HSII - Earnings call transcript Q4 2021 | Heidrick & Struggles International, Inc.

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Operator

Good afternoon. I am Norah, today's conference call operator. Welcome to the Heidrick & Struggles 2021 Fourth Quarter and Fiscal Year End Conference call.

Joining today's call is Company's President and CEO, Krishnan Rajagopalan and Chief Financial Officer, Mark Harris. The company has posted fourth quarter slides on the IR homepage of its website at heidrick.com. to slides see additional you encourage view for the context. Management insight presented that that may additional in note today, we underlying the provide measures Please financial materials management results. non-GAAP refer believe into to between the press in reconciliation be earnings GAAP measures release. financial A may non-GAAP found and Also in in contained making today's release. may management forward-looking ask they language and the Safe please you Harbor remarks, that refer be statements to the press Mr. turn the call over you. now to I'll Rajagopalan,

Krishnan Rajagopalan

financial exceeding consensus macro XXXX. are important delivering for on everyone. and making billion meaningfully Today, our higher we Struggles strategy expectations, transformation you, more exceptional Heidrick journey, profitability, Thank results. Good achieving tailwinds, an our we & operator. afternoon, the it some clear in with along choices announced of net With and been that the milestone than $X revenue we've in with is benefit dramatically

our On-Demand advisory And revenue growth to come segment saw this of number later Heidrick year. significant Our and two, innovative industry intense one $X.X leadership our aggressive value share, number included a Number in of consultant newest four, market digital and Consulting. three from developing million in forward add offering more work Number first made search, an the we enabled as remarkable moves per executive in Talent. expansion XXXX strategic tech XX-month productivity focus XXXX. geographic grew with on scope gain leading an that

opportunities this success. of All us Heidrick’s and excited has for growth about future the

I'll high and some like XXXX. some from On-Demand the share this into which I'd perspectives Our shareholders. in BTG we our business segment, for confidence differentiated with guidance reinforces entered to on with in highlights year Today, transformation quarter quarter delivering Then year Talent the for fourth of acquisition April. record our end last our our ended first a start

than among firm reinforce that of each over is growth its the kind of about lines thereby accelerating perpetuating the others, to multiplier contributing parts. business other, greater thoughts powerfully and this peers, the Heidrick the how to is close with wider end I'll and effect. our handing whole Uniquely of before purposefully our the three and call each focused top and on Finally, Mark, success with making some only the

inclusion, also of well-being but business On end from tremendous their quality the and fairness ways of disruption were and environments opportunity today even for diversity, massive business their the revolutionary imperatives, was in macro capital. the the fund, faced This a a and did war plays, COVID. sustainability in foremost, our sense Heidrick not Companies such important organizations, of teams, year top amplified the primacy all Heidrick. they're the we effective disruption their forever face of XXXX and our lead of organizations, the we world, functioning the at disruptions office changed work, only new terms cultures by poses to scope models. how and and the as for which in our of and capital leadership Around talent, human midst were first the of increasingly the human in

far successful up example, we This At any could extraordinary is live from needed of have other strong responsibility imagine high or professionals basis or an also the and in work a C-suite For from productivity professionals, large where any as an of only on to not would XXXX serve industry never would such empower for to that year's time year and won that based it the transformation. the around number history, project Heidrick, the perseverance, but on-demand organization's digital for be net and including Heidrick our or and our forget or executives headquarters, with X.Xx more result a closed would experienced In develop to that organizations. than clients IPO, interim, hard number ago, corporate leading small, plus a results been model leaders, just factors, putting Heidrick teams revenue and global be our in search, demand at clients two our city figure. searches companies performing footprint, in the world. last executive of expansion a of of our assignments, our

some Here's additional color.

to as top of turnover. saw chain fill to well number of leadership we business and change CFO, First, won including Heidrick for leadership placing the lot was across for roles of XXXXdue CEOs CTO, as different changing an example, C-suite, conditions, organizations a the supply senior executives. these assignments roles. This at in styles, true and impressive

clients Heidrick’s XX% at corporate talent. expect in Last At trajectory at the diverse in and diverse year, of placements XX% to sought total was our placements level, diverse Heidrick’s the Secondly, this directors placement US. board of continue. of tracked we kind the US,

needs transformation continued accelerate, business emerged. sustainability Digital themes across continued, more the business gained of pace to talent top traction, board. the the Third, new for ESG driving transformations like and models and

We expect this to continue.

