HSII - Earnings call transcript Q1 2022 | Heidrick & Struggles International, Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Heidrick & Struggles Q1 2022 Earnings Conference Call.

Just a reminder, today's call is being recorded. At the end of today's prepared remarks, we will have a question-and-answer session [Operator Instructions] And, I would like to turn things over to Suzanne Rosenberg, Vice President, Investor Relations.

Suzanne Rosenberg

Thank you and welcome to our 2022 first quarter conference call. Also on today's call is our President and CEO Krishnan Rajagopalan; and Chief Financial Officer, Mark Harris. quarter heidrick.com the to and slides additional first our homepage view our for at website we context. posted slides IR on of these We encourage you refer materials provide believe insight into today, the that additional in results. that financial measures note we Please may to underlying non-GAAP we presented financial GAAP found may in the reconciliation between measures A earnings and non-GAAP be press release. our forward-looking statements. certain we make may remarks, Also in the Safe press ask Harbor also We refer that today's please contained release. to you in language Krishnan. over to call I'll the now you. turn

Krishnan Rajagopalan

Suzanne. you. Thank

Before pause I on sentiments results to begin between my prepared our take our continuing and remarks to wanted Russia a outlook, and about share in I the conflict moment Ukraine. to order

includes Heidrick As serve we the to ceased no any has Russian and headquartered This war longer condemned a clients. continuing our firm, have Russia. operations in

comfort. global help a their and offering ones As support provide we their to secure colleagues, safety resources team, to been clients, our provide who impacted to have loved continue and

to assistance Our further also providing we where when continue to do to Ukraine of we firm and and so. contributing the support able provide people to will is organizations are humanitarian

on strategic to our progress. Heidrick's Moving performance and

and on and differentiated trajectory happy top-end from organically long segment, We the touch and highlights quarter run. some critical to the of success capital expanding on product executive the for our be on bit development. talent search position industries business over about productivity high is then human our leadership, to and business, a like strategic across and that from first focus the growth Consulting, of work Heidrick digital marketplace mix unique three deliver, our advisory I'd diversification First, our inorganically on-demand track briefly research targeted share businesses. in exceptional The We're our as of anticipated. talk and Heidrick's strategy geographies. unfolding and we its talent, I'll with needs the

and for I'll like tremendous but say a Mark, perpetuating the success how the than first call decision-making three its that change our growth greater back fast-moving this effect before in to business of change through increases at before. navigating and it of ever navigating priorities, speed leadership as of than scopes shifting the faster of larger crises, where velocity leadership constantly and agility. exponentially. it season a greater More leaders moment, incredibly clients over our exciting of increased time get more, for world. Finally, emerge expected close to and is I'd more here is of is places, responsibilities for to lines complex others the is the each call Heidrick, reinforce about and more and with stepping the in value a of job uncertain whole company. it's companies macro around the CEOs a handing contribute at as the a of accountability more time powerfully getting pandemic Boards the an addressing multiplier with to with thoughts I zones making from across stake for and and our thereby more of right much and Boards time tougher level, On parts of purposefully and more larger are issues is

able has and with and for achievement. clients, the than productivity to As watermark to geographic our delivered Heidrick we services, a proud more. was the quarterly of just front to how these how believe of of Heidrick. out gratifying of the set business the asked been nearly that's imperatives and region meet share exceptional to and on footprint outstanding clients of record than every market of it's we last Heidrick every to an Expanding in build a on products new is per I'm XXX QX, of achieved team quarter. efficiencies business inviting trailing the more continue Also challenges was confirmation gain suite them, miles them the delivering for with our new XX-month is Search the center be revenue and and in a XXXX from had year, absolute largest $XXX confirmation higher We're revenue near-term year-over-year, our quarter its Search, consolidated the net first best record quarter, hour of announced $XXX We in XX% first in Executive quarter net exceeding quarter company's and running results Executive with last expectations. report continue our quarter a high and which for acumen. terms $X.X volume higher out million, Consulting. across Executive our history exceptional remarkable tremendous XX% of million on history at team our company shareholders, still of higher in our second-highest practice. high we share outlook. contributor to million the for Search our excellent the our XX% Today This our previous for strengthening priority to

