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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2025
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File Number: 0-25837

HEIDRICK & STRUGGLES INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)

Delaware |  | 36-2681268
(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)

233 South Wacker Drive-Suite 4900
Chicago, Illinois
60606-6303
(Address of Principal Executive Offices)
(312) 496-1200
(Registrant’s Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered
Common Stock, $0.01 par value | HSII | The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer," “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer |  | ¨ |  | Accelerated filer |  | ☒
Non-Accelerated filer |  | ¨ |  | Smaller reporting company |  | ☐
|  |  |  | Emerging growth company |  | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of October 31, 2025, there were 20,790,543 shares of the Company’s common stock outstanding.

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX

|  | PAGE
PART I. | FINANCIAL INFORMATION |
Item 1. | Condensed Consolidated Financial Statements |
| Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 | 1
| Unaudited Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024 | 2
| Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2025 and 2024 | 3
| Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 | 5
| Unaudited Notes to Condensed Consolidated Financial Statements | 6
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 43
Item 4. | Controls and Procedures | 43
PART II. | OTHER INFORMATION |
Item 1. | Legal Proceedings | 43
Item 1A. | Risk Factors | 43
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 45
Item 6. | Exhibits | 45
| SIGNATURE | 46

PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

|  | September 30, 2025 |  | December 31, 2024
|  | (Unaudited) |  |
Current assets |  |  |  |
Cash and cash equivalents |  | $ | 454,640 |  |  | $ | 515,627 |
Marketable securities |  | 73,442 |  |  | 47,896 |
Accounts receivable, net of allowances of $8,155 and $7,296, respectively |  | 204,085 |  |  | 134,331 |
Prepaid expenses |  | 31,553 |  |  | 28,718 |
Other current assets |  | 49,716 |  |  | 39,935 |
Income taxes recoverable |  | 10,200 |  |  | 6,470 |
Total current assets |  | 823,636 |  |  | 772,977 |
Non-current assets |  |  |  |
Property and equipment, net |  | 55,513 |  |  | 51,685 |
Operating lease right-of-use assets |  | 79,189 |  |  | 83,518 |
Assets designated for retirement and pension plans |  | 11,310 |  |  | 9,976 |
Investments |  | 72,537 |  |  | 58,290 |
Other non-current assets |  | 26,262 |  |  | 25,500 |
Goodwill |  | 142,464 |  |  | 137,861 |
Other intangible assets, net |  | 8,949 |  |  | 12,483 |
Deferred income taxes |  | 44,402 |  |  | 41,898 |
Total non-current assets |  | 440,626 |  |  | 421,211 |
Total assets |  | $ | 1,264,262 |  |  | $ | 1,194,188 |
Current liabilities |  |  |  |
Accounts payable |  | $ | 20,281 |  |  | $ | 25,088 |
Accrued salaries and benefits |  | 366,127 |  |  | 353,531 |
Deferred revenue |  | 56,110 |  |  | 51,085 |
Operating lease liabilities |  | 18,182 |  |  | 17,653 |
Other current liabilities |  | 67,450 |  |  | 21,369 |
Income taxes payable |  | 10,825 |  |  | 14,287 |
Total current liabilities |  | 538,975 |  |  | 483,013 |
Non-current liabilities |  |  |  |
Accrued salaries and benefits |  | 38,945 |  |  | 58,547 |
Retirement and pension plans |  | 88,193 |  |  | 72,138 |
Operating lease liabilities |  | 83,100 |  |  | 83,152 |
Other non-current liabilities |  | 4,380 |  |  | 42,905 |
Deferred income taxes |  | 1,449 |  |  | 1,616 |
Total non-current liabilities |  | 216,067 |  |  | 258,358 |
Total liabilities |  | 755,042 |  |  | 741,371 |
Commitments and contingencies (Note 17) |  |  |  |
Stockholders’ equity |  |  |  |
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued at September 30, 2025 and December 31, 2024 |  | — |  |  | — |
Common stock, $0.01 par value, 100,000,000 shares authorized, 20,795,623 and 20,414,915 shares issued, 20,790,543 and 20,409,835 shares outstanding at September 30, 2025 and December 31, 2024, respectively |  | 208 |  |  | 204 |
Treasury stock at cost, 5,080 shares at September 30, 2025 and December 31, 2024 |  | (110) |  |  | (110) |
Additional paid in capital |  | 266,212 |  |  | 260,893 |
Retained earnings |  | 248,195 |  |  | 205,875 |
Accumulated other comprehensive loss |  | (5,285) |  |  | (14,045) |
Total stockholders’ equity |  | 509,220 |  |  | 452,817 |
Total liabilities and stockholders’ equity |  | $ | 1,264,262 |  |  | $ | 1,194,188 |

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
1

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except per share amounts)
(Unaudited)

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Revenue |  |  |  |  |  |  |  |
Revenue before reimbursements (net revenue) |  | $ | 322,837 |  |  | $ | 278,559 |  |  | $ | 923,663 |  |  | $ | 822,382 |
Reimbursements |  | 5,059 |  |  | 4,256 |  |  | 13,583 |  |  | 12,408 |
Total revenue |  | 327,896 |  |  | 282,815 |  |  | 937,246 |  |  | 834,790 |
Operating expenses |  |  |  |  |  |  |  |
Salaries and benefits |  | 217,836 |  |  | 183,025 |  |  | 616,514 |  |  | 535,330 |
General and administrative expenses |  | 41,778 |  |  | 39,740 |  |  | 125,386 |  |  | 127,556 |
Cost of services |  | 37,644 |  |  | 31,030 |  |  | 102,297 |  |  | 88,158 |
Research and development |  | 6,418 |  |  | 5,682 |  |  | 18,847 |  |  | 17,002 |
Impairment charges |  | — |  |  | — |  |  | — |  |  | 16,224 |
Restructuring charges |  | — |  |  | — |  |  | — |  |  | 6,939 |
Reimbursed expenses |  | 5,059 |  |  | 4,256 |  |  | 13,583 |  |  | 12,408 |
Total operating expenses |  | 308,735 |  |  | 263,733 |  |  | 876,627 |  |  | 803,617 |
Operating income |  | 19,161 |  |  | 19,082 |  |  | 60,619 |  |  | 31,173 |
Non-operating income (loss) |  |  |  |  |  |  |  |
Interest, net |  | 3,436 |  |  | 2,570 |  |  | 10,030 |  |  | 9,268 |
Other, net |  | 3,884 |  |  | (555) |  |  | 4,594 |  |  | 3,013 |
Net non-operating income |  | 7,320 |  |  | 2,015 |  |  | 14,624 |  |  | 12,281 |
Income before income taxes |  | 26,481 |  |  | 21,097 |  |  | 75,243 |  |  | 43,454 |
Provision for income taxes |  | 8,835 |  |  | 6,268 |  |  | 23,218 |  |  | 19,750 |
Net income |  | 17,646 |  |  | 14,829 |  |  | 52,025 |  |  | 23,704 |
Other comprehensive income (loss), net of tax |  |  |  |  |  |  |  |
Foreign currency translation adjustment |  | (287) |  |  | 6,977 |  |  | 8,780 |  |  | 816 |
Net unrealized gain (loss) on available-for-sale investments |  | 26 |  |  | 19 |  |  | (20) |  |  | (5) |
Other comprehensive income (loss), net of tax |  | (261) |  |  | 6,996 |  |  | 8,760 |  |  | 811 |
Comprehensive income |  | $ | 17,385 |  |  | $ | 21,825 |  |  | $ | 60,785 |  |  | $ | 24,515 |
Weighted-average common shares outstanding |  |  |  |  |  |  |  |
Basic |  | 20,735 |  |  | 20,357 |  |  | 20,617 |  |  | 20,254 |
Diluted |  | 21,316 |  |  | 21,024 |  |  | 21,377 |  |  | 21,144 |
Earnings per common share |  |  |  |  |  |  |  |
Basic |  | $ | 0.85 |  |  | $ | 0.73 |  |  | $ | 2.52 |  |  | $ | 1.17 |
Diluted |  | $ | 0.83 |  |  | $ | 0.71 |  |  | $ | 2.43 |  |  | $ | 1.12 |
Cash dividends paid per share |  | $ | 0.15 |  |  | $ | 0.15 |  |  | $ | 0.45 |  |  | $ | 0.45 |

