material adverse effect on its financial condition, results of operations or liquidity. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Cost of Services | Cost of Services Cost of services consists of third-party contractor costs related to the delivery of various services in the Company's On-Demand Talent and Heidrick Consulting operating segments. |
Research and Development | Research and Development Research and development (“R&D”) expense consists of payroll, employee benefits, stock-based compensation, other employee expenses and third-party professional fees associated with the development of new technologies to enhance existing products and services and to expand the range of the Company's offerings. The benefits from the Company's R&D efforts are intended to be utilized to develop and enhance new and existing services and products across the Company's current offerings in Executive Search, Heidrick Consulting and On-Demand Talent, and for products and services in new segments that the Company may embark upon in the future from time to time. |
Marketable Securities | Marketable Securities The Company’s marketable securities consist of available-for-sale debt securities with original maturities exceeding three months. |
Restricted Cash | Restricted Cash The following table provides a reconciliation of the cash and cash equivalents between the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Cash Flows as of September 30, 2023, and 2022, and December 31, 2022, and 2021: |
Earnings per Common Share | Earnings per Common Share Basic earnings per common share are computed by dividing net income by weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Common equivalent shares are excluded from the determination of diluted earnings per share in periods in which they have an anti-dilutive effect. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets , Current liabilities - Operating lease liabilities and Non-current liabilities - Operating lease liabilities in the Company's Condensed Consolidated Balance Sheets. The Company does not have any leases that meet the finance lease criteria. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, an incremental borrowing rate based on the information available at the commencement date is used in determining the present value of lease payments. The operating lease right-of-use asset also includes any lease payments made in advance and any accrued rent expense balances. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components. For office leases, the Company accounts for the lease and non-lease components as a single lease component. For equipment leases, such as vehicles and office equipment, the Company accounts for the lease and non-lease components separately. |
Goodwill | Goodwill Goodwill represents the difference between the purchase price of acquired companies and the related fair value of the net assets acquired, which is accounted for by the acquisition method of accounting. The Company performs assessments of the carrying value of goodwill at least annually and whenever events occur or circumstances indicate that a carrying value of goodwill may not be recoverable. These circumstances include a significant change in business climate, attrition of key personnel, changes in financial condition or results of operations, prolonged decline in the Company’s stock price or market capitalization, increased competition, and other factors. The goodwill impairment test compares the fair value of a reporting unit to its carrying value, including goodwill. The Company operates five reporting units: Americas, Europe (which includes Africa), Asia Pacific (which includes the Middle East), On-Demand Talent and Heidrick Consulting. The fair value of each of the Company’s reporting units is determined using a discounted cash flow methodology. An impairment charge is recognized for the value by which the carrying value of the reporting unit exceeds its fair value; however, the loss recognized is not to exceed the total value of goodwill allocated to that reporting unit. On October 31, 2022, the Company conducted its annual goodwill impairment evaluation, which indicated that the carrying value of the Heidrick Consulting reporting unit was less than its fair value. During the three months ended June 30, 2023, the Company acquired businessfourzero and recorded approximately $7.1 million of goodwill in the Heidrick Consulting reporting unit. Due to the inclusion of goodwill in a reporting unit with a pre-existing fair value shortfall, the Company evaluated the recent and anticipated future financial performance of the Heidrick Consulting reporting unit and determined that it was more likely than not that the fair value of the reporting unit was less than its carrying value. As a result, the Company identified a triggering event and performed an interim goodwill impairment evaluation during the three months ended June 30, 2023. During the impairment evaluation process, the Company used a discounted cash flow methodology to estimate the fair value of each of its reporting units. The discounted cash flow approach is dependent on a number of factors, including estimates of future market growth and trends, forecasted revenue and costs, capital investments, appropriate discount rates, certain assumptions to allocate shared costs, assets and liabilities, historical and projected performance of the reporting unit, and the macroeconomic conditions affecting each of the Company’s reporting units. The assumptions used in the determination of fair value were (1) a forecast of growth in the near and long term; (2) the discount rate; (3) working capital investments; (4) macroeconomic conditions; and (5) other factors. Based on the results of the impairment evaluation, the Company determined that the goodwill within the Heidrick Consulting reporting unit was impaired, which resulted in an impairment charge of $7.2 million to write-off all of the associated goodwill. The impairment charge is recorded within Impairment charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2023, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023. The impairment was non-cash in nature and did not affect the Company's current liquidity, cash flows, borrowing capability or operations; nor did it impact the debt covenants under the Company's credit agreement. |
Recently Issued Financial Accounting Standards | Recently Issued Financial Accounting Standards In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance was intended to provide temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates. This guidance is effective March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2024. The Company is currently evaluating the impact of this accounting guidance. The new guidance is not expected to have a material effect on the Company's financial statements. |
Revenue Recognition | Executive Search Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Generally, each executive search contract contains one performance obligation which is the process of identifying potentially qualified candidates for a specific client position. In most contracts, the transaction price includes both fixed and variable consideration. Fixed compensation is comprised of a retainer, equal to approximately one-third of the estimated first year compensation for the position to be filled, and indirect expenses, equal to a specified percentage of the retainer, as defined in the contract. The Company generally bills clients for the retainer and indirect expenses in one-third increments over a three-month period commencing in the month of a client’s acceptance of the contract. If actual compensation of a placed candidate exceeds the original compensation estimate, the Company is often authorized to bill the client for one-third of the excess compensation. The Company refers to this additional billing as uptick revenue. In most contracts, variable consideration is comprised of uptick revenue and direct expenses. The Company bills its clients for uptick revenue upon completion of the executive