For example, like who Tokyo, footprint. and international Amsterdam, London. and Mexico team announced several growing Paulo, principles markets Stockholm, including just the we our Dubai, Heidrick in We City, partners new joined Sao executive search global

year. assessment, value-added development. of while revenue performed Heidrick and work backlog an had also of record the this than the was grew in $XX Heidrick for impressive business to stats. higher critical its delivered setting shaping, Consulting segment the net by million a Heidrick record the highest Consulting revenue, ever first especially another in This last in quarter XX% milestone We new quarter, with wins, Turning Consulting. leadership leadership advisory leadership quarter culture areas

easy talent. quarter On-Demand revenue year. dollars, for share quality year, segment the clear interim colleagues Talent work our Take On-Demand of during From clients from of company's more relatively securing the work Heidrick Our an the last than interim first on-demand. and value Interim also majority Talent part $XX million is case It's of in we energy made adjacency in type With success. work the need market Consulting or our represents newest higher XXXX benefit per of in quarter. CIO, projects Heidrick an of executive Project-based our are are last example XX% incredible than impressive we leader significant it's CFO seeing an acquisition high-end important of this but of se the add understand to talent, company. our performed the a we project do business major on-demand to

and and delivered client, management. leaders strategy company's Heidrick's program this this On-Demand reduction a to supply chain for of merger, need changes optimization, opportunities, seasoned these renegotiate four to the work the major expert experts cost optimization consultants it's through manager reduction chain development to and faced the a network implementation streams to our this corporate Talent in consultant global win-win our program independent procurement, for Group four logistics identify Talent shareholders. contracts, a just cost transformation business, for successful sort a completion, a high-value Heidrick and Following clients, and distinct On-Demand supply of combination creates expert, to that lead

segment's share that Consulting the our to still by last in a of just While April remarkable of on-demand Heidrick our the impressive one fact of Search referred Executive like topic I'd from on our of QX colleagues. year to the acquisition and talent year, overall in XX% BTG was revenue business

foreseeable talent rate will we run million. the $XX noteworthy of We see more on-demand believe here than Our is segment revenue for now growth on future. annual a

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

Following for our our our record shareholders. these quarter guidance in for second results, our delivering record strategy QX in a confidence reinforces and

valuable more and today & we Heidrick Our total Struggles is our adjacencies to XX% even our Talent expect faster. than approach come are we path and the do of Consulting, revenue growth shareholders. to are our think notable to other business business non-search underway continue the at We of still grow diversification likely still at Heidrick Search time to strategy our will the same model diversification results, on net a of this On-Demand seeing Executive businesses to prove

mobility analytics, for and learning. think planning to marketplace our product share be problems we've by given first unique here innovative will utilizing of, associated in digital that products in invest succession development at areas and the AI Heidrick, the with quarter, development Mark As moment, a the expense machine defined we've in of data visibility in starting and example, research we solved latest digital

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Mark Harris

Thank Thank you, our quarter call. first Krishnan, afternoon, and good for XXXX everyone. earnings joining you

regions. yet growth by As of our a another terms and quarter, top-line record-setting in in Krishnan three businesses revenue we've row all noted delivered quarter all fifth record delivered

all Just a this quarter in consolidated as also on basis set key records profitability underlying measurements. importantly

As Heidrick astonishing my high-level to our hard strong to work, you remarks from continued achievements, them. execution, will our moreover, see. about are Krishnan spoke & vision. for at Struggles you flawlessly remain accomplishments within Thank markets our your executing prepared teams are their and hear and everyone

So sheet allow first a make reported that I'll few today. figures, context we items, our and of results, a financial second-quarter balance me run-through on the some outlook. with comments overlay quarter share to our financial around start with