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
2

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands, except per share amounts)
(Unaudited)

|  |  |  |  | Additional Paid in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Income (Loss) |  | Total
| Common Stock |  | Treasury Stock |
| Shares |  | Amount |  | Shares |  | Amount |
Balance at December 31, 2024 | 20,415 |  |  | $ | 204 |  |  | 5 |  |  | $ | (110) |  |  | $ | 260,893 |  |  | $ | 205,875 |  |  | $ | (14,045) |  |  | $ | 452,817 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 13,306 |  |  | — |  |  | 13,306 |
Other comprehensive income, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,502 |  |  | 2,502 |
Common and treasury stock transactions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 2,510 |  |  | — |  |  | — |  |  | 2,510 |
Vesting of equity awards, net of tax withholding | 211 |  |  | 2 |  |  | — |  |  | — |  |  | (2,891) |  |  | — |  |  | — |  |  | (2,889) |
Cash dividends declared ($0.15 per share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,094) |  |  | — |  |  | (3,094) |
Dividend equivalents on restricted stock units | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (102) |  |  | — |  |  | (102) |
Balance at March 31, 2025 | 20,626 |  |  | $ | 206 |  |  | 5 |  |  | $ | (110) |  |  | $ | 260,512 |  |  | $ | 215,985 |  |  | $ | (11,543) |  |  | $ | 465,050 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 21,073 |  |  | — |  |  | 21,073 |
Other comprehensive income, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 6,519 |  |  | 6,519 |
Common and treasury stock transactions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 3,987 |  |  | — |  |  | — |  |  | 3,987 |
Issuance of common stock | 7 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Vesting of equity awards, net of tax withholding | 98 |  |  | 1 |  |  | — |  |  | — |  |  | (888) |  |  | — |  |  | — |  |  | (887) |
Cash dividends declared ($0.15 per share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,094) |  |  | — |  |  | (3,094) |
Dividend equivalents on restricted stock units | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (157) |  |  | — |  |  | (157) |
Balance at June 30, 2025 | 20,731 |  |  | $ | 207 |  |  | 5 |  |  | $ | (110) |  |  | $ | 263,611 |  |  | $ | 233,807 |  |  | $ | (5,024) |  |  | $ | 492,491 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 17,646 |  |  | — |  |  | 17,646 |
Other comprehensive income, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (261) |  |  | (261) |
Common and treasury stock transactions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 2,919 |  |  | — |  |  | — |  |  | 2,919 |
Vesting of equity awards, net of tax withholding | 65 |  |  | 1 |  |  | — |  |  | — |  |  | (318) |  |  | — |  |  | — |  |  | (317) |
Cash dividends declared ($0.15 per share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,111) |  |  | — |  |  | (3,111) |
Dividend equivalents on restricted stock units | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (147) |  |  | — |  |  | (147) |
Balance at September 30, 2025 | 20,796 |  |  | $ | 208 |  |  | 5 |  |  | $ | (110) |  |  | $ | 266,212 |  |  | $ | 248,195 |  |  | $ | (5,285) |  |  | $ | 509,220 |

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
3

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands, except per share amounts)
(Unaudited)

|  |  |  |  | Additional Paid in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Income (Loss) |  | Total
| Common Stock |  | Treasury Stock |
| Shares |  | Amount |  | Shares |  | Amount |
Balance at December 31, 2023 | 20,127 |  |  | $ | 201 |  |  | 5 |  |  | $ | (110) |  |  | $ | 251,988 |  |  | $ | 210,070 |  |  | $ | 129 |  |  | $ | 462,278 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 14,032 |  |  | — |  |  | 14,032 |
Other comprehensive loss, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (4,091) |  |  | (4,091) |
Common and treasury stock transactions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 2,644 |  |  | — |  |  | — |  |  | 2,644 |
Vesting of equity awards, net of tax withholding | 127 |  |  | 1 |  |  | — |  |  | — |  |  | (2,863) |  |  | — |  |  | — |  |  | (2,862) |
Cash dividends declared ($0.15 per share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,018) |  |  | — |  |  | (3,018) |
Dividend equivalents on restricted stock units | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (198) |  |  | — |  |  | (198) |
Balance at March 31, 2024 | 20,254 |  |  | $ | 202 |  |  | 5 |  |  | $ | (110) |  |  | $ | 251,769 |  |  | $ | 220,886 |  |  | $ | (3,962) |  |  | $ | 468,785 |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (5,157) |  |  | — |  |  | (5,157) |
Other comprehensive loss, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,094) |  |  | (2,094) |
Common and treasury stock transactions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 3,465 |  |  | — |  |  | — |  |  | 3,465 |
Issuance of common stock | 13 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Vesting of equity awards, net of tax withholding | 55 |  |  | 1 |  |  | — |  |  | — |  |  | (886) |  |  | — |  |  | — |  |  | (885) |
Cash dividends declared ($0.15 per share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,039) |  |  | — |  |  | (3,039) |
Dividend equivalents on restricted stock units | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (143) |  |  | — |  |  | (143) |
Balance at June 30, 2024 | 20,322 |  |  | $ | 203 |  |  | 5 |  |  | $ | (110) |  |  | $ | 254,348 |  |  | $ | 212,547 |  |  | $ | (6,056) |  |  | $ | 460,932 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 14,829 |  |  | — |  |  | 14,829 |
Other comprehensive income, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 6,996 |  |  | 6,996 |
Common and treasury stock transactions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 3,792 |  |  | — |  |  | — |  |  | 3,792 |
Vesting of equity awards | 92 |  |  | 1 |  |  | — |  |  | — |  |  | (54) |  |  | — |  |  | — |  |  | (53) |
Cash dividends declared ($0.15 per share) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,057) |  |  | — |  |  | (3,057) |
Dividend equivalents on restricted stock units | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (154) |  |  | — |  |  | (154) |
Balance at September 30, 2024 | 20,414 |  |  | $ | 204 |  |  | 5 |  |  | $ | (110) |  |  | $ | 258,086 |  |  | $ | 224,165 |  |  | $ | 940 |  |  | $ | 483,285 |