one, XXXX, For of through top an Canada, future center leadership human acquisition demand is imperative Singapore, environments of from we Heidrick and assessment help and that strategies, serve its of the shaping clients search, matters Heidrick many ways working culture defining we across capital facets Brazil, executive on journeys for and corporate Heidrick and Number for development, recognition by leaders Finland, assessment reflected Australia, Germany, well, Heidrick. where and embedding in the new begin expanded and front as that and specifically primary opportunities areas. assignments in support their teams. footprint UAE. international at as equitable, guidance three success, Consulting and we year were ready Consulting the culture and geographic Last Expanding shaping look find critical of needs with and growing talent strong clients Number we design. also for organization and and in in and had managed inclusive. two, key in companies grew presence Number follow clients aligning in Heidrick three, realign their DE&I to diversity on are our to re-energize work return on

Turning business acquisition on with On-Demand a of segment map Heidrick growing the On-Demand leader as Talent, our got the space. in market now the third BTG, to Talent

our As day On its from many exceeded companies others from of kudos in acquired entity. its on Talent as stumbled But our Not Heidrick making rapidly impact an significant to for and set financial or executive capabilities only BTG independent apart with play our allow the expectations build seamless over whole integration the C-suite business we search high value of own, expanding to team integration Heidrick of revolution. Talent accretive gig will our to but long organization end On-Demand portion anticipate has on and On-Demand the one. it and freelance now a business, the run. the us

Our in executive year. issues, to On-Demand quickly project roles. coming to own Once or survey companies of level our back Talent of work, corporate expertise clients executives business on-demand transformations. power talent helps our recent talent increase the unexpected keep clients plan use in their talent more recognize independent Broadly interim, fill coming to many the XX% senior of specific for sourcing find lend a fill gaps to corporate us transactions either or to or offering, our

shortages continue market provide solutions. available talent demographics are We expect to additional grown. consider the an fill and of talent we The on-demand role impetus the seeing the is to will that on-demand in these

freelancers firms freelancing, XX% are XX postgraduates remarkably, workers a and independent in changing way While trend space of to total executive in XXXX. the firmly by of XX% XX% wave, with increasing wave among the we is positioned ride the its is US Talent workforce to to availability the continue. to large today, companies talent established. Heidrick big in play that work, the be last in It's million sector, is of in the executive On-Demand the global the which This US alone capabilities C-suite with expected projected US and over work year. dramatically are search

creating where combined value. interconnectivity, as business leaders, in uniquely and our new we at Heidrick, assessment cultures, solutions, segment success anticipated, digital segment, we accelerators provide one leads in reinforcing complementary can for drive on can overall the businesses well such and teams lasting performance talent, another is on are working As mutually When we've redoubled.

For Consulting, Consulting Heidrick involved partners Heidrick example, selling at least at were and of one search, XX% principals our in search XXXX, of in support. approximately XX% revenue reciprocally, included

of referrals. edition On-Demand came upcoming its others human entirety, think this each terrific could about from This expanding and innovative from Talent’s the segments and That in digital partnership ready with year, organization stronger Additionally, other. ever is learn XX% the success our overall and talk business for the is success On-Demand business, the Talent about an and collaboration meaningfully capabilities performance, the to making internal a talent so as the Heidrick’s than in greater through greater whole part be effort. to standalone through our a fully each helping Heidrick to of finding be engine drive it which cycle as of of is of like the will adjacencies line apart why value EIGHTFOLD.AI our of We business capital more sets long-term reinforcing Heidrick organization directly later we our much revenue this of sector.

the come executive exciting in in million growth. revenue million and year to and underway shareholders. XXXX our this business are year Talent, $XX we deliberative was to non-search on On-Demand XXXX. Heidrick’s adjacencies non-search than the the and is path has margins. and more still search to of prove culture, business XXXX to just that We total It than $XXX to model showed Struggles us Our likely market look expect still profitability share, in of At faster. the from of Consulting, that outstanding an a Heidrick our up in our metrics expanding approach productivity efficiency gone today the diversification even plus as grow as business, achieving back net net is strategy diversification for seeing doubling same pre note Heidrick to of aggressive success will well more XX% time our firm's We other business is our in do of COVID valuable & continue think to revenues results.