Lastly, I on perspectives business the with particularly given valuing will transformation of close our model. important Heidrick some

the in expansion Consulting. sale and and talent Net quarter and from year, driven a the net our was view XX% higher a than prior which taking you'll revenue was the on consolidated which basis see a record in reached regions $XXX.X in continued own. platform, of growth million, Just was of of impressive Executive an Search, practices all by execution revenue Heidrick its and our on-demand assignments growth

more on million Search, For In turn business in Executive the the of quarter segments. XX% than performance, year. net let's color three first was our revenue to prior higher XXXX, the $XXX.X in

Looking of will the range million. is million XXXX we exceeded productivity productivity has Trailing our and XX% we per from outsized enhancements practices and comment of over the as company. the industrial net geographically, and to even changes growth regions of Europe XX% year on our the standalone XX% digital to in demonstrated region expectations revenue growth in again run quarter, rate $X the do than XX%. Americas in the $XX client Asia in the With higher well gaining year's when annualized market and Talent productivity million per process sector a higher and $X.X consultant believe search higher results, the months million a industry $X.X increase quarter. trailing was revenue impressively trailing was clear All we in than This which million combining first On-Demand in market search XX% million BTG for up a XX% grew of quarter, billings was prior a is last by XX reiterate our share. of compared leader X.X with up all an modulate the due in prior $X.X yet business Talent by all to was America level this range was mainly year. year plays consultant. in compared regional when business pre-COVID first an put search per consultant quarter, at XX-month that $XXX,XXX quarter be last year-over-year first approximately to revenue between still last high and a for over XX-month productivity long watermark Heidrick remarkable $XX.X of per At On-Demand success On-Demand XX%, run showed increase high-end than within the To our North appears talent metric the board

million, compared quarter to Heidrick quarter. net rose their year the up $XX.X revenue to prior Regarding Consulting first XX%

continues the the As Krishnan business to mentioned Consulting new Heidrick company Executive all benefit opportunities from for also as like and well. while segment X Search to segments, bringing collaboration On-Demand within talent

in strong gains year. this culture quarter up leadership compared to with of assessment the Heidrick backlog greatest very were the believe We Our Consulting XX% in continues the leadership development. to nicely shaping followed set has momentum areas be and to up quarter prior continues Heidrick build. first for Consulting's and them year by

million our with which to revenue Now revenue net With was this expenses. prior turn operating at quarter, period example, $XXX.X other lower in positive of we a of net first naturally performance, the saw compensation and somewhat in variable last XX% quarter the expected up but year. a versus as let's same expense work with XX% XXXX volumes for in than and costs, benefit and year, higher salary quarter comes of revenue record-setting higher the for overlaid the XX% percentage higher and consolidated

While systemic we the XXXX. quarter. administrative our gains, on to saw scale to revenue general to that through increase pertaining prior-year driven this with by the a but When in would a at bonus move temper expectation we be looking $XX.X getting Search accruals are war continue expenses, Executive in in million the these increases the will talent modest $XX.X first million were as compared we quarter pressure

net $X of XX.X% solid was travel shown G&A upcoming to of were of XX.X% Most the are which in years quarter million not a over Conference the was other the the expense in revenue prior-year percentage for so some second the the and of due expense an May G&A increase expect which COVID in a expenses quarter, the million. expenses around quarter. related $X.X As added have under Global to improvement we increase three

previous Turning an to the saw $X.X business. Talent $XX the compared to quarter which mostly we was the quarter, of million On-Demand with in cost increase of services to acquisition in first due our million

high-level On-Demand we this revenue perform to cost of is is so consultants As the services. who independent payments project a line of as and thus interim which as continues reminder, item a expense Talent and grow revenue where percentage work to

development, XXXX, this item and of that associated earlier, the quarter development a new quarter is As on. showed digital new on X.X% costs the $X.X of Krishnan noted We category working for Heidrick product research we with net of expense, million which revenue. representing captures logged line this first