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
4

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

|  | Nine Months Ended September 30,
|  | 2025 |  | 2024
Cash flows - operating activities |  |  |  |
Net income |  | $ | 52,025 |  |  | $ | 23,704 |
Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |
Depreciation and amortization |  | 15,245 |  |  | 13,650 |
Deferred income taxes |  | (1,572) |  |  | (2,060) |
Stock-based compensation expense |  | 9,416 |  |  | 9,901 |
Accretion expense related to earnout payments |  | 1,534 |  |  | 1,413 |
Gain on marketable securities |  | (4,460) |  |  | (2,323) |
Loss on disposal of property and equipment |  | 42 |  |  | 264 |
Impairment charges |  | — |  |  | 16,224 |
Changes in assets and liabilities: |  |  |  |
Accounts receivable |  | (63,561) |  |  | (51,707) |
Accounts payable |  | (6,334) |  |  | 103 |
Accrued expenses |  | (12,238) |  |  | (41,372) |
Restructuring accrual |  | (1,881) |  |  | 2,990 |
Deferred revenue |  | 3,632 |  |  | 1,163 |
Income taxes recoverable and payable, net |  | (7,297) |  |  | 347 |
Retirement and pension plan assets and liabilities |  | 5,329 |  |  | 6,385 |
Prepaid expenses |  | (1,922) |  |  | (4,057) |
Other assets and liabilities, net |  | (16,893) |  |  | (987) |
Net cash used in operating activities |  | (28,935) |  |  | (26,362) |
Cash flows - investing activities |  |  |  |
Capital expenditures |  | (12,141) |  |  | (23,042) |
Purchases of marketable securities and investments |  | (362,295) |  |  | (115,608) |
Proceeds from sales of marketable securities and investments |  | 335,839 |  |  | 129,070 |
Net cash used in investing activities |  | (38,597) |  |  | (9,580) |
Cash flows - financing activities |  |  |  |
Debt issuance costs |  | (360) |  |  | — |
Cash dividends paid |  | (9,705) |  |  | (9,609) |
Payment of employee tax withholdings on equity transactions |  | (4,093) |  |  | (3,800) |
Net cash used in financing activities |  | (14,158) |  |  | (13,409) |
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash |  | 20,786 |  |  | 155 |
Net decrease in cash, cash equivalents and restricted cash |  | (60,904) |  |  | (49,196) |
Cash, cash equivalents and restricted cash at beginning of period |  | 515,813 |  |  | 412,618 |
Cash, cash equivalents and restricted cash at end of period |  | $ | 454,909 |  |  | $ | 363,422 |

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
5

HEIDRICK & STRUGGLES INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All tables in thousands, except per share figures and percentages)
(Unaudited)
1. Basis of Presentation of Interim Financial Information
The accompanying unaudited Condensed Consolidated Financial Statements of Heidrick & Struggles International, Inc. and subsidiaries (the "Company") have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Significant items subject to estimates and assumptions include revenue recognition, allowances for deferred tax assets and liabilities, interim effective tax rates, contingent consideration liabilities, and the assessment of goodwill for impairment. Estimates are subject to a degree of uncertainty and actual results could differ from these estimates. In the opinion of management, all adjustments necessary to fairly present the financial position of the Company at September 30, 2025, and December 31, 2024, the results of operations for the three and nine months ended September 30, 2025, and 2024, and its cash flows for the nine months ended September 30, 2025, and 2024, have been included and are of a normal, recurring nature except as otherwise disclosed. These financial statements and notes are to be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 3, 2025.
2. Summary of Significant Accounting Policies
A complete listing of the Company’s significant accounting policies is discussed in Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Revenue Recognition
See Note 3, Revenue.
Cost of Services
Cost of services consists of costs related to the delivery of various services in the Company's On-Demand Talent and Heidrick Consulting operating segments.
Research and Development
Research and development expense consists of payroll, employee benefits, stock-based compensation, other employee expenses and third-party professional fees associated with new product development.
Marketable Securities
The Company’s marketable securities consist of available-for-sale debt securities with original maturities exceeding three months.
6

Restricted Cash
The following table provides a reconciliation of the cash and cash equivalents between the Condensed Consolidated Balance Sheets and the Condensed Consolidated Statements of Cash Flows as of September 30, 2025 and 2024, and December 31, 2024 and 2023, respectively:

| September 30, |  | December 31,
| 2025 |  | 2024 |  | 2024 |  | 2023
Cash and cash equivalents | $ | 454,640 |  |  | $ | 363,422 |  |  | $ | 515,627 |  |  | $ | 412,618 |
Restricted cash included within other non-current assets | 269 |  |  | — |  |  | 186 |  |  | — |
Total cash, cash equivalents and restricted cash | $ | 454,909 |  |  | $ | 363,422 |  |  | $ | 515,813 |  |  | $ | 412,618 |

Earnings per Common Share
Basic earnings per common share are computed by dividing net income by weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Common equivalent shares are excluded from the determination of diluted earnings per share in periods in which they have an anti-dilutive effect.
The following table sets forth the computation of basic and diluted earnings per share:

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Net income |  | $ | 17,646 |  |  | $ | 14,829 |  |  | $ | 52,025 |  |  | $ | 23,704 |
Weighted average shares outstanding: |  |  |  |  |  |  |  |
Basic |  | 20,735 |  |  | 20,357 |  |  | 20,617 |  |  | 20,254 |
Effect of dilutive securities: |  |  |  |  |  |  |  |
Restricted stock units |  | 377 |  |  | 458 |  |  | 519 |  |  | 619 |
Performance stock units |  | 204 |  |  | 209 |  |  | 241 |  |  | 271 |
Diluted |  | 21,316 |  |  | 21,024 |  |  | 21,377 |  |  | 21,144 |
Basic earnings per share |  | $ | 0.85 |  |  | $ | 0.73 |  |  | $ | 2.52 |  |  | $ | 1.17 |
Diluted earnings per share |  | $ | 0.83 |  |  | $ | 0.71 |  |  | $ | 2.43 |  |  | $ | 1.12 |

Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating lease right-of-use assets, Current liabilities - Operating lease liabilities and Non-current liabilities - Operating lease liabilities in the Company's Condensed Consolidated Balance Sheets. The Company does not have any leases that meet the finance lease criteria.
Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets and liabilities are recognized on the commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, an incremental borrowing rate based on the information available at the commencement date is used in determining the present value of lease payments. The operating lease right-of-use asset also includes any lease payments made in advance and any accrued rent expense balances. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The Company has lease agreements with lease and non-lease components. For office leases, the Company accounts for the lease and non-lease components as a single lease component. For equipment leases, such as vehicles and office equipment, the Company accounts for the lease and non-lease components separately.
7

Goodwill
Goodwill represents the difference between the purchase price of acquired businesses and the related fair value of the net assets acquired, which is accounted for by the acquisition method of accounting. The Company performs assessments of the carrying value of its goodwill at least annually and whenever events occur or circumstances indicate that a carrying amount of goodwill may not be recoverable. These circumstances include a significant change in business climate, attrition of key personnel, changes in financial condition or results of operations, prolonged decline in the Company’s stock price and market capitalization, competition, and other factors.
The goodwill impairment test compares the fair value of a reporting unit to its carrying amount, including goodwill. The Company operates five reporting units: Americas, Europe (which includes Africa), Asia Pacific (which includes the Middle East), On-Demand Talent and Heidrick Consulting. The fair value of each of the Company’s reporting units is determined using a discounted cash flow methodology. An impairment charge is recognized for the amount by which the carrying value of the reporting unit exceeds its fair value; however, the loss recognized is not to exceed the total amount of goodwill allocated to that reporting unit.
Immaterial Correction of Prior Period Error
A presentation error was identified within the Company's Condensed Consolidated Statements of Cash Flows in the Condensed Consolidated Financial Statements for the nine months ended September 30, 2024, related to the presentation of cash paid for capital expenditures. Certain capital expenditures were improperly classified as not paid as of September 30, 2024, rather than presented as a cash outflow from investing activities. The Company assessed the materiality of this change in presentation on prior period consolidated financial statements in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that the error correction in its Consolidated Statement of Cash Flows is not material to any previously presented condensed consolidated financial statements. The correction of the error had no impact on net income, total cash flows or stockholders' equity.
The following table outlines the effects of the correction of the presentation error on the Condensed Consolidated Statements of Cash Flows:

| Nine Months Ended September 30, 2024
| As Previously Reported |  | Adjustment |  | As Corrected
Accounts payable | $ | (13,292) |  |  | $ | 13,395 |  |  | $ | 103 |
Net cash used in operating activities | (39,757) |  |  | 13,395 |  |  | (26,362) |
Capital expenditures | (9,647) |  |  | (13,395) |  |  | (23,042) |
Net cash used in investing activities | $ | 3,815 |  |  | $ | (13,395) |  |  | $ | (9,580) |