search, and direct expenses are billed as incurred. The Company estimates uptick revenue at contract inception, based on a portfolio approach, utilizing the expected value method based on a historical analysis of uptick revenue realized in the Company’s geographic regions and industry practices, and initially records a contract’s uptick revenue in an amount that is probable not to result in a significant reversal of cumulative revenue recognized when the actual amount of uptick revenue for the contract is known. Differences between the estimated and actual amounts of variable consideration are recorded when known. The Company does not estimate revenue for direct expenses as it is not materially different than recognizing revenue as direct expenses are incurred. Revenue from executive search engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance. Revenue from executive search engagements is recognized over the expected average period of performance, in proportion to the estimated personnel time incurred to fulfill the obligations under the executive search contract. Revenue is generally recognized over a period of approximately six months. The Company's executive search contracts contain a replacement guarantee which provides for an additional search to be completed, free of charge except for expense reimbursements, should the candidate presented by the Company be hired by the client and subsequently terminated by the client for performance reasons within a specified period of time. The replacement guarantee is an assurance warranty, which is not a performance obligation under the terms of the executive search contract, as the Company does not provide any services under the terms of the guarantee that transfer benefits to the client in excess of assuring that the identified candidate complies with the agreed-upon specifications. The Company accounts for the replacement guarantee under the relevant warranty guidance in Accounting Standards Codification 460 - Guarantees. On-Demand Talent The Company enters into contracts with clients that outline the general terms and conditions of the assignment to provide on-demand consultants for various types of consulting projects, which consultants may be independent contractors or temporary employees. The consideration the Company expects to receive under each contract is dependent on the time-based fees specified in the contract. Revenue from on-demand engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance. The Company has applied the practical expedient to recognize revenue for these services in the amount to which the Company has a right to invoice the client, as this amount corresponds directly with the value provided to the client for the performance completed to date. For transactions where a third-party contractor is involved in providing the services to the client, the Company reports the revenue and the related direct costs on a gross basis as it has determined that it is the principal in the transaction. The Company is primarily responsible for fulfilling the promise to provide consulting services to its clients and the Company has discretion in establishing the prices charged to clients for the consulting services and is able to contractually obligate the independent service provider to deliver services and deliverables that the Company has agreed to provide to its clients. Heidrick Consulting Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Heidrick Consulting enters into contracts with clients that outline the general terms and conditions of the assignment to provide succession planning, executive assessment, top team and board effectiveness and culture shaping programs. The consideration the Company expects to receive under each contract is generally fixed. Most of the Company's consulting contracts contain one performance obligation, which is the overall process of providing the consulting service requested by the client. The majority of the Company's consulting revenue is recognized over time utilizing both input and output methods. Contracts that contain coaching sessions, training sessions or the completion of assessments are recognized using the output method as each session or assessment is delivered to the client. Contracts that contain general consulting work are recognized using the input method utilizing a measure of progress that is based on time incurred on the project. The Company enters into enterprise agreements with clients to provide a license for online access, via the Company's Culture Connect platform, to training and other proprietary material related to the Company's culture shaping programs. The consideration the Company expects to receive under the terms of an enterprise agreement is comprised of a single fixed fee. The enterprise agreements contain multiple performance obligations, the delivery of materials via Culture Connect and material rights related to options to renew enterprise agreements at a significant discount. The Company allocates the transaction price to the performance obligations in the contract on a stand-alone selling price basis. The stand-alone selling price for the initial term of the enterprise agreement is outlined in the contract and is equal to the price paid by the client for the agreement over the initial term of the contract. The stand-alone selling price for the options to renew, or material right, are not directly observable and must be estimated. This estimate is required to reflect the discount the client would obtain when exercising the option to renew, adjusted for the likelihood that the option will be exercised. The Company estimates the likelihood of renewal using a historical analysis of client renewals. Access to Culture Connect represents a right to access the Company’s intellectual property that the client simultaneously receives and consumes as the Company performs under the agreement, and therefore the Company recognizes revenue over time. Given the continuous nature of this commitment, the Company utilizes straight-line ratable revenue recognition over the estimated subscription period as the Company's clients will receive and consume the benefits from Culture Connect equally throughout the contract period. Revenue related to client renewals of enterprise agreements is recognized over the term of the renewal, which is generally twelve months. Enterprise agreements do not comprise a significant portion of the Company's revenue. Contract Balances Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets and liabilities are classified as current due to the nature of the Company's contracts, which are completed within one year. Contract assets are included within Current assets - Other current assets on the Condensed Consolidated Balance Sheets. Unbilled receivables: Unbilled receivables represents contract assets from revenue recognized over time in excess of the amount billed to the client and the amount billed to the client is solely dependent upon the passage of time. This amount includes revenue recognized in excess of billed Executive Search retainers, Heidrick Consulting fees, and On-Demand Talent fees. Contract assets: Contract assets represent revenue recognized over time in excess of the amount billed to the client, and the amount billed to the client is not solely subject to the passage of time. This amount primarily includes revenue recognized for upticks and contingent placement fees in executive search contracts. Deferred revenue: Contract liabilities consist of deferred revenue, which is equal to billings in excess of revenue recognized. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of the cash and cash equivalents between the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Cash Flows as of September 30, 2023, and 2022, and December 31, 2022, and 2021: September 30, December 31, 2023 2022 2022 2021 Cash and cash equivalents $ 286,429 $ 275,468 $ 355,447 $ 545,225 Restricted cash included within other non-current assets 42 42 42 34 Total cash, cash equivalents and restricted cash $ 286,471 $ 275,510 $ 355,489 $ 545,259 |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Net income $ 14,987 $ 20,826 $ 39,555 $ 63,442 Weighted average shares outstanding: Basic 20,076 19,816 19,998 19,723 Effect of dilutive securities: Restricted stock units 381 462 575 646 Performance stock units 96 135 143 189 Diluted 20,553 20,413 20,716 20,558 Basic earnings per share $ 0.75 $ 1.05 $ 1.98 $ 3.22 Diluted earnings per share $ 0.73 $ 1.02 $ 1.91 $ 3.09 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable | The following table outlines the changes in the contract asset and liability balances from December 31, 2022, to September 30, 2023: September 30, December 31, Change Contract assets Unbilled receivables, net $ 17,322 $ 13,940 $ 3,382 Contract assets 18,808 21,348 (2,540) Total contract assets 36,130 35,288 842 Contract liabilities Deferred revenue $ 41,502 $ 43,057 $ (1,555) |