accordance first higher you operating the XX.X% on comparable note, expect grow for generally That margin principles. margin year, $XX.X with would basis. to margin, expansion to and million and upon a R&D be income income will to million income to XXX market. We margin a the operating quarter, operating income as margin operating a the accounting $XX.X capitalization more and run XX% million, next annual in time see just product of We're into like-for-like in income in to When introduction months in previous this points $XX compared modestly XXXX operating will XX.X%. XX.X% and basis XX% over around a the and of our several QX with accounting capitalization some increase prior than expense to million rate the amortize operating accepted report $XX.X of over pleased

quarter R&D when and quarter and adjusted EBITDA margins. margin $XX.X of quarter. generated business again previous Speaking was adjusted EBITDA is and $XX.X of growth given net effective accounting that, business to XXXX. margin quarter profit of in was $XX.X all will of leading and trade benefit of diluted revenue the expect margin $XX.X adjusted XXXX comparable gains their our and compared Talent low per million $X.XX. a of we finished the EBITDA million On-Demand first of XX.X% EBITDA good and EBITDA the the with share XX.X% income EBITDA as the the slightly core in metrics adjusted earnings to cycle, X.X% tax prior-year margin adjusted EBIT high compression first in our for We of XX.X%, very pleased remind which margin XX.X% with our year's $XX.X EBITDA growth during is in million by be which to and the EBITDA I'm million million compares verticals rate was lower a

expenses, earnings higher which XX% diluted to However, of core quarter. and share $X.XX make expectations. consistent surpassing is the R&D very net demonstrates business and $XX.X was million well income by is XX% and prior-year This respectively our from performing with our per

XX, March the at million, $XX quarter sheet of same which more ended is than equivalents cash million with balance $XXX cash we year. time last the On and the almost at

As typically discussed are their year first costs. out as and we builds approved, employee bonuses associated tax employee the bonuses with the paid position cash the before, are Company's related along in quarter

balance our coupled $XXX Our organic growth. and We quarter to and million and flexibility the should meet renewed for sheet strength and objectives significant powder our investment with of expanded $XXX continued the million credit have dry of facility Heidrick inorganic ended with future nearly giving liquidity growth. Heidrick pursue

our Now me XXXX turn to quarter let second guidance.

chain we XXXX. project Search growth the Executive unanticipated our for our for On-Demand so be central challenges. further by strong expectations the coupled This from momentum banks, and quarter in quarterly by million. volumes half and can $XXX establishing first net supply while continued the to conflicts, revenue range continued seeing impacted record escalating of responses far reminded Please and $XXX Heidrick inflation million guidance would be the solid be both a deepening global be we believe effective business Talent with will our are Heidrick and Consulting of second productivity, Given

situations, course long-term and best we're to that agile any the For this and through monitor team management ensure will continue challenge.

quarter, and our spoke last concluding that in value Search core Before namely Heidrick Executive Consulting. our I drivers about business,

adjusted EPS when but Our historical valued business severely using and on undervalued. these multiples, will has be methods been adjusted EBITDA On-Demand business our

example, the of given used business first quarter revenue. of annualized For million on-demand one X.X and Heidrick's using revenue EBITDA a multiples. $XX The of we'd multiple our market times $X On-Demand annual for value - generating see between for of today in times around of approximately million $X.X methodology two our million value companies XXXX, EBITDA and a

that liquidity on-demand evaluation of of creates methods diversified the thus cycles our view full million. In way the until the parts this sum On-Demand Given short, talent We matures of and million. the to as market more gap in value their businesses. reinvestment this of proper around valuation is strategy accurately believe difference capture method a put would our will $XXX growth $XXX valuation the

products still day. while in the to of many and the me both Let deliver differentiated to line services, with vision, to of our to clients our miles Heidrick and quality conclude, the strategic very finish and long-term we're proud each to continue expects we're go race every

As year-over-year we're ago delivering I've your has embarked against strategy growth. with shown the we would I happy and be Krishnan and to tremendous performance are questions. years take several With successfully very noted, Krishnan our diversified upon we and pleased that