Recently Issued Financial Accounting Standards
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The standard is intended to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its financial statements.
In November 2024, the FASB issued ASU No. 2024-03 "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)." The standard requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. The amendment in this update is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this guidance on its financial statements.
8

3. Revenue
Executive Search
Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Generally, each executive search contract contains one performance obligation which is the process of identifying potentially qualified candidates for a specific client position. In most contracts, the transaction price includes both fixed and variable consideration. Fixed consideration is comprised of a retainer, equal to approximately one-third of the estimated first year compensation for the position to be filled, and indirect expenses, equal to a specified percentage of the retainer, as defined in the contract. The Company generally bills clients for the retainer and indirect expenses in one-third increments over a three-month period commencing in the month of a client’s acceptance of the contract. If actual compensation of a placed candidate exceeds the original compensation estimate, the Company is often authorized to bill the client for one-third of the excess compensation. The Company refers to this additional billing as uptick revenue. In most contracts, variable consideration is comprised of uptick revenue and direct expenses. The Company bills its clients for uptick revenue upon completion of the executive search, and direct expenses are billed as incurred.
The Company estimates uptick revenue at contract inception, based on a portfolio approach, utilizing the expected value method based on a historical analysis of uptick revenue realized in the Company’s geographic regions and industry practices, and initially records a contract’s uptick revenue in an amount that is probable not to result in a significant reversal of cumulative revenue recognized when the actual amount of uptick revenue for the contract is known. Differences between the estimated and actual amounts of variable consideration are recorded when known. The Company does not estimate revenue for direct expenses as it is not materially different than recognizing revenue as direct expenses are incurred.
Revenue from executive search engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance. Revenue from executive search engagements is recognized over the expected average period of performance, in proportion to the estimated personnel time incurred to fulfill the obligations under the executive search contract. Revenue is generally recognized over a period of approximately six months.
The Company's executive search contracts contain a replacement guarantee which provides for an additional search to be completed, free of charge except for expense reimbursements, should the candidate presented by the Company be hired by the client and subsequently terminated by the client for performance reasons within a specified period of time. The replacement guarantee is an assurance warranty, which is not a performance obligation under the terms of the executive search contract, as the Company does not provide any services under the terms of the guarantee that transfer benefits to the client in excess of assuring that the identified candidate complies with the agreed-upon specifications. The Company accounts for the replacement guarantee under the relevant warranty guidance in Accounting Standards Codification 460 - Guarantees.
On-Demand Talent
The Company enters into contracts with clients that outline the general terms and conditions of the assignment to provide on-demand consultants for various types of consulting projects, which consultants may be independent contractors or temporary employees. The consideration the Company expects to receive under each contract is dependent on the time-based fees specified in the contract. Revenue from on-demand engagement performance obligations is recognized over time as clients simultaneously receive and consume the benefits provided by the Company's performance. The Company has applied the practical expedient to recognize revenue for these services in the amount to which the Company has a right to invoice the client, as this amount corresponds directly with the value provided to the client for the performance completed to date. For transactions where a third-party contractor is involved in providing the services to the client, the Company reports the revenue and the related direct costs on a gross basis as it has determined that it is the principal in the transaction. The Company is primarily responsible for fulfilling the promise to provide consulting services to its clients and the Company has discretion in establishing the prices charged to clients for the consulting services and is able to contractually obligate the independent service provider to deliver services and deliverables that the Company has agreed to provide to its clients.
9

Heidrick Consulting
Revenue is recognized as performance obligations are satisfied by transferring a good or service to a client. Heidrick Consulting enters into contracts with clients that outline the general terms and conditions of the assignment to provide succession planning, executive assessment, top team and board effectiveness and culture shaping programs. The consideration the Company expects to receive under each contract is generally fixed. Most of the Company's consulting contracts contain one performance obligation, which is the overall process of providing the consulting service requested by the client. The majority of our consulting revenue is recognized over time utilizing input methods. Revenue recognition over time for the majority of our consulting engagements is measured by total cost or time incurred as a percentage of the total estimated cost or time on the consulting engagement.
Contract Balances
Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Contract assets and liabilities are classified as current due to the nature of the Company's contracts, which are completed within one year. Contract assets are included within Other current assets on the Condensed Consolidated Balance Sheets.
Unbilled receivables: Unbilled receivables represents contract assets from revenue recognized over time in excess of the amount billed to the client and the amount billed to the client is solely dependent upon the passage of time. This amount includes revenue recognized in excess of billed Executive Search retainers, Heidrick Consulting fees, and On-Demand Talent fees.
Contract assets: Contract assets represent revenue recognized over time in excess of the amount billed to the client, and the amount billed to the client is not solely subject to the passage of time. This amount primarily includes revenue recognized for upticks and contingent placement fees in executive search contracts.
Deferred revenue: Contract liabilities consist of deferred revenue, which is equal to billings in excess of revenue recognized.
The following table outlines the changes in the contract asset and liability balances from December 31, 2024, to September 30, 2025:

| September 30, 2025 |  | December 31, 2024 |  | Change
Contract assets |  |  |  |  |
Unbilled receivables, net | $ | 26,911 |  |  | $ | 17,610 |  |  | $ | 9,301 |
Contract assets | 17,174 |  |  | 15,540 |  |  | 1,634 |
Total contract assets | 44,085 |  |  | 33,150 |  |  | 10,935 |
Contract liabilities |  |  |  |  |
Deferred revenue | $ | 56,110 |  |  | $ | 51,085 |  |  | $ | 5,025 |

Contract assets were recorded within Current Assets - Other current assets in the Condensed Consolidated Balance Sheets at both September 30, 2025 and December 31, 2024. During the nine months ended September 30, 2025, the Company recognized revenue of $45.5 million that was included in the contract liabilities balance at the beginning of the period. The amount of revenue recognized during the nine months ended September 30, 2025, from performance obligations partially satisfied in previous periods as a result of changes in the estimates of variable consideration was $29.5 million.
Each of the Company's contracts has an expected duration of one year or less. Accordingly, the Company has elected to utilize the available practical expedient related to the disclosure of the transaction price allocated to the remaining performance obligations under its contracts. The Company has also elected the available practical expedients related to adjusting for the effects of a significant financing component and the capitalization of contract acquisition costs. The Company charges and collects from its clients sales tax and value added taxes as required by certain jurisdictions. The Company has made an accounting policy election to exclude these items from the transaction price in its contracts.
10