Credit Losses (Tables)
Credit Losses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Credit Loss [Abstract] | |
Accounts Receivable, Allowance for Credit Loss | The activity in the allowance for credit losses on the Company's trade receivables is as follows: Balance at December 31, 2022 $ 6,643 Provision for credit losses 5,390 Write-offs (5,460) Foreign currency translation (56) Balance at September 30, 2023 $ 6,517 |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value | There were no investments with unrealized losses at September 30, 2023. At December 31, 2022, the fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position, were as follows: Less Than 12 Months Balance Sheet Classification Balance at December 31, 2022 Fair Value Unrealized Loss Cash and Cash Equivalents Marketable Securities U.S. Treasury securities $ 194,056 $ 56 $ 11,918 $ 182,138 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | The components of the Company’s property and equipment are as follows: September 30, December 31, Leasehold improvements $ 42,328 $ 40,829 Office furniture, fixtures and equipment 14,546 14,322 Computer equipment and software 36,743 30,085 Property and equipment, gross 93,617 85,236 Accumulated depreciation (59,583) (55,029) Property and equipment, net $ 34,034 $ 30,207 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Lease, Cost | Lease cost components included within Operating expenses - General and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income were as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Operating lease cost $ 4,751 $ 4,124 $ 13,843 $ 12,967 Variable lease cost 2,213 $ 1,760 7,200 4,393 Total lease cost $ 6,964 $ 5,884 $ 21,043 $ 17,360 Supplemental cash flow information related to the Company's operating leases is as follows for the nine months ended September 30: 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 14,923 $ 13,572 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 7,944 $ 9,059 |
Assets and Liabilities, Lessee | The weighted average remaining lease term and weighted average discount rate for operating leases as of September 30, are as follows: 2023 2022 Weighted Average Remaining Lease Term Operating leases 6.2 years 6.5 years Weighted Average Discount Rate Operating leases 3.77 % 3.31 % |
Lessee, Operating Lease, Liability, Maturity | The future maturities of the Company's operating lease liabilities as of September 30, 2023, for the years ended December 31 are as follows: Operating Lease Maturity 2023 $ 4,304 2024 20,749 2025 12,482 2026 11,161 2027 9,808 Thereafter 27,610 Total lease payments 86,114 Less: Interest 9,288 Present value of lease liabilities $ 76,826 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Unrealized Gain (Loss) on Investments | The Company's cash, cash equivalents, and marketable securities by significant investment category are as follows: Amortized Cost Unrealized Gains Fair Value Cash and Cash Equivalents Marketable Securities Balance at September 30, 2023 Cash $ 171,155 $ — Level 1 (1) : Money market funds 14,585 — U.S. Treasury securities $ 148,221 $ 28 $ 148,249 100,689 47,560 Total Level 1 148,221 28 148,249 115,274 47,560 Total $ 148,221 $ 28 $ 148,249 $ 286,429 $ 47,560 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities Balance at December 31, 2022 Cash $ 247,198 $ — Level 1 (1) : Money market funds 62,338 — U.S. Treasury securities $ 312,121 $ 15 $ (56) $ 312,080 45,911 266,169 Total Level 1 312,121 15 (56) 312,080 108,249 266,169 Total $ 312,121 $ 15 $ (56) $ 312,080 $ 355,447 $ 266,169 (1) Level 1 – Quoted prices in active markets for identical assets and liabilities. |
Fair Value, by Balance Sheet Grouping | The following tables provide a summary of the fair value measurements for each major category of investments, assets designated for retirement and pension plans and associated liabilities measured at fair value: Balance Sheet Classification Current Assets Non-Current Assets Current Liabilities Non-current Liabilities Fair Value Other Current Assets Assets Designated for Retirement and Pension Plans Investments Other Current Liabilities Retirement and Pension Plans Balance at September 30, 2023 Measured on a recurring basis: Level 1 (1) : U.S. non-qualified deferred compensation plan $ 43,154 $ — $ — $ 43,154 $ — $ — Level 2 (2) : Retirement and pension plan assets 12,432 1,237 11,195 — — — Pension benefit obligation (13,783) — — — (1,237) (12,546) Total Level 2 (1,351) 1,237 11,195 — (1,237) (12,546) Total $ 41,803 $ 1,237 $ 11,195 $ 43,154 $ (1,237) $ (12,546) Balance Sheet Classification Current Assets Non-Current Assets Current Liabilities Non-Current Liabilities Fair Value Other Current Assets Assets Designated for Retirement and Pension Plans Investments Other Current Liabilities Retirement and Pension Plans Balance at December 31, 2022 Measured on a recurring basis: Level 1 (1) : U.S. non-qualified deferred compensation plan $ 34,354 $ — $ — $ 34,354 $ — $ — Level 2 (2) : Retirement and pension plan assets 12,584 1,252 11,332 — — — Pension benefit obligation (13,951) — — — (1,252) (12,699) Total Level 2 (1,367) 1,252 11,332 — (1,252) (12,699) Total $ 32,987 $ 1,252 $ 11,332 $ 34,354 $ (1,252) $ (12,699) (1) Level 1 – Quoted prices in active markets for identical assets and liabilities. (2) Level 2 – Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. (3) Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a reconciliation of the beginning and ending balance of Level 3 liabilities for the nine months ended September 30, 2023: Earnout Contingent Compensation Balance at December 31, 2022 $ (36,010) $ (8,192) Purchase accounting (See Note 8, Acquisitions ) (36,266) — Earnout accretion (1,097) — Compensation expense — (8,711) Payments 35,946 2,038 Foreign currency translation 894 (118) Balance at September 30, 2023 $ (36,533) $ (14,983) |
Schedule of Goodwill | The following table provides a reconciliation of the beginning and ending balance of Level 3 assets for the nine months ended September 30, 2023: Goodwill Balance at December 31, 2022 $ 138,361 Acquired goodwill 68,338 Impairment (7,246) Foreign currency translation (1,212) Balance at September 30, 2023 $ 198,241 Changes in the carrying amount of goodwill by segment (for the segments that had recorded goodwill) for the nine months ended September 30, 2023, are as follows: Executive Search On-Demand Talent Heidrick Consulting Americas Europe Total Goodwill $ 91,383 $ 1,449 $ 45,529 $ — $ 138,361 Accumulated impairment losses — — — — — Balance at December 31, 2022 91,383 1,449 45,529 — 138,361 Atreus acquisition — — 61,265 — 61,265 businessfourzero acquisition — — — 7,073 7,073 Impairment — — — (7,246) (7,246) Foreign currency translation 136 (17) (1,504) 173 (1,212) Goodwill 91,519 1,432 105,290 7,246 205,487 Accumulated impairment losses — — — (7,246) (7,246) Balance at September 30, 2023 $ 91,519 $ 1,432 $ 105,290 $ — $ 198,241 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The Company's goodwill by segment (for the segments that had recorded goodwill) is as follows: September 30, December 31, Executive Search Americas $ 91,519 $ 91,383 Europe 1,432 1,449 Total Executive Search 92,951 92,832 On-Demand Talent 105,290 45,529 Heidrick Consulting 7,246 — Goodwill, gross 205,487 138,361 Accumulated impairment (7,246) — Total goodwill $ 198,241 $ 138,361 |