Operator

[Operator Instructions] question Sidoti. with our Mr. afternoon Riddick from first this Marc We'll take

Marc Riddick

the it, referrals it of might or with revenue that questions should to to to was a those with wanted think that So of the there like. and more on start where you Can maybe, the little came similar couple about was saw there? color what that you give industry of progress a the as look what mix or some might I of it pace how referrals from maybe what with verticals there just and we made maybe sort and

Krishnan Rajagopalan

the number in and parts middle the we're had between Heidrick getting are expanded core talking and referrals On-Demand. Look, of or of On-Demand you last early to a it's you're Yeah, here. the Marc, parts significantly. talking, year, terms we've there of and in to of about into consultants We the consulting. the is understanding group involved with they're Sure, really as Krishnan a in beginning offerings in and see that great. engaging broadening service

to as tends a is So that's us so what life where is there healthcare there consumers opportunistic demand some the over by you're well. follow seeing areas and it is spot way, a, sciences for

demand some seeing consultants we're that. and there in So following are

Marc Riddick

maybe whether should see through the might Okay, year if of ads talk great. what globe, there the gears bit And across those to of or something wonder adding maybe could across could think do it's shift us advantage standpoint of and the I by about sort little a if opportunity across about the, then just the we we just globe. competitive talent you how service,

Krishnan Rajagopalan

but Yeah, okay. so mindful plan hiring a believe we've to of that We're pockets of where strategic trying for we markets, the We're ahead get got pretty Heidrick the year. not are very tend on to see focus first open done, is wide for you still opportunities that where those we've of underserved, and us. some geographic see to those and we there we hires the that's be

the going awful we're Culture we attracting team about well continue a hires and cadence of an perspective. we're to like that happy matters the think really terms that. that So lot we're with that from new in looks on how as

it the you'll of moderate probably beginning similar what hiring you've will the our So seen at on that's in plan. year pace the what and it throughout to year a see

Marc Riddick

the consultants look one you're you the moderation talk levels, a company time seeing expecting historically, last little takes some then to Okay, the expect then could that to it Thank slightly we going of point great. for lower is given new you. if at what productive, to wondering everybody I right bit that me. how and about was from and now. might a at you When but up ramp productivity And forward you're average a amount

Krishnan Rajagopalan

in, and aggregate ability great new it's and the we a don't I ranks we a which us reflective it fantastic consultant class actually see the people when is to we in you of what productivity Often a it's ticked you've little down that we seen for bit. the of think a already up, this productivity. for of them that's market, are we're the and beneficiaries into go little mean seeing, their up see promoted Yeah, the go us I reflective and question year, see that onboard bit some is promote

So, do do operate things to them because as in news of some the able gotten there. not well of and it's accounts, them, that better we're terms we with but there I signing how expect is because market, just but to of good

Operator

[Operator Instructions] And Kevin we Steinke Research. go at now Barrington next

Kevin Steinke

As you pace were long-term you've the growth Search guidance. in the business just any some really It second you seen productivity the in to impressive. really doesn't be going discussing the And given of about market. that the talked into very continues slackening drivers of for you quarter in your demand appear here the

to into you again down You of the just pace shifted of we second second I how moderation here the this the still think some as kind levels business may or would quarter. trend to be be you call above of levels Search, momentum mentioned expect move anticipate but that the productivity in half quarter that would pre-COVID Search last is referenced still in something year, the is gradually you

might maybe Just of commentary have few you here. over quarters sort next on any the visibility any

Krishnan Rajagopalan

Yeah, it's Krishnan.

think that should then we here. the Let we year some we between does said Russia, Look, supply I of half what quarter, mean? second maybe As to certainly inflation is running the hour see a we happening miles I to tons expect of running in XX an believe look some we an don't hour. do seeing that a moderation second What the going as of miles that Ukraine, This don't have are that of chain to to what conflicts that quarter, the typical We're not all there ahead, slowdown we're me will hour, may the seen that expect an miles second XX you be before. but go, I result in and I'm into be before, think heading this to is momentum there as going say augment I that. are why XXX Mark,

now the bit slowdown, half outlook of of a kind for significant. nothing our year that second right little the a that's So but of