4. Credit Losses
The Company is exposed to credit losses primarily through the provision of its executive search, consulting, and on-demand talent services. The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of clients' trade accounts receivables. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is primarily based on historical loss-rate experience. When required, the Company adjusts the loss-rate methodology to account for current conditions and reasonable and supportable expectations of future economic and market conditions. The Company generally assesses future economic conditions for a period of sixty to ninety days, which corresponds with the contractual life of its accounts receivables. Additionally, specific allowance amounts are established to record the appropriate provision for clients that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of clients' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible.
The activity in the allowance for credit losses on the Company's trade receivables is as follows:

Balance at December 31, 2024 | $ | 7,296 |
Provision for credit losses | 7,849 |
Write-offs | (7,234) |
Foreign currency translation | 244 |
Balance at September 30, 2025 | $ | 8,155 |

There were no investments with unrealized losses at September 30, 2025, and December 31, 2024.
5. Property and Equipment, net
The components of the Company’s property and equipment are as follows:

|  | September 30, 2025 |  | December 31, 2024
Leasehold improvements |  | $ | 55,276 |  |  | $ | 49,744 |
Office furniture, fixtures and equipment |  | 15,738 |  |  | 14,384 |
Computer equipment and software |  | 53,208 |  |  | 47,649 |
Property and equipment, gross |  | 124,222 |  |  | 111,777 |
Accumulated depreciation |  | (68,709) |  |  | (60,092) |
Property and equipment, net |  | $ | 55,513 |  |  | $ | 51,685 |

Depreciation expense for the three months ended September 30, 2025, and 2024, was $3.8 million and $3.0 million, respectively. Depreciation expense for the nine months ending September 30, 2025, and 2024, was $10.4 million and $7.5 million, respectively.
6. Leases
The Company's lease portfolio is comprised of operating leases for office space and equipment. The majority of the Company's leases include both lease and non-lease components, which the Company accounts for differently depending on the underlying class of asset. Certain of the Company's leases include one or more options to renew or terminate the lease at the Company's discretion. Generally, the renewal and termination options are not included in the right-of-use assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal and termination options and, when they are reasonably certain of exercise, includes the renewal or termination option in the lease term.
As most of the Company's leases do not provide an implicit interest rate, the Company utilizes an incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of lease payments. The Company has a centrally managed treasury function and, therefore, a portfolio approach is applied in determining the incremental borrowing rate. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a fully collateralized basis over a similar term in an amount equal to the total lease payments in a similar economic environment.
As of September 30, 2025, office leases have remaining lease terms that range from less than one year to 12.1 years, some
11

of which also include options to extend or terminate the lease. Most office leases contain both fixed and variable lease payments. Variable lease costs consist primarily of rent escalations based on an established index or rate and taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor. The Company has elected to utilize the available practical expedient to not separate lease and non-lease components for office leases.
As of September 30, 2025, equipment leases, which are comprised of vehicle and office equipment leases, have remaining terms that range from less than one year to 4.8 years, some of which also include options to extend or terminate the lease. The Company's equipment leases do not contain variable lease payments. The Company separates the lease and non-lease components for its equipment leases. Equipment leases do not comprise a significant portion of the Company's lease portfolio.
Lease cost components included within Operating expenses - General and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income were as follows:

|  | Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
|  | 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Operating lease cost |  | $ | 5,209 |  |  | $ | 5,311 |  |  | $ | 15,593 |  |  | $ | 17,667 |  |  |  |  |
Variable lease cost |  | 2,442 |  |  | 2,334 |  |  | 8,265 |  |  | 7,359 |  |  |  |  |
Total lease cost |  | $ | 7,651 |  |  | $ | 7,645 |  |  | $ | 23,858 |  |  | $ | 25,026 |  |  |  |  |

Supplemental cash flow information related to the Company's operating leases is as follows for the nine months ended September 30:

|  | 2025 |  | 2024
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |
Operating cash flows from operating leases |  | $ | 14,254 |  |  | $ | 16,718 |
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |
Operating leases |  | $ | 6,730 |  |  | $ | 16,080 |

The weighted average remaining lease term and weighted average discount rate for operating leases as of September 30, are as follows:

|  | 2025 |  | 2024
Weighted Average Remaining Lease Term |  |  |  |
Operating leases |  | 7.4 years |  | 7.5 years
Weighted Average Discount Rate |  |  |  |
Operating leases |  | 5.30 | % |  | 5.15 | %

The future maturities of the Company's operating lease liabilities as of September 30, 2025, for the years ended December 31, are as follows:

| Operating Lease Maturity
2025 | $ | 4,160 |
2026 | 18,609 |
2027 | 18,390 |
2028 | 16,247 |
2029 | 14,418 |
Thereafter | 53,502 |
Total lease payments | 125,326 |
Less: Interest | 24,044 |
Present value of lease liabilities | $ | 101,282 |

12

7. Financial Instruments and Fair Value
Cash, Cash Equivalents and Marketable Securities
The Company's investments in marketable debt securities, which consist of U.S. Treasury bills, are classified and accounted for as available-for-sale. The Company classifies its marketable debt securities as either short-term or long-term based on each instrument's underlying contractual maturity date. Unrealized gains and losses on marketable debt securities classified as available-for-sale are recognized in Accumulated other comprehensive income in the Condensed Consolidated Balance Sheets until realized.
The Company's cash, cash equivalents, and marketable securities by significant investment category are as follows:

| Amortized Cost |  | Unrealized Gains |  |  |  |  |  | Fair Value |  | Cash and Cash Equivalents |  | Marketable Securities
Balance at September 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  |  |  |  |  |  |  |  |  |  | $ | 238,795 |  |  | $ | — |
Level 1(1): |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  |  |  |  |  |  |  |  |  |  | 28,149 |  |  | — |
U.S. Treasury securities | $ | 261,103 |  |  | $ | 35 |  |  |  |  |  |  | $ | 261,138 |  |  | 187,696 |  |  | 73,442 |
Total Level 1 | 261,103 |  |  | 35 |  |  |  |  |  |  | 261,138 |  |  | 215,845 |  |  | 73,442 |
Total | $ | 261,103 |  |  | $ | 35 |  |  |  |  |  |  | $ | 261,138 |  |  | $ | 454,640 |  |  | $ | 73,442 |

| Amortized Cost |  | Unrealized Gains |  |  |  | Fair Value |  | Cash and Cash Equivalents |  | Marketable Securities
Balance at December 31, 2024 |  |  |  |  |  |  |  |  |  |  |
Cash |  |  |  |  |  |  |  |  | $ | 256,638 |  |  | $ | — |
Level 1(1): |  |  |  |  |  |  |  |  |  |  |
Money market funds |  |  |  |  |  |  |  |  | 36,781 |  |  | — |
U.S. Treasury securities | $ | 270,050 |  |  | $ | 54 |  |  |  |  | $ | 270,104 |  |  | 222,208 |  |  | 47,896 |
Total Level 1 | 270,050 |  |  | 54 |  |  |  |  | 270,104 |  |  | 258,989 |  |  | 47,896 |
Total | $ | 270,050 |  |  | $ | 54 |  |  |  |  | $ | 270,104 |  |  | $ | 515,627 |  |  | $ | 47,896 |