a a ever from as recently technology announced it company Heidrick’s own M&A, first Tracy capital leading I'd new firm most ESG, last late and us such to our today, also our made here significant front, take look Heidrick, impact. brings while own issue from our of of and our Heaton offset first community ESG as carbon comes to Tracy global in diversity firm's addition like the In into year appointment global is our Cecilia to experience. Secretary. sustainability in-depth you'll On to outreach. Cecilia financial industry at I the the from addition Corporate In and report, international C-suite. Officer further online@ results, an our and we firm her our strategy the Chief and Legal Nelson-Hurt, inclusion joins to Officer our brings and deeper and Diversity to commitment in our payments note heidrick.com news also more and proven providing outlining the strides and employee Heidrick strengthen human DE&I brand hope a engagement important report, beauty Chief look at experience us Earlier to leading drive publishing efforts efforts, we

proud share recent cannot from culture of to I maintain this deliver incredibly the largest within. principals in and developing capacity promoted appreciate diversification environment at released These the demand growth and who and our ran Heidrick. exceptional With maiden promoting we strategic principal, solid Heidrick, we XXXX and of what already where enter fast to quality I'm offerings the of today we're colleagues, be amazing Mark. the and years. recently professionalism the here Heidrick, deliberate, strong. with moving services the of tremendous on team to show our partner takes making are that it of continue results to forward. team our named is for of and the run and more agility to and professionals. of at a focus In over on to impact At about that the closing, XX our excited a We terrific XXXX strong results. front we our and outlook I'm future. hard a XX one to pleased talented resiliency in talent individuals in classes house of exceptional foot We

Mark Harris

high given afternoon, our Thank our vision. level you one year-end about accomplishments, fourth earnings Welcome Krishnan. very Good achievements. special spoke everyone. call execution that's the Krishnan today, quarter and to and

that around today. allow to figures some reported context we So with me overlay financial the

me let the our going to behind on Before $X our revenue start revenue drivers several achievement XXXX. billion reinforcing of in by financials,

which our foremost, focus be teams cannot and First driving growth understated. relentless on

increased make all miles the record of key our we and investment added services start line Second, advances cross I'll value we with of products innovation. end clients. our this how coupled this on on into third, with afternoon how deliver comments fourth With and that, Then These for QX our perspective these finish we digital and collaboration run results, we in outlook of are outsize on which into And few the key year our many end year to roll delivered. creation. finally go tied the want a no quarter close to and our have have to results, comments Please some we and led share still ’XX. to and our value continue share items, increases fourth that financial performance team through have incredible through XXXX and a that factors given hope productivity with to where year on be. market shareholder some Heidrick to sheet quarter balance our doubt

that, achievement year three the from billion Heidrick to happy terms our our and of to our be The it. had. verticals record a of we're the To justice XXXX due contribution monumental all all performance being or of setting your take we in revenue part $X done questions. as over work Revenue just results impressive are Following say with of that year not setting, near very to for is record proud we're by just was a teams. end incredible

XX%. a normal our five increased right record But record Historically, this X% recession us just our Every of previous confirmations XX% However, where revenue noticed annum per year-over-year And the our value corporations adjusted margins increase our referred was is for upticks confirmation years. average. by XX% we last over given year. value we in was this a the XXXX grew the on In XXXX Consulting average saw team an compare around growth X% the pre- revenue nothing from COVID, average year. prior basis COVID year When search delivered increased at has were our XXXX we up up our Consulting, XX%, confirmations increased when this we our saw year not special on setting year before by perspective, billings is achievements, to executive annum adjusted revenue was XX shows expand Heidrick per XXXX, increase search XXXX we values of points XX%. revenue put year, that increase beat XXX XX%. EBITDA measurement looking demonstrated before. to search XX%, work over however, our and XX%, than saying Heidrick the client incredible But EBITDA achievement more and increase XX% year. in and XX%,

you're annual for XXXX ahead with we're this per to $X.XX, $X.XX diluted to an our that shareholders, very me shareholder thank much contributions & the and whether for pivotal we turn XXXX, Struggles. in stakeholder, Heidrick client, for let With quarter. a you or employee, record of share earnings everyone you adjusted Congratulations nearly XX% our call, our of to of per so support As on share happy share. now year your

Consulting in near quarter remarkable all as On-Demand revenue future search, of than exciting the continuing XX% record Our truly executive by on Talent, provide. It's our previous year. our will growth, Net time we regions $XXX.X that net and growth the cylinders. cycle, the see fifth higher all driven reached was we're growth was and million, revenue consecutive Heidrick our successful into which guidance an our demonstrating integration of hitting which

business Let prior the year. Search, of some performance three in the fourth In was net insights turning give you on than $XXX.X by me our XX% XXXX, Executive million higher to segments. revenue the quarter

as All practices results growth. per and put all the search XXXX. for our all XX% increase success, The Asia region Looking showed up year-over-year by XX%. grew industrial sector regions XX% Europe was an of $X.X combining million growth year by on the consultant to at and when we in quarter. up XX%. over With regionally productivity in industry was prior boards in that billings Americas compared demonstrated well, geographically astonishing an