Schedule of Goodwill | The following table provides a reconciliation of the beginning and ending balance of Level 3 assets for the nine months ended September 30, 2023: Goodwill Balance at December 31, 2022 $ 138,361 Acquired goodwill 68,338 Impairment (7,246) Foreign currency translation (1,212) Balance at September 30, 2023 $ 198,241 Changes in the carrying amount of goodwill by segment (for the segments that had recorded goodwill) for the nine months ended September 30, 2023, are as follows: Executive Search On-Demand Talent Heidrick Consulting Americas Europe Total Goodwill $ 91,383 $ 1,449 $ 45,529 $ — $ 138,361 Accumulated impairment losses — — — — — Balance at December 31, 2022 91,383 1,449 45,529 — 138,361 Atreus acquisition — — 61,265 — 61,265 businessfourzero acquisition — — — 7,073 7,073 Impairment — — — (7,246) (7,246) Foreign currency translation 136 (17) (1,504) 173 (1,212) Goodwill 91,519 1,432 105,290 7,246 205,487 Accumulated impairment losses — — — (7,246) (7,246) Balance at September 30, 2023 $ 91,519 $ 1,432 $ 105,290 $ — $ 198,241 |
Schedule of Finite-Lived Intangible Assets | The Company’s other intangible assets, net by segment, are as follows: September 30, December 31, Executive Search Americas $ 25 $ 51 Europe 111 216 Asia Pacific 4 15 Total Executive Search 140 282 Heidrick Consulting 3,242 — On-Demand Talent 19,127 6,051 Total other intangible assets, net $ 22,509 $ 6,333 The carrying amount of amortizable intangible assets and the related accumulated amortization are as follows: Weighted September 30, 2023 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Client relationships 9.8 $ 25,336 $ (9,771) $ 15,565 $ 10,720 $ (6,164) $ 4,556 Trade name 3.0 4,929 (2,615) 2,314 2,406 (1,925) 481 Software 3.0 8,397 (3,767) 4,630 3,110 (1,814) 1,296 Total intangible assets 7.7 $ 38,662 $ (16,153) $ 22,509 $ 16,236 $ (9,903) $ 6,333 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The Company's estimated future amortization expense related to intangible assets as of September 30, 2023, for the following years ended December 31 is as follows: 2023 $ 2,394 2024 7,499 2025 5,750 2026 2,441 2027 1,486 Thereafter 2,939 Total $ 22,509 |
Other Current and Non-current_2
Other Current and Non-current Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | The components of other current assets are as follows: September 30, December 31, Contract assets $ 36,130 $ 35,288 Other 14,481 5,434 Total other current assets $ 50,611 $ 40,722 |
Other Current Liabilities | The components of other current liabilities are as follows: September 30, December 31, Earnout liability $ — $ 36,010 Other 33,171 20,006 Total other current liabilities $ 33,171 $ 56,016 |
Other Noncurrent Liabilities | The components of other non-current liabilities are as follows: September 30, December 31, Earnout liability $ 36,533 $ — Other 4,452 5,293 Total other non-current liabilities $ 40,985 $ 5,293 |
Stock-Based Compensation and _2
Stock-Based Compensation and Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | A summary of information with respect to stock-based compensation is as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Salaries and benefits (1) $ 2,934 $ 3,535 $ 6,337 $ 7,713 General and administrative expenses 203 405 1,013 810 Income tax benefit related to stock-based compensation included in net income 864 1,072 2,024 2,320 (1) Includes less than $0.1 million of expense and $0.2 million of income related to cash-settled restricted stock units for the three months ended September 30, 2023, and 2022, respectively, and $0.1 million of expense and $3.1 million of income related to cash-settled restricted stock units for the nine months ended September 30, 2023, and 2022, respectively. |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | Restricted stock unit activity for the nine months ended September 30, 2023, is as follows: Number of Weighted- Outstanding on December 31, 2022 728,285 $ 31.97 Granted 276,227 26.91 Vested and converted to common stock (291,113) 31.04 Forfeited (25,693) 31.54 Outstanding on September 30, 2023 687,706 $ 30.35 |
Share-based Payment Arrangement, Performance Shares, Outstanding Activity | Performance stock unit activity for the nine months ended September 30, 2023, is as follows: Number of Weighted- Outstanding on December 31, 2022 260,452 $ 40.02 Granted 103,916 34.14 Vested and converted to common stock (124,743) 31.51 Forfeited — Outstanding on September 30, 2023 239,625 $ 41.91 |
Share-Based Compensation, Phantom Shares Award Outstanding Activity | Phantom stock unit activity for the nine months ended September 30, 2023, is as follows: Number of Outstanding on December 31, 2022 321,155 Granted — Vested (115,180) Forfeited (18,674) Outstanding on September 30, 2023 187,301 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | Changes in the restructuring accrual for the nine months ended September 30, 2023, were as follows: Employee Related Accrual balance at December 31, 2022 3,422 Cash payments (3,516) Exchange rate fluctuations 94 Accrual balance at September 30, 2023 $ — |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in Accumulated other comprehensive income (loss) (“AOCI”) by component for the nine months ended September 30, 2023, are as follows: Available- Foreign Pension AOCI Balance at December 31, 2022 $ (41) $ (4,163) $ 15 $ (4,189) Other comprehensive income before reclassification, net of tax 68 (3,701) — (3,633) Balance at September 30, 2023 $ 27 $ (7,864) $ 15 $ (7,822) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Revenue and operating income by segment are as follows: Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenue Executive Search Americas $ 132,320 $ 143,747 $ 398,210 $ 482,320 Europe 44,606 41,141 129,104 139,017 Asia Pacific 21,888 27,919 68,766 87,928 Total Executive Search 198,814 212,807 596,080 709,265 On-Demand Talent 41,053 23,247 111,410 68,981 Heidrick Consulting 23,293 19,131 66,212 59,501 Revenue before reimbursements (net revenue) 263,160 255,185 773,702 837,747 Reimbursements 4,736 3,086 10,090 7,170 Total revenue $ 267,896 $ 258,271 $ 783,792 $ 844,917 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Operating income (loss) Executive Search Americas $ 39,285 $ 39,741 $ 121,128 $ 123,842 Europe 8,519 5,652 12,663 15,661 Asia Pacific 2,486 4,503 7,132 13,469 Total Executive Search 50,290 49,896 140,923 152,972 On-Demand Talent (4,595) (276) (11,821) (1,207) Heidrick Consulting (1) (4,075) (2,000) (17,877) (4,492) Total segment operating income 41,620 47,620 111,225 147,273 Research and Development (5,560) (5,400) (16,746) (14,347) Global Operations Support (13,923) (13,898) (40,986) (40,506) Total operating income $ 22,137 $ 28,322 $ 53,493 $ 92,420 (1) Includes $7.2 million of impairment charges for the nine months ended September 30, 2023. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Reconciliation of Cash and Cash Equivalents between Balance Sheet and Cash Flow Statements (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 286,429 | $ 355,447 | $ 275,468 | $ 545,225 |
Restricted cash included within other non-current assets | 42 | 42 | 42 | 34 |
Total cash, cash equivalents and restricted cash | $ 286,471 | $ 355,489 | $ 275,510 | $ 545,259 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||
Net income | $ 14,987 | $ 8,982 | $ 15,586 | $ 20,826 | $ 24,149 | $ 18,467 | $ 39,555 | $ 63,442 |
Weighted average shares outstanding: | ||||||||
Basic (in shares) | 20,076,000 | 19,816,000 | 19,998,000 | 19,723,000 | ||||
Diluted (in shares) | 20,553,000 | 20,413,000 | 20,716,000 | 20,558,000 | ||||
Basic earnings per share (in dollars per share) | $ 0.75 | $ 1.05 | $ 1.98 | $ 3.22 | ||||
Diluted earnings per share (in dollars per share) | $ 0.73 | $ 1.02 | $ 1.91 | $ 3.09 | ||||
Restricted stock units | ||||||||
Weighted average shares outstanding: | ||||||||
Effect of dilutive securities: | 381,000 | 462,000 | 575,000 | 646,000 | ||||
Performance stock units | ||||||||