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.
Investments, Assets Designated for Retirement and Pension Plans and Associated Liabilities
The Company has a U.S. non-qualified deferred compensation plan that consists primarily of U.S. marketable securities and mutual funds. The aggregate cost basis for these investments was $51.5 million and $45.3 million as of September 30, 2025, and December 31, 2024, respectively.
The Company also maintains a pension plan for certain current and former employees in Germany. The pensions are individually fixed Euro amounts that vary depending on the function and the eligible years of service of the employee. The Company’s investment strategy is to support its pension obligations through reinsurance contracts. The BaFin—German Federal Financial Supervisory Authority—supervises the insurance companies and the reinsurance contracts. The BaFin requires each reinsurance contract to guarantee a fixed minimum return. The Company’s pension benefits are fully reinsured by group insurance contracts with ERGO Lebensversicherung AG, and the group insurance contracts are measured in accordance with BaFin guidelines (including mortality tables and discount rates) which are considered Level 2 inputs.
13

The following tables provide a summary of the fair value measurements for each major category of investments, assets designated for retirement and pension plans and associated liabilities measured at fair value:

|  |  |  | Balance Sheet Classification
|  |  |  | Current Assets |  |  |  | Non-Current Assets |  | Current Liabilities |  | Non-current Liabilities
|  | Fair Value |  | Other Current Assets |  |  |  | Assets Designated for Retirement and Pension Plans |  | Investments |  | Other Current Liabilities |  | Retirement and Pension Plans
Balance at September 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Measured on a recurring basis: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Level 1(1): |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. non-qualified deferred compensation plan |  | $ | 72,537 |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | 72,537 |  |  | $ | — |  |  | $ | — |
Level 2(2): |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retirement and pension plan assets |  | 12,597 |  |  | 1,287 |  |  |  |  | 11,310 |  |  | — |  |  | — |  |  | — |
Pension benefit obligation |  | (14,062) |  |  | — |  |  |  |  | — |  |  | — |  |  | (1,287) |  |  | (12,775) |
Total Level 2 |  | (1,465) |  |  | 1,287 |  |  |  |  | 11,310 |  |  | — |  |  | (1,287) |  |  | (12,775) |
Total |  | $ | 71,072 |  |  | $ | 1,287 |  |  |  |  | $ | 11,310 |  |  | $ | 72,537 |  |  | $ | (1,287) |  |  | $ | (12,775) |

|  |  | Balance Sheet Classification
|  |  | Current Assets |  |  |  | Non-Current Assets |  | Current Liabilities |  | Non-current Liabilities
| Fair Value |  | Other Current Assets |  |  |  | Assets Designated for Retirement and Pension Plans |  | Investments |  | Other Current Liabilities |  | Retirement and Pension Plans
Balance at December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |
Measured on a recurring basis: |  |  |  |  |  |  |  |  |  |  |  |  |
Level 1(1): |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. non-qualified deferred compensation plan | $ | 58,290 |  |  | $ | — |  |  |  |  | $ | — |  |  | $ | 58,290 |  |  | $ | — |  |  | $ | — |
Level 2(2): |  |  |  |  |  |  |  |  |  |  |  |  |
Retirement and pension plan assets | 11,112 |  |  | 1,136 |  |  |  |  | 9,976 |  |  | — |  |  | — |  |  | — |
Pension benefit obligation | (12,404) |  |  | — |  |  |  |  | — |  |  | — |  |  | (1,136) |  |  | (11,268) |
Total Level 2 | (1,292) |  |  | 1,136 |  |  |  |  | 9,976 |  |  | — |  |  | (1,136) |  |  | (11,268) |
Total | $ | 56,998 |  |  | $ | 1,136 |  |  |  |  | $ | 9,976 |  |  | $ | 58,290 |  |  | $ | (1,136) |  |  | $ | (11,268) |

(1)Level 1 – Quoted prices in active markets for identical assets and liabilities.
(2)Level 2 – Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
14

Contingent Consideration and Compensation
The former owners of certain of the Company's acquired businesses are eligible to receive additional cash consideration based on the attainment of certain operating metrics in the periods subsequent to acquisition. Contingent consideration and compensation are valued using significant inputs that are not observable in the market, which are defined as Level 3 inputs pursuant to fair value measurement accounting.
The following table provides a reconciliation of the beginning and ending balance of Level 3 liabilities for the nine months ended September 30, 2025:

|  |  |  | Earnout |  | Contingent Compensation
Balance at December 31, 2024 |  |  |  | $ | (38,648) |  |  | $ | (22,901) |
Earnout accretion |  |  |  | (1,534) |  |  | — |
Compensation expense |  |  |  | — |  |  | (7,014) |
Fair value adjustment |  |  |  | 2,315 |  |  | — |
Payments |  |  |  | — |  |  | 4,847 |
Foreign currency translation |  |  |  | (5,016) |  |  | (2,330) |
Balance at September 30, 2025 |  |  |  | $ | (42,883) |  |  | $ | (27,398) |

Earnout accruals of $42.9 million were recorded within Current liabilities - Other current liabilities as of September 30, 2025, and earnout accruals of $38.6 million were recorded within Non-current liabilities - Other non-current liabilities as of December 31, 2024. Contingent compensation accruals of $27.4 million and $4.9 million are recorded within Current liabilities - Accrued salaries and benefits as of September 30, 2025, and December 31, 2024, respectively, and contingent compensation accruals of $18.0 million are recorded within Non-current liabilities - Accrued salaries and benefits as of December 31, 2024.
Other Investments
The Company holds an equity investment that does not have a readily determinable fair value for which the Company uses the measurement alternative prescribed in FASB Accounting Standards Codification Topic 321, Investments-Equity Securities. As of September 30, 2025 and December 31, 2024, the Company held the equity investment under the measurement alternative of $11.0 million which is presented in Other non-current assets in the Condensed Consolidated Balance Sheets. There were no impairments or changes resulting from observable transactions for these investments in the nine months ended September 30, 2025 and no adjustments have been made to the carrying values as of September 30, 2025.
9. Other Current and Non-current Assets and Liabilities
The components of other current assets are as follows:

| September 30, 2025 |  | December 31, 2024
Contract assets | $ | 44,085 |  |  | $ | 33,150 |
Other | 5,631 |  |  | 6,785 |
Total other current assets | $ | 49,716 |  |  | $ | 39,935 |

The components of other current liabilities are as follows:

| September 30, 2025 |  | December 31, 2024
Earnout liability | $ | 42,883 |  |  | $ | — |
Other | 24,567 |  |  | 21,369 |
Total other current liabilities | $ | 67,450 |  |  | $ | 21,369 |

The components of other non-current liabilities are as follows:
15

| September 30, 2025 |  | December 31, 2024
Earnout liability | $ | — |  |  | $ | 38,648 |
Other | 4,380 |  |  | 4,257 |
Total other non-current liabilities | $ | 4,380 |  |  | $ | 42,905 |

