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Segment Information | 6 Months Ended
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Jun. 30, 2024
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. In 2023, the Company changed its measure of segment profitability from operating income to Adjusted EBITDA. The following tables include Adjusted EBITDA, which is the measure of segment profitability reported to the chief operating decision maker for purposes of allocating resources to the segments and assessing their performance. 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), analyzing operating expenses as a percentage of net revenue, and analyzing Adjusted EBITDA and Adjusted EBITDA margin more appropriately reflect its core operations. The Company evaluates performance and allocates resources based on the chief operating decision maker’s review of (1) net revenue and (2) Adjusted EBITDA, which is defined as net income before interest, other income or expense, income taxes, depreciation and amortization, as adjusted, to the extent they occur, for earnout accretion, earnout fair value adjustments, contingent compensation, deferred compensation plan income or expense, certain reorganization costs, impairment charges and restructuring charges. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenue in the same period.
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Revenue before reimbursements (net revenue) |  | $ | 278,626 |  |  | $ | 271,225 |  |  | $ | 543,823 |  |  | $ | 510,542 |
Net income (loss) |  | (5,157) |  |  | 8,982 |  |  | 8,875 |  |  | 24,568 |
Interest, net |  | (2,612) |  |  | (1,913) |  |  | (6,698) |  |  | (5,162) |
Other, net |  | (997) |  |  | (1,377) |  |  | (3,568) |  |  | (3,186) |
Provision for income taxes |  | 4,583 |  |  | 7,893 |  |  | 13,482 |  |  | 15,136 |
Operating income (loss) |  | (4,183) |  |  | 13,585 |  |  | 12,091 |  |  | 31,356 |
Adjustments |  |  |  |  |  |  |  |
Depreciation |  | 1,990 |  |  | 2,172 |  |  | 4,483 |  |  | 4,176 |
Intangible amortization |  | 1,920 |  |  | 2,647 |  |  | 4,217 |  |  | 4,516 |
Earnout accretion |  | 469 |  |  | 451 |  |  | 935 |  |  | 642 |
Earnout fair value adjustments |  | 1,211 |  |  | — |  |  | 1,211 |  |  | — |
Acquisition contingent consideration |  | 3,285 |  |  | 3,784 |  |  | 5,273 |  |  | 5,443 |
Deferred compensation plan |  | 956 |  |  | 1,603 |  |  | 3,306 |  |  | 3,736 |
Reorganization costs |  | — |  |  | 3,396 |  |  | — |  |  | 3,396 |
Impairment charges |  | 16,224 |  |  | 7,246 |  |  | 16,224 |  |  | 7,246 |
Restructuring charges |  | 6,939 |  |  | — |  |  | 6,939 |  |  | — |
Total adjustments |  | 32,994 |  |  | 21,299 |  |  | 42,588 |  |  | 29,155 |
Adjusted EBITDA |  | $ | 28,811 |  |  | $ | 34,884 |  |  | $ | 54,679 |  |  | $ | 60,511 |
Adjusted EBITDA margin |  | 10.3 | % |  | 12.9 | % |  | 10.1 | % |  | 11.9 | %
Revenue and Adjusted EBITDA by segment are as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Revenue |  |  |  |  |  |  |  |
Executive Search |  |  |  |  |  |  |  |
Americas |  | $ | 147,078 |  |  | $ | 138,563 |  |  | $ | 283,757 |  |  | $ | 265,890 |
Europe |  | 40,082 |  |  | 45,567 |  |  | 81,563 |  |  | 84,498 |
Asia Pacific |  | 22,807 |  |  | 22,649 |  |  | 46,128 |  |  | 46,878 |
Total Executive Search |  | 209,967 |  |  | 206,779 |  |  | 411,448 |  |  | 397,266 |
On-Demand Talent |  | 41,895 |  |  | 39,240 |  |  | 79,752 |  |  | 70,357 |
Heidrick Consulting |  | 26,764 |  |  | 25,206 |  |  | 52,623 |  |  | 42,919 |
Revenue before reimbursements (net revenue) |  | 278,626 |  |  | 271,225 |  |  | 543,823 |  |  | 510,542 |
Reimbursements |  | 4,251 |  |  | 2,552 |  |  | 8,152 |  |  | 5,354 |
Total revenue |  | $ | 282,877 |  |  | $ | 273,777 |  |  | $ | 551,975 |  |  | $ | 515,896 |
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Adjusted EBITDA |  |  |  |  |  |  |  |
Executive Search |  |  |  |  |  |  |  |
Americas |  | $ | 48,112 |  |  | $ | 46,079 |  |  | $ | 89,983 |  |  | $ | 88,203 |
Europe |  | 2,840 |  |  | 5,456 |  |  | 6,193 |  |  | 7,537 |
Asia Pacific |  | 1,740 |  |  | 1,630 |  |  | 4,935 |  |  | 5,197 |
Total Executive Search |  | 52,692 |  |  | 53,165 |  |  | 101,111 |  |  | 100,937 |
On-Demand Talent |  | (1,629) |  |  | 2,587 |  |  | (2,550) |  |  | 1,240 |
Heidrick Consulting |  | (1,395) |  |  | (1,662) |  |  | (3,422) |  |  | (4,457) |
Total segment operating income |  | 49,668 |  |  | 54,090 |  |  | 95,139 |  |  | 97,720 |
Research and Development |  | (4,781) |  |  | (5,218) |  |  | (9,706) |  |  | (10,469) |
Global Operations Support |  | (16,076) |  |  | (13,988) |  |  | (30,754) |  |  | (26,740) |
Total Adjusted EBITDA |  | $ | 28,811 |  |  | $ | 34,884 |  |  | $ | 54,679 |  |  | $ | 60,511 |

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