As reminder, XXXX before end recession, our in XXXX, just year productivity million the at we $X.X saw consultant. per

pre-COVID post looking $X.X new be hires and regards COVID will fourth norm, believe substantial compared With we've sustainability, productivity However, general what when their between net million, our and from $XX.X become Consulting, of still year. recently modulate the improvement quarter expect ahead prior we in to when the expectations to a million of $X revenue per million announced, up at will factoring rose XXXX. Heidrick consultant promotions levels to XX% which we

As from also bringing Executive On-Demand our Search opportunities while company, well. Talent Krishnan and mentioned, collaboration consulting benefit segment new continues to as to business within the

in and believe momentum leadership the see assessment. Our followed in backlog sets up XX% since ongoing team to board and XXXX. up in nicely quarter and We us Consulting’s the XXXX. Consulting success of greatest more culture December in effectiveness, strength were shaping Heidrick our for areas numbers leadership backlog Heidrick year-end with It's gratifying gains by development

revenues fiscal than when higher of more to wins On-Demand average more previous the has Finally, $XX.X the was saw than basis than year. exceeded fourth XX% XXX% size year with BTG expectations This normal again when large increase we On project increase and to penetration company. than compared project a account standalone XX% year Talent, with regards business million this yet last higher with is quarter. in a

foreseeable coupled achieved will total this growth Given by believe the see the results segment, business we on-demand we already addressable here Heidrick’s for large future. market services with for

setting me expenses. the record and volumes higher with other revenue to the and net expected when quarterly turn variable performance. of With this operating overlaid Now comes with revenue which work a positive naturally costs, and was higher compensation let

quarter. For expense percentage than and of example, year. higher saw and When of fourth quarter prior for quarter the year quarter $XX.X and XXXX million payment at to million This same our general increase Talent we the lower fourth versus we to from resulted one-time In received the in the saw be the in period our expectations, from compared administrative segment million benefit slightly the revenue the initial million the as looking largely earnout year a On-Demand of earnout than the amount $XX.X the outperforming prior at quarter increase we XXXX in $XX.X higher of adjustment more the X.Xx salaries in stemmed should to positively. to consolidated $XXX.X due expenses, the XX% net segment, needed in to of accordingly. XX.X% which is fourth last expectations short,

was up strong expense for after prior in a As percentage the the the was quarter improvement XX.X% net G&A which earnout of quarter. the a over impact, revenue shown backing year XX.X%

saw million was which $XX in with expense the increased year On-Demand Talent. cost the to quarter, services quarter, previous of in due to fourth Finally, compared million $X.X acquisition we the of

trailing long-term this $XX XX.X% of we're quarters, proud $XX.X been million compared basis margin reminder, million, XXX We XX% consolidated of points our a in This margins fourth XX-month to twice high, in net of over of of $XX.X the operating in our that quarter, and adjusted operating margin adjusted to we adjusted increase of XX expanding adjusted is is for COVID, payments last from prior an of million over of fourth due achievement than in per with year. to have the adjusted As at consultants full finished at the look XX.X%, a fourth previous million last that the and EBITDA since who adjusted of $X.XX, previous building XX.X% more the margins of disruption margin, in to and of trend leading of XXXX, $XX.X to of to an timeframe, seeing project the $XX.X year's steadily quarter, we're when Talent. up tax We're previous EBITDA all-time very interim expanding from XX.X% quarter which our income adjusted or earnings our expense On-Demand at XXXX, except rate XXXX, the what year's income with Heidrick. pleased EBITDA when work an an year where of diluted the we quarter like in is quarter. perform effective $X.XX translated very XX%. We share up million, quarter to increase EBITDA adjusted an of report

cash same dollars balance cash of we $XXX.X $XXX quarter equivalents and million, sheet time than ended December XX, more On the at is year. and marketable over with last the securities the million which

accrued. bonuses the along as we've company's discussed through related Employee associated quarter build paid their the and first out before typically bonuses year with As cash in tax position costs. are the employee are

with and investment balance expanded again, coupled Our another ended million for continued sheet future to which growth. Heidrick. year credit facility of of Heidrick flexibility with have the meet the renewed our record our was liquidity, we shows $XXX and objective strength to $XXX million nearly We pursue

be believe for entering Heidrick first our me into our projected million, XXXX momentum to turn which will we new would up tailwind and in record solid of net still productivity first set the given we're range with strong the supporting so marketplace, effective efforts guidance, the be volumes Heidrick in $XXX the the first let and seeing revenue far to quarter quarter continued and Now the $XXX quarter the a million macro year.