10. Line of Credit
On March 17, 2025, the Company entered into the Third Amendment (the “Third Amendment”) to the Credit Agreement, dated as of October 26, 2018 (the “Credit Agreement” and, as amended by the First Amendment to Credit Agreement, dated as of July 13, 2021, and the Second Amendment, dates as of February 24, 2023, the "Amended Credit Agreement") by and among the Company, Bank of America, N.A., as administrative agent, and the lenders party thereto. The Third Amendment provides that Lenders (as defined in the Third Amendment) will make available to the Borrowers (as defined in the Third Amendment) a committed revolving credit facility in an aggregate amount of $100 million, which includes a sublimit of $25 million for letters of credit and a sublimit of $10 million for swingline loans, with a $75 million expansion feature (collectively, the “Facility”). The Amended Credit Agreement matures on March 17, 2030, extended from July 13, 2026.
Borrowings under the Credit Agreement may be used for working capital, capital expenditures, permitted acquisitions, restricted payments and for other general corporate purposes of the Company and its subsidiaries. The obligations under the Credit Agreement are guaranteed by certain of the Company’s subsidiaries and from time to time may be secured by equity interests in certain of the Company’s subsidiaries.
As of September 30, 2025, and December 31, 2024, the Company had no outstanding borrowings. As of such dates, the Company was in compliance with the financial and other covenants under the Amended Credit Agreement and no event of default existed.
11. Stock-Based Compensation and Common Stock
On May 23, 2024, the stockholders of the Company approved an amendment and restatement of the Company's Fourth Amended and Restated 2012 Heidrick & Struggles GlobalShare Program (as so amended and restated, the "Fifth A&R Program") to increase the number of shares of common stock reserved for issuance under the plan by 649,000 shares, among other things. The Fifth A&R Program provides for grants of stock options, stock appreciation rights, restricted stock units, performance stock units, and other stock-based compensation awards that are valued based upon the grant date fair value of the awards. These awards may be granted to directors, selected employees and independent contractors.
As of September 30, 2025, 5,169,027 awards have been issued under the Fifth A&R Program, including 955,707 forfeited awards, and 643,896 shares remain available for future awards assuming performance stock units vest at maximum levels. The Fifth A&R Program provides that no awards can be granted after the first annual meeting of the Company's stockholders to occur on or after May 23, 2034.
The Company measures its stock-based compensation costs based on the grant date fair value of the awards and recognizes these costs over the requisite service period.
A summary of information with respect to stock-based compensation is as follows:

| Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Salaries and benefits (1) | $ | 3,753 |  |  | $ | 5,262 |  |  | $ | 9,988 |  |  | $ | 11,132 |  |  |  |  |
General and administrative expenses | — |  |  | 202 |  |  | 1,050 |  |  | 1,252 |  |  |  |  |
Income tax benefit related to stock-based compensation included in net income | 1,021 |  |  | 1,506 |  |  | 3,003 |  |  | 3,413 |  |  |  |  |

(1) Includes $0.9 million and $1.7 million of expense related to cash-settled restricted stock units for the three months ended September 30, 2025, and 2024, respectively, and $1.6 million and $2.5 million of expense related to cash-settled restricted stock units for the nine months ended September 30, 2025, and 2024, respectively.
Restricted Stock Units
Restricted stock units granted to employees are subject to ratable vesting over a three-year or four-year period dependent upon the terms of the individual grant. Compensation expense related to service-based restricted stock units is recognized on a straight-line basis over the vesting period.
Non-employee members of the Board of Directors may elect to receive restricted stock units or shares of common stock annually pursuant to the Fifth A&R Program as part of their annual compensation. Based on their respective elections, the Company issued 17,325 and 22,126 restricted stock units for services provided by the non-employee directors during the nine months ending September 30, 2025, and 2024, respectively. Restricted stock units issued to non-employee directors remain unvested until the respective non-employee directors retire from the Board of Directors.
Restricted stock unit activity for the nine months ended September 30, 2025, is as follows:

| Number of Restricted Stock Units |  | Weighted- Average Grant-Date Fair Value
Outstanding on December 31, 2024 | 675,411 |  |  | $ | 31.85 |
Granted | 219,302 |  |  | 46.22 |
Vested and converted to common stock | (305,192) |  |  | 32.56 |
Forfeited | (26,007) |  |  | 31.18 |
Outstanding on September 30, 2025 | 563,514 |  |  | $ | 37.09 |

As of September 30, 2025, there was $11.3 million of pre-tax unrecognized compensation expense related to unvested restricted stock units, which is expected to be recognized over a weighted average of 2.1 years.
Performance Stock Units
The Company grants performance stock units to certain of its senior executives. The majority of performance stock units are subject to cliff vesting at the end of a three-year period. The vesting will vary between 0% and 200% based on the attainment of certain performance and market conditions over the three-year vesting period. For the majority of granted performance stock units, half of the award is based on the achievement of adjusted operating margin or Adjusted EBITDA margin thresholds and half of the award is based on the Company's total shareholder return, relative to a peer group. The fair value of the awards subject to total shareholder return metrics is determined using a Monte Carlo simulation model. A Monte Carlo simulation model uses stock price volatility and other variables to estimate the probability of satisfying the performance conditions and the resulting fair value of the award. The performance stock units are expensed on a straight-line basis over the three-year vesting period.
Certain of the Company's senior executives are granted performance stock units that are subject to ratable vesting over a four-year period. The vesting will vary between 0% and 100% of the shares subject to the performance stock units based on the attainment of specified stock price hurdles over the vesting period. The fair value of the awards subject to such stock price hurdles is determined using the Monte Carlo simulation model. The performance stock units are expensed on a straight-line basis over the derived service period, which ranges from one to four years.
Performance stock unit activity for the nine months ended September 30, 2025, is as follows:

| Number of Performance Stock Units |  | Weighted- Average Grant-Date Fair Value
Outstanding on December 31, 2024 | 353,076 |  |  | $ | 34.17 |
Granted | 138,331 |  |  | 52.43 |
Vested and converted to common stock | (160,636) |  |  | 43.57 |
Forfeited | (13,199) |  |  | 38.55 |
Outstanding on September 30, 2025 | 317,572 |  |  | $ | 37.19 |

As of September 30, 2025, there was $6.7 million of pre-tax unrecognized compensation expense related to unvested performance stock units, which is expected to be recognized over a weighted average of 2.0 years.
Phantom Stock Units
Phantom stock units are grants of phantom stock with respect to shares of the Company's common stock that are settled in cash and are subject to various restrictions, including restrictions on transferability, vesting and forfeiture provisions. Shares of phantom stock that do not vest for any reason will be forfeited by the recipient and will revert to the Company.
Phantom stock units are subject to vesting over a three-year or four-year period, and such vesting is subject to certain other conditions, including continued service to the Company. As a result of the cash-settlement feature of the awards, the Company classifies the awards as liability awards, which are measured at fair value at each reporting date and the vested portion of the award is recognized as a liability to the extent that the service condition is deemed probable. The fair value of the phantom stock awards on the balance sheet date is determined using the closing share price of the Company's common stock on that date.
The Company recorded phantom stock-based compensation expense of $0.9 million and $1.7 million related to cash-settled restricted stock units for the three months ended September 30, 2025, and 2024, respectively, and $1.6 million and $2.5 million of expense related to cash-settled restricted stock units for the nine months ended September 30, 2025, and 2024, respectively.
Phantom stock unit activity for the nine months ended September 30, 2025, is as follows:

| Number of Phantom Stock Units
Outstanding on December 31, 2024 | 131,177 |
Granted | 22,049 |
Vested | (64,514) |
Forfeited | (2,390) |
Outstanding on September 30, 2025 | 86,322 |