Weighted average shares outstanding: | ||||||||
Effect of dilutive securities: | 96,000 | 135,000 | 143,000 | 189,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Apr. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) reporting_unit | |
Significant Accounting Policies [Line Items] | |||
Number of reporting units | reporting_unit | 5 | ||
Goodwill, acquired during period | $ 68,338 | ||
Impairment | 7,246 | ||
Heidrick Consulting | |||
Significant Accounting Policies [Line Items] | |||
Impairment | 7,246 | ||
BusinessFourZero | |||
Significant Accounting Policies [Line Items] | |||
Goodwill, acquired during period | $ 7,100 | $ 7,100 | 7,073 |
BusinessFourZero | Heidrick Consulting | |||
Significant Accounting Policies [Line Items] | |||
Goodwill, acquired during period | $ 7,073 |
Revenue - Summary of Changes in
Revenue - Summary of Changes in Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Contract assets | ||
Unbilled receivables, net | $ 17,322 | $ 13,940 |
Contract assets | 18,808 | 21,348 |
Total contract assets | 36,130 | 35,288 |
Contract liabilities | ||
Deferred revenue | 41,502 | $ 43,057 |
Change in contract assets | ||
Unbilled receivables, net | 3,382 | |
Contract assets | (2,540) | |
Total contract assets | 842 | |
Change in contract liabilities | ||
Deferred revenue | $ (1,555) |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, performance obligation, description of timing | six months |
Deferred revenue recognized | $ 37.5 |
Contract with customer, performance obligation satisfied in previous period | $ 19.3 |
Heidrick Consulting | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, performance obligation, description of timing | twelve months |
Credit Losses - Activity in All
Credit Losses - Activity in Allowance for Credit Loss for Trade Receivable (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance at December 31, 2022 | $ 6,643 |
Provision for credit losses | 5,390 |
Write-offs | (5,460) |
Foreign currency translation | (56) |
Balance at September 30, 2023 | $ 6,517 |
Credit Losses - Fair Value and
Credit Losses - Fair Value and Unrealized Losses on Available-for-Sale Debt Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items] | ||
Fair Value | $ 148,249 | $ 312,080 |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items] | ||
Fair Value | 194,056 | |
Unrealized Loss | 56 | |
Cash and Cash Equivalents | U.S. Treasury securities | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items] | ||
Fair Value | 11,918 | |
Marketable Securities | U.S. Treasury securities | ||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Line Items] | ||
Fair Value | $ 182,138 |
Credit Losses - Narrative (Deta
Credit Losses - Narrative (Details) | 9 Months Ended | |
Sep. 30, 2023 USD ($) | Dec. 31, 2022 investment | |
Credit Loss [Abstract] | ||
Debt securities, available-for-sale, unrealized loss | $ | $ 0 | |
Number of positions in unrealized loss | investment | 1 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 93,617 | $ 85,236 |
Accumulated depreciation | (59,583) | (55,029) |
Property and equipment, net | 34,034 | 30,207 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 42,328 | 40,829 |
Office furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 14,546 | 14,322 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 36,743 | $ 30,085 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 2.4 | $ 1.8 | $ 6.6 | $ 5.4 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Sep. 30, 2023 |
Minimum | Equipment | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract (in years) | 1 year |
Minimum | Building | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract (in years) | 1 year |
Maximum | Equipment | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract (in years) | 4 years 9 months 18 days |
Maximum | Building | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract (in years) | 10 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Operating lease cost | $ 4,751 | $ 4,124 | $ 13,843 | $ 12,967 |
Variable lease cost | 2,213 | 1,760 | 7,200 | 4,393 |
Total lease cost | $ 6,964 | $ 5,884 | $ 21,043 | $ 17,360 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 14,923 | $ 13,572 |
Right-of-use assets obtained in exchange for lease obligations: | $ 7,944 | $ 9,059 |
Leases - Weighted Average Infor
Leases - Weighted Average Information (Details) | Sep. 30, 2023 | Sep. 30, 2022 |
Leases [Abstract] | ||
Weighted Average Remaining Lease Term | 6 years 2 months 12 days | 6 years 6 months |
Weighted Average Discount Rate | 3.77% | 3.31% |
Leases - Future Maturities of O
Leases - Future Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
2023 | $ 4,304 |
2024 | 20,749 |
2025 | 12,482 |
2026 | 11,161 |
2027 | 9,808 |
Thereafter | 27,610 |
Total lease payments | 86,114 |
Less: Interest | 9,288 |
Present value of lease liabilities | $ 76,826 |
Financial Instruments and Fai_3
Financial Instruments and Fair Value - Cash, Cash Equivalents, and Marketable Securities by Significant Investment Category (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | $ 286,429 | $ 355,447 | $ 275,468 | $ 545,225 |
Amortized Cost | 148,221 | 312,121 | ||
Unrealized Gains | 28 | 15 | ||
Unrealized Losses | (56) | |||
Fair Value | 148,249 | 312,080 | ||
Marketable Securities | 47,560 | 266,169 | ||
Cash | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Marketable Securities | 0 | 0 | ||
Fair Value, Inputs, Level 1 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | 115,274 | 108,249 | ||
Amortized Cost | 148,221 | 312,121 | ||
Unrealized Gains | 28 | 15 | ||
Unrealized Losses | (56) | |||
Fair Value | 148,249 | 312,080 | ||
Marketable Securities | 47,560 | 266,169 | ||
Fair Value, Inputs, Level 1 | Money market funds | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | 14,585 | 62,338 | ||
Marketable Securities | 0 | 0 | ||
Fair Value, Inputs, Level 1 | U.S. Treasury securities | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | 100,689 | 45,911 | ||
Amortized Cost | 148,221 | 312,121 | ||
Unrealized Gains | 28 | 15 | ||
Unrealized Losses | (56) | |||
Fair Value | 148,249 | 312,080 | ||
Marketable Securities | 47,560 | 266,169 | ||
Cash | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents | $ 171,155 | $ 247,198 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value - Narrative (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Aggregate cost basis for non-qualified deferred compensation plan | $ 35,900,000 | $ 29,100,000 |
Acquisition earnout accruals, current | 0 | 36,010,000 |
Acquisition earnout accruals, non-current | 36,533,000 | 0 |
Earnout | Fair Value, Inputs, Level 3 | Other current liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Acquisition earnout accruals, current | 0 | 36,000,000 |
Earnout | Fair Value, Inputs, Level 3 | Other liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Acquisition earnout accruals, non-current | 36,500,000 | 0 |
Contingent Compensation | Fair Value, Inputs, Level 3 | Current accrued salaries and benefits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Acquisition earnout accruals, current | 5,300,000 | 1,500,000 |
Contingent Compensation | Fair Value, Inputs, Level 3 | Non-current accrued salaries and benefits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Acquisition earnout accruals, non-current | $ 9,600,000 | $ 6,700,000 |
Financial Instruments and Fai_5
Financial Instruments and Fair Value - Fair Value by Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | $ 41,803 | $ 32,987 |
Other Current Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | 1,237 | 1,252 |
Assets Designated for Retirement and Pension Plans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | 11,195 | 11,332 |
Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | 43,154 | 34,354 |
Other Current Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | (1,237) | (1,252) |
Retirement and Pension Plans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | (12,546) | (12,699) |
Fair Value, Inputs, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
U.S. non-qualified deferred compensation plan | 43,154 | 34,354 |