Mark Harris

lot remember the we Yeah, QX were a because I do did of when and would kind slowdown only a pepper expecting we our promotional. typically when we of

on of inflection can that things a denominator that. offset to it's So help so more There's speak. two

two two was quarter think our operating offsets good that were and and you with can ranks kind you when the a obviously see very obviously and of good I number came one performance of of first they in to a their actually terms metrics promote a within quarter in consultant market, strong of own. the then our very our in book revenue business

it be those points we'll you've Krishnan on slower feel monster a half, be it, kind into as higher in what a to the think second just think where a pace into lot a of little of drop ever I bit historically a slower, impact little the half didn't to imagine but of going ability a much than XXXX. first bit going see an be it's of So be heck as of I to would one as it's don't the was and off, XXXX seen certainly, we second that rightly sustain half but kind out is we of roll the going to challenging, I

Kevin Steinke

terms that's into their work thanks, think in - doing landing, expectations or you expected go and a they're and currently right. of they're of planning in the thinking are about concerns anything plans. factoring doing if and All Understood, with about about of, you're to hiring in some from they're how clients' hearing how where hard are you or terms clients an maybe up interest you any thinking environment rates

Krishnan Rajagopalan

and the that if mean, I I slowdown figure occurs Yeah, exactly, think what and timing everybody is trying begins. when to out

in volatility and day see you So folks well. every as and lots of conversations each equity the markets

parts there a this. to So is of moving lot

doesn't steep this longer-term hearing clients everybody think pretty with that's if now. fast. that something to to fall like I see all look we're what from right things might mean there speaking that that we're that is don't that, anybody that like a but now, there right they're isn't running you There feels out we

Kevin Steinke

around arms a this about I digital just trying Okay, over I'm talking and get you to you've in expense here sense development product the wanted R&D thanks. introduced as quarters quarter, few efforts your know I been that caused category last the previous enough to has done get how more you just to and or what my break where and first be expense to has the just front that numbers to try to expense separately color on is their on it significant a out be just that little factored into it there is wasn't have maybe in any to large now. now, required quarters to

Krishnan Rajagopalan

a great try question, for It's answer me to it Kevin, let you.

initiative members team of was and group full how process really us last out, think aspect for we verticals investing this it been internalization of was of transformational trying helping our partnership that different lot rightly out, that and future believe time a that rethink of Search, made were Heidrick have digitization of in terms really quite that in our an really creates first an we terms in speaking Consulting, a done On-Demand, to we the this. really you a includes indication are with Executive the comment the good I core into pointed some the as to ourselves quarter day was, of we've on

don't anything. and start come are as market for minimis feel as you very I cash so we and are in the we dedicated and them. that products will our our develop and think very business. how to up you out see, this you need we the It's our as Last we we investing restructure is rightly about to future they the being growth was we be have cycle, of It terms see can our to this passionately quarter and this Given point side de of we very numbers into you will to start excess as if ourselves future significant. something

I think do we times. a our we a of and base really going is more It not do think making it today, at there what makes we're is complete enhancement the much into I views all today clients sure that terms to of in us with well what that's resonate we're our going from quite very change direction. a of where interesting and investor

out. it, as the you into was So imagine, we and to real on reason focus quarter, ramp benefits speak, our obviously as it's G&A, minimis it but can de that's the investors a it. We investment see and it in sorry, basically we it, think to important is I'm last up broke so combination for

that's we're do. to what trying So

Kevin Steinke

Okay. for just days view And about you still do products you're to think the should profitability you know tend working products model envisioning consultant or engagement the of about early the that's and digital I some revenue of of along and on, how as kind do perhaps how along it's here, the working we as but those think some or going it you're example forward. existing for other engagements embedded your business the kind maybe with model something you're with and on, financial cross-sell color model around