strong year half entire & However, I this level could second conclude we XXXX Struggles. sustain would the anticipate executive But search. be for a still in the year that to moderation we irrespective Heidrick of cautious as this be expect to some in for

of would Talent ensure are cycle plotting valued that events unforeseen the best of very matures, have monitor view global We call Talent we're business our the to market high proper on this unforeseen our same using sum reminded and an trend aggregate. Consulting in low other On-Demand impacted team way to investment and the challenge. be these pleased believe a other Please always quarterly and diversified point With to with the inflation adjusted continue as peers regards our This adjusted to consulting segment be as EPS in mind missed next is valued the is central value at businesses, in EPS. evaluation, any at Talent due On-Demand are on that Heidrick our this lifecycles. accurately those and value while market on with and those negative In the compression by Executive we'll growth hydric outset, by developments April. Search hydro management why any course metrics until EBITDA reflect inflation, is insights performance. a noted more Krishnan keep margin I revenue in through multiple banks, and in method foundational namely conflicts guidance be On-Demand EBITDA this and the our initiatives of including our shifts strategy course, the our conclusion, parts and more in adjusted situations please multiples Of to that we're would can Heidrick responses their wage will as

into We've year-over-year been the On-Demand in through creation. our growth value search core to We are flexibility strategy also areas which with strategic expanding initiatives further growth, have shown and our our delivering is providing turn in diversified and future acquisition. successfully implementing businesses, consulting Talent against our across us tremendous while needed invest

are happy all about that, strong early and still investing With our I the Heidrick’s new more we EIGHTFOLD.AI, and digital we for this it's success. are these while take a capabilities a creating excited which bringing questions. partnership your initiatives And in with in, days year. addition we'll springboard together share later continuous that Krishnan on driving cycle. be continued would virtuous We're to In

Operator

the Instructions] comes of with [Operator Sommer from Your Securities. question Truist Tobey line first

Tobey Sommer

cost from may you start how And second, they color increase of one digital markets? points? delivery approach or some vantage your addressable service to how the become the First, around technology your as that's more Like goals two may efficient off, you. Thank well. could total of enabled if offer

Krishnan Rajagopalan

Krishnan. is this hi, Tobey, Yes,

the our digital are So let got productivity our on seeing conduct and me already speak that platforms we search, the to to we've place that of in that impact ability.

So we've result we And putting kind XXXX, that. that the seen of started as seen XXXX. a lists that in productivity you've of

So we continue to push on that.

well. technology the we're different other That's others them that see there And digital us for There's platforms, intelligence, is artificial that machine very working the as platforms O products search in to and beyond thing A bringing to technology we're doing learning, larger we addressable E us table. more on D on market T those see on the for that very, the to is work impact likely that. where going where positive . of a and a Talent enable well, with will market, On-Demand in as so L on we're addressable of the invest the to I H opportunities the lots well, with for and opportunities I, continue F to as G

Tobey Sommer

the I what could How point think put record to their years. adjacent profile that the do kind revenue would are well the and of space like performance in share of leverage and you margin businesses in or things company at because and many in three stocks in and two be Thanks. helpful trying long-term we can context as at about think about the company, looking the look at anything investors this

Mark Harris

how the today, maintain of executive try you, region. search, three have about we more for talked us to we've we're kind it expect I'll talk in we businesses take Americas what let's one seeing break about the Tobey. granularly. core that would the to I that can so right, down in mean, Sure, we But

Europe, scale, to in get achieved, in And basis. up mid-teens, well Asia margin as XX% obviously, Pacific, XX%, that's we So would that again, get which we expect into as as XXXX. we

always search margin overall business. maintain will again, I that, overall minus or plus So executive think XX%

we in scale business scale when Talent, as there they're around think still of term continue state, achieve. and XX% growth lifecycle. steady Consulting, type X% come to much a we've is albeit in we be I into have continue you're to high time margin again, seen beginning would Heidrick very that On-Demand we those that, that to able on a again, margin to asking we I XX% and expect that between see of the XXXX, talked XX%, what business. for model as or their improvement in look, threshold. they XXXX that we that growth tight Margins compressed as and up expect normally scale of a that will some part in take margins we about And trend say long once would to what the about we've obviously business would and their well,

So least think in what much that and in pie. at XX% XX% market XX%, able cadence, to showing bigger the a I strongly would that on put be but have to today, us what still we of still we're

again, all I really think or about is I that's leverage what which demonstrated means able what's up equity we $X.XX without the us XXXX scale you in come quite down. part as significant from, it that through nice EPS important the bigger the do peak it of way so one we to was finished $X.XX to where it old allowing mark. kind in of market fall infusion, the should to can doing at be that's achieve And nicely the that think going really see

I we in run up in the nice and drive in insights. that's of it changes Krishnan those trying margin to of how our talked can capital human what really how see terms side and cyclical book would you to online, we that's of diversified less the come on is when downs create about markets, give constant, and the of businesses, think want course, really But it new that the So businesses profile kind of I as better