Fair Value, Inputs, Level 1 | Other Current Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
U.S. non-qualified deferred compensation plan | 0 | 0 |
Fair Value, Inputs, Level 1 | Assets Designated for Retirement and Pension Plans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
U.S. non-qualified deferred compensation plan | 0 | 0 |
Fair Value, Inputs, Level 1 | Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
U.S. non-qualified deferred compensation plan | 43,154 | 34,354 |
Fair Value, Inputs, Level 1 | Other Current Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
U.S. non-qualified deferred compensation plan | 0 | 0 |
Fair Value, Inputs, Level 1 | Retirement and Pension Plans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
U.S. non-qualified deferred compensation plan | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Retirement and pension plan assets | 12,432 | 12,584 |
Pension benefit obligation | (13,783) | (13,951) |
Total | (1,351) | (1,367) |
Fair Value, Inputs, Level 2 | Other Current Assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Retirement and pension plan assets | 1,237 | 1,252 |
Pension benefit obligation | 0 | 0 |
Total | 1,237 | 1,252 |
Fair Value, Inputs, Level 2 | Assets Designated for Retirement and Pension Plans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Retirement and pension plan assets | 11,195 | 11,332 |
Pension benefit obligation | 0 | 0 |
Total | 11,195 | 11,332 |
Fair Value, Inputs, Level 2 | Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Retirement and pension plan assets | 0 | 0 |
Pension benefit obligation | 0 | 0 |
Total | 0 | 0 |
Fair Value, Inputs, Level 2 | Other Current Liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Retirement and pension plan assets | 0 | 0 |
Pension benefit obligation | (1,237) | (1,252) |
Total | (1,237) | (1,252) |
Fair Value, Inputs, Level 2 | Retirement and Pension Plans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Retirement and pension plan assets | 0 | 0 |
Pension benefit obligation | (12,546) | (12,699) |
Total | $ (12,546) | $ (12,699) |
Financial Instruments and Fai_6
Financial Instruments and Fair Value - Level 3 Liabilities (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Earnout | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 31, 2022 | $ (36,010) |
Purchase accounting (See Note 8, Acquisitions) | (36,266) |
Earnout accretion | (1,097) |
Compensation expense | 0 |
Payments | 35,946 |
Foreign currency translation | 894 |
Balance at September 30, 2023 | (36,533) |
Contingent Compensation | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 31, 2022 | (8,192) |
Purchase accounting (See Note 8, Acquisitions) | 0 |
Earnout accretion | 0 |
Compensation expense | (8,711) |
Payments | 2,038 |
Foreign currency translation | (118) |
Balance at September 30, 2023 | $ (14,983) |
Financial Instruments and Fai_7
Financial Instruments and Fair Value - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 138,361 |
Acquired goodwill | 68,338 |
Impairment | (7,246) |
Foreign currency translation | (1,212) |
Goodwill, ending balance | $ 198,241 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Apr. 01, 2023 | Feb. 01, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Apr. 30, 2023 | Feb. 28, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||||||||
Payments to acquire businesses, gross | $ 37,953 | $ 0 | ||||||||
Goodwill | $ 198,241 | $ 198,241 | $ 138,361 | |||||||
Atreus | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to acquire businesses, gross | $ 33,400 | |||||||||
Future consideration, minimum | 30,000 | |||||||||
Future consideration, maximum | 40,000 | |||||||||
Goodwill | 61,300 | |||||||||
Atreus | Earnout | Fair Value, Inputs, Level 3 | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Acquisition earnout accrued | 32,000 | |||||||||
Atreus | Client relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles acquired | 11,300 | |||||||||
Atreus | Software | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles acquired | 5,400 | |||||||||
Atreus | Trade name | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles acquired | $ 2,500 | $ 2,500 | ||||||||
Atreus | Minimum | Forecast | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to acquire businesses, gross | $ 9,000 | |||||||||
Atreus | Maximum | Forecast | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to acquire businesses, gross | $ 13,000 | |||||||||
BusinessFourZero | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Payments to acquire businesses, gross | $ 2,200 | $ 9,500 | ||||||||
Future consideration, minimum | $ 4,000 | |||||||||
Future consideration, maximum | 8,000 | |||||||||
Goodwill | 7,100 | |||||||||
BusinessFourZero | Earnout | Fair Value, Inputs, Level 3 | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Acquisition earnout accrued | 4,300 | |||||||||
BusinessFourZero | Client relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles acquired | 3,500 | $ 3,500 | ||||||||
BusinessFourZero | Trade name | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Finite-lived intangibles acquired | $ 500 | $ 500 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill by Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill [Line Items] | ||
Goodwill, gross | $ 205,487 | $ 138,361 |
Accumulated impairment losses | (7,246) | 0 |
Goodwill | 198,241 | 138,361 |
Executive Search | ||
Goodwill [Line Items] | ||
Goodwill, gross | 92,951 | 92,832 |
Executive Search | Americas | ||
Goodwill [Line Items] | ||
Goodwill, gross | 91,519 | 91,383 |
Accumulated impairment losses | 0 | 0 |
Goodwill | 91,519 | 91,383 |
Executive Search | Europe | ||
Goodwill [Line Items] | ||
Goodwill, gross | 1,432 | 1,449 |
Accumulated impairment losses | 0 | 0 |
Goodwill | 1,432 | 1,449 |
On-Demand Talent | ||
Goodwill [Line Items] | ||
Goodwill, gross | 105,290 | 45,529 |
Accumulated impairment losses | 0 | 0 |
Goodwill | 105,290 | 45,529 |
Heidrick Consulting | ||
Goodwill [Line Items] | ||
Goodwill, gross | 7,246 | 0 |
Accumulated impairment losses | (7,246) | 0 |
Goodwill | $ 0 | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Feb. 28, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | $ 138,361 | ||||
Acquired goodwill | 68,338 | ||||
Impairment | (7,246) | ||||
Foreign currency translation | (1,212) | ||||
Goodwill, ending balance | 198,241 | ||||
Goodwill, gross | 205,487 | $ 138,361 | |||
Accumulated impairment losses | (7,246) | 0 | |||
Atreus | |||||
Goodwill [Roll Forward] | |||||
Acquired goodwill | $ 61,300 | 61,265 | |||
BusinessFourZero | |||||
Goodwill [Roll Forward] | |||||
Acquired goodwill | $ 7,100 | $ 7,100 | 7,073 | ||
Executive Search | |||||
Goodwill [Roll Forward] | |||||
Goodwill, gross | 92,951 | 92,832 | |||
On-Demand Talent | |||||
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | 45,529 | ||||
Impairment | 0 | ||||
Foreign currency translation | (1,504) | ||||
Goodwill, ending balance | 105,290 | ||||
Goodwill, gross | 105,290 | 45,529 | |||
Accumulated impairment losses | 0 | 0 | |||
On-Demand Talent | Atreus | |||||
Goodwill [Roll Forward] | |||||
Acquired goodwill | 61,265 | ||||
On-Demand Talent | BusinessFourZero | |||||
Goodwill [Roll Forward] | |||||
Acquired goodwill | 0 | ||||
Heidrick Consulting | |||||
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | 0 | ||||
Impairment | (7,246) | ||||
Foreign currency translation | 173 | ||||
Goodwill, ending balance | 0 | ||||
Goodwill, gross | 7,246 | 0 | |||
Accumulated impairment losses | (7,246) | 0 | |||
Heidrick Consulting | Atreus | |||||
Goodwill [Roll Forward] | |||||
Acquired goodwill | 0 | ||||
Heidrick Consulting | BusinessFourZero | |||||
Goodwill [Roll Forward] | |||||
Acquired goodwill | 7,073 | ||||
Americas | Executive Search | |||||
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | 91,383 | ||||
Impairment | 0 | ||||
Foreign currency translation | 136 | ||||
Goodwill, ending balance | 91,519 | ||||
Goodwill, gross | 91,519 | 91,383 | |||
Accumulated impairment losses | 0 | 0 | |||
Americas | Executive Search | Atreus | |||||