Krishnan Rajagopalan

all as the start Yeah, that we a result when with that XXXX we're to hoping let me model of and with about to some be is emerges I a think financial we're as that clients. going beta there, Look, doing that revenue from see work bit. the think

that's there, to about putting that's out of So think that. the think I just timeframe sort it

little of with I we a mean an like that embedded do all example. bit with as On-Demand how of the think that above it's it's on I clients, gets with

Okay.

we're we well. that we're set the the got of exactly independent this do with as same Heidrick and an channels we've through So channel working to and do products that going

opportunities So accounts them our other that of Search, we of think those our that outside be Heidrick core as exposing and that. process Consulting, Heidrick we will through all to well be there'll that's

to be will those salesforce So build. a different

what of of over building really in year of that the or and terms team be next concept be expect So next the probably and remainder kind for months for proof more course it this doing will that's of the year into we so. to six

Mark Harris

right. that have at decision is down our and that we we pay very $X.XX of going to That's around, would EPS to add felt make, feel is like like the comments management we us. something but invested could I this I for decision road we a to returned large dividends made And the was that, as a needed team Kevin. really also It's not

So we that decided to make investment.

to core conversation had the very that in this sure is take So of make the side I at $X on was it. why time view, from wanted digitization really throwing important, of want to remarks, business our we do embedded strategy off in to we but a obviously which point reinvest

So well we it's think it. worth

Operator

at We'll next Sommer take from Thank you. Tobey our now question Truist Securities.

Tobey Sommer

of digitization from effort, A I'd Thanks. then aside the questions also. couple like that revisit to

modeling of You that XX% useful kind we a tool other any It future almost right bookings. quarters, growth pretty would that duration of of is in is, of good to or the a cited Consulting. measure a sort kind factor? rate bookings not of factors I backlogs, is growth, for think that Are the of those modeling consider that make need good there in

Mark Harris

a It's know it's you completion. right got Consulting on, executing that a recognition the great revenue I tell it on business still a me book what we've what and I that part, we're of modeling think, closed percentage is Heidrick factor Tobey, of is most tells good for should Mark. that

the it's in So - on side It it's a you've good on. seen stabilization stability is gives of variability of terms pretty it being in revenue, being the some lot will P&L, in come on backlog quarter-on-quarter of It's why Heidrick there, is basis the worked if think the a revenue Consulting. for which you to much the higher. the

that's element. there think I So one

build a kind hopefully execution the were think through the we which gives of that what the year is that it I but a pace backlog, can nice be potentially at QX I and as or more so hope as when P&L, of maintaining still of we and that will us last pace Obviously, higher base element go we kind we of I through to build in have you of going in is indication, of of upon level kind to nice confidence kind continue. is think saw you think kind QX that see other and kind important, XX%.

Tobey Sommer

in have growth you of get the kind would of to that kind of to company. Is growth internal that to headcount element kind order any particularly there scalable to have rapid pretty

Mark Harris

that answers question. Well, two is there to

of to organization delivery the of in our think we on other is have into a which kind bit that I if some think one going the of and I go element lot that bit that margin services, again will help but as of work that we nonetheless, a to of obviously work and attains sometimes scale the we're of a engage those the drive as side the to a it, which Heidrick self-sustainability have deliver the parties need by down, Consulting, thing our us it, and which first hopefully client see you number revenue being to serviced would is of bite that capacity revenue, the fluctuation answer of pertaining Heidrick. really little use is to what we services team that right little have is do call a which you'll again external hire revenue cost lack on of to - on the I kind the we shows with core

it want a So look at depending to both, what the little of it's side is you from. on answer bit equation, the of

Krishnan Rajagopalan

enable tech continue businesses. And to those we

us us So find larger projects it the on to as tech of leverage, well. allows those to allows work enablement businesses that

benefit to real we're that's trying think there. So a do what to I

Tobey Sommer

- I think sequential have a what consultant decline How think your guidance but second you you've does where of terms include - in or quarter, that assume? about longer-term productivity an the got is for view, sequential you the do know for Okay, the in I that a stable. settle, does things guidance assumption that?