Tobey Sommer

has me, back kind for more quarters, two I Okay, and six the but given know and What productivity around you've thoughts queue. that kind get settles are of last I'll the that settling of marker, in you've your higher. a occurs? consultant measure inched over four, in when where

Thanks. bonuses. you looks once could So us you a what have changes there. out secondly, give like, I any you if net spendable was sense wondering if cash for And pay

Krishnan Rajagopalan

new continue let the finish well. Why with we productivity historic Yes. as from and me to expand, our from on we're levels, you'll we're hire inching will about with X.X. got with and productivity we haven't over see continue that we drive larger move added Look, up well. We continue we to to a base. you can where start to over our able And to drive be X.X, time, of you that to XXXX, remember, to that technology, where to to that X.X to we continue we and I up you Mark, don’t go between drive going can we're teams, much within, see to think productivity. if back consultants then somewhere going that, level probably is leverage, this we support and and significant off mean, how a we as towards revenue hire add think

to infusion, until may get So that we of see the the see be kind of between and predicting we something to additional X.X. think able technology where But we that's I I we're kind X.X going. with higher. number mean,

Mark Harris

this I you answer in a Tobey, for did slide And put question time. second to your

business constraints, So on And our XX, you slide the on got out then cash if you'll we've see going total deck, and other capital payments currency of $XXX.X. investor operations, bonus working will. via

move it's from sometimes different As to around hard cash jurisdictions.

about $XX.X those finished million discretionary payments. cash with So after we

Operator

the comes Your of Barrington Steinke from with Kevin line next Research. question

Kevin Steinke

Hey, good afternoon.

to that the that's to place You drive I that? across do you structure how have highlighted to efforts Or your collaborating collaboration kind to drive and collaboration have in what's helping of happen? make revenue, try mean, segments. you incentives

Krishnan Rajagopalan

from got an collaboration to Yes. businesses. the between various in good that to drive plans as place you We've incentive well. Kevin, hear

is to that of So lot a Each the consultants operates. do we, we also of as where clear accounts. how on it's planning rather joint our

Okay, the we where and so between how we to want want two, target to operate. know we

last easier for So seamless, our we've in to XX-months. of sort simplified field make it's well. the benefits system the the collaboration we're seeing incentive of it as for that And

Kevin Steinke

that Mark moderation as that bit thinking you lot forward? I of mentioned of it a how in And we're going of so, if you half pace second in in at XXXX? XXXX. mean, about I of is referenced? organizations kind maybe less change is why change a do of in Okay, happening the a search the and sustainable top view mean,

Krishnan Rajagopalan

Yes, that’s question. Yes. fair a

the are look, fully XXX slogans the so our say. be a look even going talk out, That's an industry proverbial level transformation, is first So a this, right sustainability It in why we hour. seen still and seen we've that isn't hour of But at. themes miles I look, it's would in the There's I only It I we digital backwards and having for change have continues of momentum. DE&I, before. And all to really There's per If is about quarter is expect guidance our frenzy impact. there's where that now. terrific, beginning now been we're miles the and to out amazing. I lots have having market, while running much. it's an moderation, XX-XX XXXX, in lot of look what there that when has just seen still right been

things private is in there flush. many rather many, new So are businesses, equity still

lots this. any to service will clients. and there's of for work to with time. with play able to well the continue as have that's you digest in that be and to us, things relationships come of cycles where the those you drive take And hire, got other once we've as those So But to you offerings have really these continue that

Kevin Steinke

in up goals opportunities businesses and scale? On-Demand both about challenges timeframe? Consulting, Okay, to talked and both talk kind think about strategic target scale you these there to three talk a Talent we we and great. do your margin some yes, the we ranges. about when And in about margin Can year like you kind thinking segment the are to And five it Heidrick you those your those of about greater driving how Or think businesses when of targets of roadmap?