Goodwill [Roll Forward] | |||||
Acquired goodwill | 0 | ||||
Americas | Executive Search | BusinessFourZero | |||||
Goodwill [Roll Forward] | |||||
Acquired goodwill | 0 | ||||
Europe | Executive Search | |||||
Goodwill [Roll Forward] | |||||
Goodwill, beginning balance | 1,449 | ||||
Impairment | 0 | ||||
Foreign currency translation | (17) | ||||
Goodwill, ending balance | 1,432 | ||||
Goodwill, gross | 1,432 | 1,449 | |||
Accumulated impairment losses | 0 | $ 0 | |||
Europe | Executive Search | Atreus | |||||
Goodwill [Roll Forward] | |||||
Acquired goodwill | 0 | ||||
Europe | Executive Search | BusinessFourZero | |||||
Goodwill [Roll Forward] | |||||
Acquired goodwill | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Apr. 30, 2023 | Feb. 28, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Apr. 01, 2023 | Feb. 01, 2023 | |
Goodwill [Line Items] | |||||||||
Goodwill, acquired during period | $ 68,338 | ||||||||
Impairment | 7,246 | ||||||||
Amortization period (in years) | 7 years 8 months 12 days | ||||||||
Amortization of intangible assets | $ 2,400 | $ 800 | 6,900 | $ 2,400 | |||||
Software | |||||||||
Goodwill [Line Items] | |||||||||
Amortization period (in years) | 3 years | ||||||||
Trade name | |||||||||
Goodwill [Line Items] | |||||||||
Amortization period (in years) | 3 years | ||||||||
Client relationships | |||||||||
Goodwill [Line Items] | |||||||||
Amortization period (in years) | 9 years 9 months 18 days | ||||||||
Heidrick Consulting | |||||||||
Goodwill [Line Items] | |||||||||
Impairment | 7,246 | ||||||||
Atreus | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill, acquired during period | $ 61,300 | 61,265 | |||||||
Amortization period (in years) | 6 years 8 months 12 days | ||||||||
Atreus | Customer relationships, short-term | |||||||||
Goodwill [Line Items] | |||||||||
Finite-lived intangibles acquired | $ 6,000 | ||||||||
Amortization period (in years) | 5 years | ||||||||
Atreus | Customer relationships, long-term | |||||||||
Goodwill [Line Items] | |||||||||
Finite-lived intangibles acquired | $ 5,300 | ||||||||
Amortization period (in years) | 14 years | ||||||||
Atreus | Software | |||||||||
Goodwill [Line Items] | |||||||||
Finite-lived intangibles acquired | $ 5,400 | ||||||||
Amortization period (in years) | 3 years | ||||||||
Atreus | Trade name | |||||||||
Goodwill [Line Items] | |||||||||
Finite-lived intangibles acquired | $ 2,500 | $ 2,500 | |||||||
Amortization period (in years) | 3 years | ||||||||
Atreus | Client relationships | |||||||||
Goodwill [Line Items] | |||||||||
Finite-lived intangibles acquired | $ 11,300 | ||||||||
Atreus | Heidrick Consulting | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill, acquired during period | 0 | ||||||||
BusinessFourZero | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill, acquired during period | $ 7,100 | $ 7,100 | 7,073 | ||||||
Amortization period (in years) | 8 years 3 months 18 days | ||||||||
BusinessFourZero | Trade name | |||||||||
Goodwill [Line Items] | |||||||||
Finite-lived intangibles acquired | $ 500 | $ 500 | |||||||
Amortization period (in years) | 3 years | ||||||||
BusinessFourZero | Client relationships | |||||||||
Goodwill [Line Items] | |||||||||
Finite-lived intangibles acquired | $ 3,500 | $ 3,500 | |||||||
Amortization period (in years) | 9 years | ||||||||
BusinessFourZero | Heidrick Consulting | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill, acquired during period | $ 7,073 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Other Intangible Assets by Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Total other intangible assets, net | $ 22,509 | $ 6,333 |
Executive Search | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total other intangible assets, net | 140 | 282 |
Heidrick Consulting | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total other intangible assets, net | 3,242 | 0 |
On-Demand Talent | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total other intangible assets, net | 19,127 | 6,051 |
Americas | Executive Search | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total other intangible assets, net | 25 | 51 |
Europe | Executive Search | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total other intangible assets, net | 111 | 216 |
Asia Pacific | Executive Search | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total other intangible assets, net | $ 4 | $ 15 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets - Finite-Lived Intangible Assets and Accumulated Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 7 years 8 months 12 days | |
Gross Carrying Amount | $ 38,662 | $ 16,236 |
Accumulated Amortization | (16,153) | (9,903) |
Total other intangible assets, net | $ 22,509 | 6,333 |
Client relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 9 years 9 months 18 days | |
Gross Carrying Amount | $ 25,336 | 10,720 |
Accumulated Amortization | (9,771) | (6,164) |
Total other intangible assets, net | $ 15,565 | 4,556 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 3 years | |
Gross Carrying Amount | $ 4,929 | 2,406 |
Accumulated Amortization | (2,615) | (1,925) |
Total other intangible assets, net | $ 2,314 | 481 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Life (Years) | 3 years | |
Gross Carrying Amount | $ 8,397 | 3,110 |
Accumulated Amortization | (3,767) | (1,814) |
Total other intangible assets, net | $ 4,630 | $ 1,296 |
Goodwill and Other Intangible_8
Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 2,394 | |
2024 | 7,499 | |
2025 | 5,750 | |
2026 | 2,441 | |
2027 | 1,486 | |
Thereafter | 2,939 | |
Total other intangible assets, net | $ 22,509 | $ 6,333 |
Other Current and Non-current_3
Other Current and Non-current Assets and Liabilities - Components of Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Contract assets | $ 36,130 | $ 35,288 |
Other | 14,481 | 5,434 |
Other current assets | $ 50,611 | $ 40,722 |
Other Current and Non-current_4
Other Current and Non-current Assets and Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Earnout liability | $ 0 | $ 36,010 |
Other | 33,171 | 20,006 |
Other current liabilities | $ 33,171 | $ 56,016 |
Other Current and Non-current_5
Other Current and Non-current Assets and Liabilities - Schedule of Other Non-Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Earnout liability | $ 36,533 | $ 0 |
Other | 4,452 | 5,293 |
Other non-current liabilities | $ 40,985 | $ 5,293 |
Line of Credit (Details)
Line of Credit (Details) - The Credit Agreement - Line of Credit - USD ($) | Feb. 24, 2023 | Sep. 30, 2023 | Feb. 23, 2023 | Dec. 31, 2022 |
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | $ 175,000,000 | ||
Expansion borrowing capacity | 75,000,000 | |||
Outstanding borrowings | $ 0 | $ 0 | ||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | 25,000,000 | |||
Bridge Loan | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 |
Stock-Based Compensation and _3
Stock-Based Compensation and Common Stock - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
May 25, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Feb. 11, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Additional shares authorized (in shares) | 1,060,000 | |||||||
Awards issued to date (in shares) | 4,166,113 | 4,166,113 | ||||||
Awards forfeited to date (in shares) | 784,325 | 784,325 | ||||||
Awards available for grant (in shares) | 1,028,212 | 1,028,212 | ||||||
Shares issued for services (in shares) | 16,134 | 11,850 | ||||||
Share-based payment arrangement, expense (income) | $ 100,000 | $ (200,000) | $ 100,000 | $ (3,100,000) | ||||
Stock repurchase program, authorized amount | $ 50,000,000 | |||||||
Repurchase of common stock (in shares) | 0 | 36,000 | 0 | |||||
Repurchase of common stock | $ 904,000 | |||||||
Total shares acquired to date (in shares) | 1,074,670 | 1,074,670 | ||||||
Total shares acquired to date | $ 29,200,000 | $ 29,200,000 | ||||||
Remaining authorized repurchase amount | 20,800,000 | 20,800,000 | ||||||
Performance stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Unrecognized compensation expense | 5,400,000 | $ 5,400,000 | ||||||