Krishnan Rajagopalan

their a from of at say be there as kind would going of sign at where in little expectation we that that to a On-Demand and we least expect and point bit really be would our Consulting, up we're that within to seeing search Talent, look not you differential know expect is would to Heidrick an it right it that, that's be in don't of view, we tremendous executive regard. I it now, productivity in terms

Tobey Sommer

Okay.

Now digital a couple just I'd platform ask like to of switch to the questions.

going it Let's replicate where what that customers describe a great would what to competitors have are much done - do to of do buy at going were you not to why you doing differently, you're or slightly at and how much today, of head is want would head you you say, of done, have similarly potential a point? what that do a you and you're start, but executive from point start kind you think it on search but how

Krishnan Rajagopalan

That's a great question.

is you engage headstart we're bit about a be operating, have for but to think that, things, would think be of mean the a that think we key However, in where in so pretty to most, up, these Heidrick brand well. these a least we than position and we the months headstart nine have I where have technology we're huge at authentic able got terms things. to remember, as team catch probably large I a where can trying talk to the ability I be to able with say to even of to on to longer one six that at maybe things headstart, to I the terms clients That's of

they how a how we're So of important trying them a do not clients, and sense whether presenting we've and these to XX get about to ideas solve plus are talking been or from of we're sets overwhelmingly clients that I real terms tell and that response to how are solve to important our would positive trying you problem and of they incredibly that them. in problems they

positive very feel about we So that.

Tobey Sommer

just in about was a kind the nickels terms I well because, Yeah, absolute curious lot of it's the in up headstart, quarter some on million adds EPS the quarter, bucks Okay. money. basis, of in an of to four not

Krishnan Rajagopalan

Right.

Tobey Sommer

talking and tangible rather a kind to do this around think in more - initiative. In year of spot you be we're reveal the point throughout Okay. a to than have going at what bigger,

Krishnan Rajagopalan

back issues for that's I we've feedback are different solve as it piloting, the will got a that client over think look, well. on least, have of cycle latter without half the into at saying of product, product beta any the the as little question, clients time, the go now right I you're is bigger mean, suite. to this will our it getting reveal year ready and attractive lots point very which I more to We're where of be then think I working be towards Yeah, very, are set will that here. will and facets There we are at mean, one

look of the forward this in So latter year. half

Tobey Sommer

your recently vertical. you seeing What I one could I services sneak If Okay. slide. one financial the in last in. are saw

I capital markets changes M&A and since trends within year-over-year, confirmation slowed, slowed, the in So growth IPOs, have know the but was demand vertical. what any that

Mark Harris

That for vertical okay. and everything, been quite has us really despite strong

the eye on probably are the it's So the we seeing keep marketplace. our most we one pressures given the in that that all

of a see equity we lot think private of I there. players inside still

with So that. momentum there is, there is

right. You're

Some things are on of low a payments, that but traditional probably things fire. FinTech like more are the floor

act balancing and that a it, so a agile we've that's team sector-focused expertise we've got great we've inside got a and to it the it's there of So as well. drives got

spot I in be keeping but we're a we're as able good So our it's something to on. to pivot clearly think eye needed,

Operator

to Instructions] ladies I'd for and And like have appears it gentlemen, Mr. Rajagopalan, back further you turn [Operator today. any we no the conference closing questions to comments.

Krishnan Rajagopalan

all the our we again clients, vision. the of look forward deliver the strategic growth clearly, to Heidrick and to today you we're framework within Thank quarter. But you today. call working our Heidrick employees, impressive, very our joining our were updating next announced in for everyone We to that you continue to value so to Thank hard shareholders results much.

Operator

Struggles day. us & And you Heidrick QX call. earnings much like Thank remainder your and all today's ladies and so wish great you. We'd all thank a to of for gentlemen, Goodbye. you will conclude that conference XXXX joining

Heidrick & Struggles International (HSII) 26 Apr 222022 Q1 Earnings call transcript