Krishnan Rajagopalan

Mark Yes, me margin. that, then so some with of back on additional some thoughts can take come least let at and

growing got is looking we've great think position. brand, the personally, market, for at on-demand a challenges, I So to got look, preeminent a a a second. great we've there's But

to this well. obviously something, internationally, build got on. we've build are to There opportunities as So

to regarding very single so opportunity want the lever, we to But Our be conversations that grow do Consulting, there's those over massive at level, every will to make those again, So Heidrick How we be that there sure we're for I to fit. that. day into some having think future that onboard us us it DE&I continue continue they're developing to can focus, we're looked some there partners and culture, we and come at sort who talent to talent come of but those talent, for a doubling it that, down think well bit? areas, will each leaders, and side of to ready that'll the that and there. talk push the very, carefully to have will do those segments? will want partners, little a to Mark, on to organically help inorganically, us Can well, or you right do drive as focus margins working being opportunity able be really on over to

Mark Harris

Sure.

a we drop plus COVID, wasn't a done X% job, really trajectory, terrible, then was XXX job, I - how really demonstrate kind team's the heroic were on of little a the able old addressable school our there, going and strong us like cycle, that come a school executing think some I we different all of to see come pivot. me, side view and Consulting the I being Krishnan type really always is the margins of out real through watch to. into is and that as in XXX in come And coming it. a then Consulting made team get of continuing good full And itself $XX there that the those see it's revenue. of want On-Demand which because to a just to the good and it. actually Kevin, back side Heidrick the would with the of So the Heidrick always million again, we equivalent side scale it. to to into think high to where for some that off terms the in. a interesting the nicely, really people categories about number. really that incremental versus being to I'm revenue excuse It's market on difficult see flawlessly. around going we'd be is million, in grow set that timing, And margin speak quite hard breakeven be gain you back time of trends. platform, We our of of they're that bit, growth revenue building it's terrific starting some side the of always can a about platform, But references start is, equation scale million take market that it, talked and in is Talent function $XX margins, about through, to where

would got down. really again, then those investment imagine what the comes when is of would where that's this adjacent margins we'll we've of they And But contagion of that I think and where I every of in seeing the plus has I think out, because human sure a can of So we're business, are type part public companies market starts qualify making, that it going. that continue which of similar we're the significantly, real in numbers same I exact excites into kind be now see really think that out. capital fiber, team that slow and business types one, side opportunity. kind putting see at. it reinvesting see side the of us, taking great doing we're Europe back I start COVID we everybody's opportunity, dollar into you of the and say would market dollar business those is again, everybody the where type reinvestment right when the about to that be we're Asia of especially plateaus that and certainly, the kind with making upwards us, potentially, quite and changed Pacific, again, a just rewarding it, can And what the we'll as really like with million this we where very to to see of But moving for platform, itself and thing go $XXX else when up grow the every growth to to

of really in what by good excited of and has us. it. a we're it's So front We're part it

Kevin Steinke

you your Okay, promote on managing a as how through develop offset that people the great. compensation challenge are to you forward? affecting just to compensation thinking or going business about in view or a and side that the of any And way thoughts inflation ability you going on business see meaningful is your How as kind internally inflation forward?

Krishnan Rajagopalan

that Yes, businesses ours is great so look, as clearly, in a occurs well. like talent for there war

as opportunities, we We some built competitively. this increases we So new believe we're as as including year, of place, this nice got bonuses, our as fairly, we And collaboration, pay the think career creating compensation well compensation. people in of people, on including some opportunities very closure we benchmark which all compensate we've us very top of well mechanisms in near the heap. different for allow to kinds

over thing there. single every at look to continue we So

I got classes, of tremendous what about promotion just did. And and offer answers. people as to But rest our talked we we've don't definitely we've got opportunity I easy lots got career things the So that we think thinking we've all at. I think I looking well. are

there's we career got platforms We've at as multiple wonderful opportunities here got, that Heidrick. well. now So

will So to well. it's advisor. run a perfect leadership that teams our place And that be a as hope towards we

Kevin Steinke

to All moderate, think to as going XXXX. you that And how an something through assume kind course, would forward? I or just of that's beneficial thinking to is you number I that that higher about starts that guess of you initially that's maybe you I I flows XX% you upticks, of levels suppose, But for think how in kind just well. extraordinary get want up right, lastly, I ask about normalize, and mentioned compensation set maybe

Krishnan Rajagopalan

saw little think I aspects, one we Europe and than more terms stronger a go you stemming bit probably in reflective, definitely couple in we of saw that's it it cost the it's lot what was value, then fill historical going in And bidding the on an this, different people what in yes, you which a Pacific So, of we achievement, it, of Kevin, especially the the like with assumption you're in imagine, a I'm side sure market of to saw Asia side more typically that's what right. of much a I number, original think the kind in American terms of And seeing, to is of can and mix. higher Number a a really, talent price, higher. the to of up then And to actually we that's that person on of kind comment. same what cost that uptick is see get it's the for driving realization going board role. from,

using it's So where math we just on we starts Turns out, we thought a everybody $XXX, and that's I person to $XXX, think can work through. fictitious again, $XX have uptick board. get the