Period for recognition (in years) | 1 year 10 months 24 days | |||||||
Phantom share units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period (in years) | 4 years | |||||||
Unrecognized compensation expense | 1,000,000 | $ 1,000,000 | ||||||
Period for recognition (in years) | 2 years 6 months | |||||||
Share-based payment arrangement, expense (income) | 100,000 | $ (200,000) | ||||||
Restricted stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares issued for services (in shares) | 23,620 | 11,850 | ||||||
Unrecognized compensation expense | $ 8,300,000 | $ 8,300,000 | ||||||
Period for recognition (in years) | 2 years 4 months 24 days | |||||||
Restricted stock units | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period (in years) | 3 years | |||||||
Restricted stock units | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period (in years) | 4 years | |||||||
Executive Officer | Performance stock units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period (in years) | 3 years | |||||||
Executive Officer | Performance stock units | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting rights, percentage | 0% | |||||||
Executive Officer | Performance stock units | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting rights, percentage | 200% |
Stock-Based Compensation and _4
Stock-Based Compensation and Common Stock - Summary of Information Related to Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Income tax benefit related to stock-based compensation included in net income | $ 864 | $ 1,072 | $ 2,024 | $ 2,320 |
Share-based payment arrangement, expense (income) | 100 | (200) | 100 | (3,100) |
Salaries and benefits | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expensed and capitalized amount | 2,934 | 3,535 | 6,337 | 7,713 |
General and Administrative Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expensed and capitalized amount | $ 203 | $ 405 | $ 1,013 | $ 810 |
Stock-Based Compensation and _5
Stock-Based Compensation and Common Stock - Restricted, Performance, and Phantom Stock Activity (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Restricted stock units | |
Number of Units | |
Beginning balance (in shares) | 728,285 |
Granted (in shares) | 276,227 |
Vested (in shares) | (291,113) |
Forfeited (in shares) | (25,693) |
Ending balance (in shares) | 687,706 |
Weighted- Average Grant-Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 31.97 |
Granted (in dollars per share) | $ / shares | 26.91 |
Vested (in dollars per share) | $ / shares | 31.04 |
Forfeited (in dollars per share) | $ / shares | 31.54 |
Ending balance (in dollars per share) | $ / shares | $ 30.35 |
Performance stock units | |
Number of Units | |
Beginning balance (in shares) | 260,452 |
Granted (in shares) | 103,916 |
Vested (in shares) | (124,743) |
Forfeited (in shares) | 0 |
Ending balance (in shares) | 239,625 |
Weighted- Average Grant-Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 40.02 |
Granted (in dollars per share) | $ / shares | 34.14 |
Vested (in dollars per share) | $ / shares | 31.51 |
Forfeited (in dollars per share) | $ / shares | |
Ending balance (in dollars per share) | $ / shares | $ 41.91 |
Phantom share units | |
Number of Units | |
Beginning balance (in shares) | 321,155 |
Granted (in shares) | 0 |
Vested (in shares) | (115,180) |
Forfeited (in shares) | (18,674) |
Ending balance (in shares) | 187,301 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |||||
Restructuring charges | $ 0 | $ 0 | $ 0 | $ 0 | |
Restructuring accrual, deferred compensation program elimination | $ 3,400,000 |
Restructuring - Restructuring A
Restructuring - Restructuring Accrual (Details) - Employee Related $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Accrual balance at December 31, 2022 | $ 3,422 |
Cash payments | (3,516) |
Exchange rate fluctuations | 94 |
Accrual balance at September 30, 2023 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 23,993 | $ 29,534 | $ 63,697 | $ 92,344 |
Provision for income taxes | $ 9,006 | $ 8,708 | $ 24,142 | $ 28,902 |
Effective income tax rate reconciliation, percent | 37.50% | 29.50% | 37.90% | 31.30% |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | $ 410,646 |
Other comprehensive income before reclassification, net of tax | (3,633) |
Ending balance | 439,148 |
Available-for-Sale Securities | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | (41) |
Other comprehensive income before reclassification, net of tax | 68 |
Ending balance | 27 |
Foreign Currency Translation | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | (4,163) |
Other comprehensive income before reclassification, net of tax | (3,701) |
Ending balance | (7,864) |
Pension | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | 15 |
Other comprehensive income before reclassification, net of tax | 0 |
Ending balance | 15 |
Accumulated Other Comprehensive Income (Loss) | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |
Beginning balance | (4,189) |
Ending balance | $ (7,822) |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 operatingSegment | |
Segment Reporting [Abstract] | |
Number of operating segments | 5 |
Segment Information - Revenue a
Segment Information - Revenue and Operating Income by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue | ||||
Revenue before reimbursements (net revenue) | $ 263,160 | $ 255,185 | $ 773,702 | $ 837,747 |
Reimbursements | 4,736 | 3,086 | 10,090 | 7,170 |
Total revenue | 267,896 | 258,271 | 783,792 | 844,917 |
Operating Income (Loss) [Abstract] | ||||
Operating income (loss) | 22,137 | 28,322 | 53,493 | 92,420 |
Research and Development | (5,560) | (5,400) | (16,746) | (14,347) |
Impairment | 7,246 | |||
Executive Search | Americas | ||||
Operating Income (Loss) [Abstract] | ||||
Impairment | 0 | |||
Executive Search | Europe | ||||
Operating Income (Loss) [Abstract] | ||||
Impairment | 0 | |||
On-Demand Talent | ||||
Operating Income (Loss) [Abstract] | ||||
Impairment | 0 | |||
Heidrick Consulting | ||||
Operating Income (Loss) [Abstract] | ||||
Impairment | 7,246 | |||
Operating Segments | ||||
Operating Income (Loss) [Abstract] | ||||
Operating income (loss) | 41,620 | 47,620 | 111,225 | 147,273 |
Operating Segments | Executive Search | ||||
Revenue | ||||
Revenue before reimbursements (net revenue) | 198,814 | 212,807 | 596,080 | 709,265 |
Operating Income (Loss) [Abstract] | ||||
Operating income (loss) | 50,290 | 49,896 | 140,923 | 152,972 |
Operating Segments | Executive Search | Americas | ||||
Revenue | ||||
Revenue before reimbursements (net revenue) | 132,320 | 143,747 | 398,210 | 482,320 |
Operating Income (Loss) [Abstract] | ||||
Operating income (loss) | 39,285 | 39,741 | 121,128 | 123,842 |
Operating Segments | Executive Search | Europe | ||||
Revenue | ||||
Revenue before reimbursements (net revenue) | 44,606 | 41,141 | 129,104 | 139,017 |
Operating Income (Loss) [Abstract] | ||||
Operating income (loss) | 8,519 | 5,652 | 12,663 | 15,661 |
Operating Segments | Executive Search | Asia Pacific | ||||
Revenue | ||||
Revenue before reimbursements (net revenue) | 21,888 | 27,919 | 68,766 | 87,928 |
Operating Income (Loss) [Abstract] | ||||
Operating income (loss) | 2,486 | 4,503 | 7,132 | 13,469 |
Operating Segments | On-Demand Talent | ||||
Revenue | ||||
Revenue before reimbursements (net revenue) | 41,053 | 23,247 | 111,410 | 68,981 |
Operating Income (Loss) [Abstract] | ||||
Operating income (loss) | (4,595) | (276) | (11,821) | (1,207) |
Operating Segments | Heidrick Consulting | ||||
Revenue | ||||
Revenue before reimbursements (net revenue) | 23,293 | 19,131 | 66,212 | 59,501 |
Operating Income (Loss) [Abstract] | ||||
Operating income (loss) | (4,075) | (2,000) | (17,877) | (4,492) |
Global Operations Support | ||||
Operating Income (Loss) [Abstract] | ||||
Operating income (loss) | $ (13,923) | $ (13,898) | $ (40,986) | $ (40,506) |
Guarantees (Details)
Guarantees (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Guarantees and Product Warranties [Abstract] | |
Guarantor obligations, maximum exposure, undiscounted | $ 4.4 |