by would And strong. in a more four. coming that gave, But though not that. and for of think gave of always be is very I on that obviously, of going to expect be where So will out saying kind that. to And Yes, the heck for it's is saying, outlook, number not be. equilibrium. wild. just bit up kind And demand, look, in guidance in very, as mean I I would this, supply suspect that and a and would it's bit would are probably gave there embedded I quarter the in well search, I expect modulate I executive function not the bit, a it's it was a year normalize that I still I as that a think market XXXX. I especially just to of of saw going the does a that's moderate we're that guidance even at to take hope demand we're the fact the don't it the multiply that it clearly us that supply on

work because difficult uptick that just you is trying one it's what I variable But give another and had decision hit see. that really to see the quantifiable especially really as as is curveball our it a trigger to client to you predict when either to we're try we'll So budget. or to numbers, if know, just the at a think makes until the relook crazy uptick make what really to know get the pulled and the the and that's -- way there's person was to it's about, because guidance doing don't they step within up

Operator

question follow line Truist up You Tobey have of Sommer from Securities. with the a

Tobey Sommer

you. Thank

Just or thinking How able different remote addressable the financially? are acceptance? a company from of to is per and that your that work market given few executives the What being impact does average more. impact you either your on recruit fee market search it in geographies,

Krishnan Rajagopalan

but Yes, which talent, availability one, that about the it increases actually I it think increases searches might it phenomena a on. know does the can market, speed, couple number if the we execute of things increase don't I

those the I helps are So think him. that dimensions it

by business, the I way. think On-Demand it helps our Talent

where excited able their Okay, be of regions. to even geographies, outside particular in talent to access their are people

think that business it I as helps well. So

Tobey Sommer

In sized sort from is your able and -- other large if are give of pools cities? for talent that what and higher it's deeper have fee cities us talent you of been medium recruiting to average larger you've sense the way around seen it so a recruiting markets smaller prices? Because can impact. I far, Or from discern markets typically maybe have more secondary talent the

Krishnan Rajagopalan

migrated wherever where have to think at about just think as, we don't way. like think that they I Yes, don't sort that. it's people I think And stage. operate, talent think of may about it I the this it

Okay.

that search, with. work offer competitive going sure that think companies the average conclusion draw they're on for fee not I to be we that the going So the to I is I'm highly can the compensation individual per

going of matter them kind that So they no where come paying be to they're from, money.

Tobey Sommer

a Okay. a side search retirement business the Do in the executive for specifically? sense as you have in driver

Krishnan Rajagopalan

a we bit look, to felt a wanted more to think I more Yes, People in teams. still saw COVID we XXXX. occurring started, stabilization. as And there were definitely XXXX with though who ready getting was in their XXXX, XXXX, pandemic did that retire, we than in stay overall,

how of will So And how teams maybe at that trying working of comfortable small of work those want to virtual to think way to lead wave not. being to driven people it well, in to lead to now period, environments drive a that way. And occurred as some and or retirements way will as don't are be future that of be by we as retirements I that okay, and there they continue that work clearly time work I I and some elect was suited will occur, people the retirements that our I'm lead not say, think well.

the continue to same so we you'll see at And levels have.

Tobey Sommer

Thanks question. and small one just is last kind a of detail

markets So are that I think company's to sort could and a it's sanctions. the quantify in under exposure. the exposure pretty recently immaterial news But you of the

Krishnan Rajagopalan

as rightly spot business Russia's for Tobey, about million on, Russia a us. $X.X And you revenue business

material, has So operations. Ukraine we very Poland have our don't team have operations, out job doing been have just cetera. it's We over and do not don't hopping et And magnificent we Poland Belarus, a there.

us being of updates. And just the charge by lot team have markets members, an of it's growth we're from getting Italy, In sides what's also in of giving terms our we of that that's all in going on, reports led in our side extraordinary of it a business. person

our So of our impact we this team got it. for leaning on impacts financials, our is we've that buttoned and made situated sure any material stay on really and don't the financials, all in all really expect we've treasuries long on up at the overall,

guess, can I be well nice it, is to difficult say it's going as expected So way a though, as overall, situation. one in

Operator

it Q&A for And does Rajagopalan to session. tonight's gentlemen, that hand conclude remarks. and I'll Ladies Mr. back closing

Krishnan Rajagopalan

our joining for today. call you Thank

our within working vision results Heidrick again to growth to the of we forward look value you. Thank to do that hard clearly, h to updating strategic clients, and continue the outlined. that and Heidrick We the outstanding, and So quarter in to we're announced forward got catching all today you look we've and were the shareholders employees framework to next deliver up.

Operator

conference you participating. concludes call. This for today's Thank

disconnect. may now You

Heidrick & Struggles International (HSII) 1 Mar 222021 Q4 Earnings call transcript