As of September 30, 2025, there was $1.1 million of pre-tax unrecognized compensation expense related to unvested phantom stock units, which is expected to be recognized over a weighted average of 2.0 years.
Common Stock
Non-employee members of the Board of Directors may elect to receive restricted stock units or shares of common stock annually pursuant to the Fifth A&R Program as part of their annual compensation, which is typically issued in the second quarter each year. The Company issued 6,930 and 12,564 shares of common stock for services provided by the non-employee directors during the nine months ended September 30, 2025, and 2024, respectively.
On February 11, 2008, the Company's Board of Directors authorized management to repurchase shares of the Company's common stock with an aggregate purchase price of up to $50.0 million (the "Repurchase Authorization"). From time to time and as business conditions warrant, the Company may purchase shares of its common stock on the open market or in negotiated or block trades. No time limit has been set for completion of this program. There were no repurchases of common stock in 2025 and 2024. Prior to 2024, the most recent purchase of the Company's shares of common stock occurred during the year ended December 31, 2023 when the Company purchased 36,000 shares of common stock for $0.9 million. As of September 30, 2025, the Company has purchased 1,074,670 shares of its common stock pursuant to the Repurchase Authorization for a total of $29.2 million and $20.8 million remains available for future purchases under the Repurchase Authorization.
16

8. Goodwill and Other Intangible Assets
Goodwill
The Company's goodwill by segment (for the segments that had recorded goodwill) is as follows:

|  | September 30, 2025 |  | December 31, 2024
Executive Search |  |  |  |
Americas |  | $ | 91,329 |  |  | $ | 90,740 |
Europe |  | 1,463 |  |  | 1,463 |
Total Executive Search |  | 92,792 |  |  | 92,203 |
On-Demand Talent |  | 109,150 |  |  | 105,136 |
Heidrick Consulting |  | 7,246 |  |  | 7,246 |
Goodwill, gross |  | 209,188 |  |  | 204,585 |
Accumulated impairment |  | (66,724) |  |  | (66,724) |
Total goodwill |  | $ | 142,464 |  |  | $ | 137,861 |

Changes in the carrying amount of goodwill by segment (for the segments that had recorded goodwill) for the nine months ended September 30, 2025, are as follows:

| Executive Search |  | On-Demand Talent |  | Heidrick Consulting |  |
| Americas |  | Europe |  |  |  |  |  | Total
Goodwill | $ | 90,740 |  |  | $ | 1,463 |  |  |  |  | $ | 105,136 |  |  | $ | 7,246 |  |  | $ | 204,585 |
Accumulated impairment losses | — |  |  | (1,463) |  |  |  |  | (58,015) |  |  | (7,246) |  |  | (66,724) |
Balance at December 31, 2024 | 90,740 |  |  | — |  |  |  |  | 47,121 |  |  | — |  |  | 137,861 |
Foreign currency translation | 589 |  |  | — |  |  |  |  | 4,014 |  |  | — |  |  | 4,603 |
Goodwill | 91,329 |  |  | 1,463 |  |  |  |  | 109,150 |  |  | 7,246 |  |  | 209,188 |
Accumulated impairment losses | — |  |  | (1,463) |  |  |  |  | (58,015) |  |  | (7,246) |  |  | (66,724) |
Balance at September 30, 2025 | $ | 91,329 |  |  | $ | — |  |  |  |  | $ | 51,135 |  |  | $ | — |  |  | $ | 142,464 |

During the three months ended June 30, 2024, as a result of the Company's mid-year forecasting process, it was determined that a reduction in the On-Demand Talent reporting unit forecast was required. Due to the reduction in the forecasted results for the reporting unit, in addition to the 6% passing margin in the most recent impairment analysis conducted as of October 31, 2023, the Company determined that it was more likely than not that the fair value of the reporting unit was less than its carrying value. As a result, the Company identified a triggering event and performed an interim goodwill impairment evaluation during the three months ended June 30, 2024.
During the three months ended December 31, 2024, the Company conducted its annual goodwill impairment evaluation as of October 31, 2024, in accordance with ASU No. 2017-04, Intangibles - Goodwill and Other. The goodwill impairment test is completed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value of the reporting unit exceeds its fair value; however, the loss recognized is not to exceed the total amount of goodwill allocated to that reporting unit.
Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions to evaluate the impact of operating and macroeconomic changes on each reporting unit. During the impairment evaluation process, the Company used a discounted cash flow methodology to estimate the fair value of each of its reporting units. The discounted cash flow approach is dependent on a number of factors, including estimates of future market growth and trends, forecasted revenue and costs, capital investments, appropriate discount rates, certain assumptions to allocate shared costs, assets and liabilities, historical and projected performance of the reporting unit, and the macroeconomic conditions affecting each of the Company’s reporting units. The assumptions used in the determination of fair value were (1) a forecast of growth in the near and long term; (2) the discount rate; (3) a forecast of operating expense growth in the near and long term. As part of the goodwill impairment evaluation, the Company performed a reconciliation of its market capitalization to the aggregated estimated fair value of all reporting units, including consideration of a control premium.
17

Based on the results of the 2024 interim impairment evaluation, the Company determined that the goodwill within the On-Demand Talent and Europe reporting units were impaired, which resulted in impairment charges of $14.8 million and $1.5 million, respectively. The impairment charges are recorded within Impairment charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024. The impairments were non-cash in nature and they did not affect the Company's current liquidity, cash flows, borrowing capability or operations; nor did it impact the debt covenants under the Company's credit agreement.
Based on the results of the 2024 annual impairment evaluation, the Company determined that goodwill within the On-Demand Talent reporting unit was impaired, which resulted in an impairment charge of $43.3 million to write-off the goodwill related to the excess book value compared to fair value.
Other Intangible Assets, net
The Company’s other intangible assets, net by segment, are as follows:

|  | September 30, 2025 |  | December 31, 2024
Executive Search |  |  |  |
Americas |  | $ | — |  |  | $ | 5 |
Europe |  | 11 |  |  | 37 |
Total Executive Search |  | 11 |  |  | 42 |
On-Demand Talent |  | 7,633 |  |  | 10,592 |
Heidrick Consulting |  | 1,305 |  |  | 1,849 |
Total other intangible assets, net |  | $ | 8,949 |  |  | $ | 12,483 |

The carrying amount of amortizable intangible assets and the related accumulated amortization are as follows:

| Weighted Average Life (Years) |  | September 30, 2025 |  | December 31, 2024
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Client relationships | 11.0 |  | $ | 27,370 |  |  | $ | (19,347) |  |  | $ | 8,023 |  |  | $ | 25,188 |  |  | $ | (15,371) |  |  | $ | 9,817 |
Trade name | 3.0 |  | 5,229 |  |  | (4,955) |  |  | 274 |  |  | 4,836 |  |  | (4,039) |  |  | 797 |
Software | 3.0 |  | 8,977 |  |  | (8,325) |  |  | 652 |  |  | 8,285 |  |  | (6,416) |  |  | 1,869 |
Total intangible assets | 10.1 |  | $ | 41,576 |  |  | $ | (32,627) |  |  | $ | 8,949 |  |  | $ | 38,309 |  |  | $ | (25,826) |  |  | $ | 12,483 |

Intangible asset amortization expense for the three months ended September 30, 2025, and 2024, was $1.6 million and $2.0 million, respectively. Intangible asset amortization expense for the nine months ended September 30, 2025, and 2024, was $4.9 million and $6.2 million, respectively.
The Company's estimated future amortization expense related to intangible assets as of September 30, 2025, for the following years ended December 31, is as follows:

2025 | $ | 1,525 |
2026 | 2,647 |
2027 | 1,605 |
2028 | 934 |
2029 | 674 |
Thereafter | 1,564 |
Total | $ | 8,949 |

18

12. Restructuring
During the year ended December 31, 2024, the Company implemented a restructuring plan (the "2024 Plan") to optimize future growth and profitability through a workforce reduction. The Company did not incur any such charges related to the implementation of the 2024 Plan during the nine months ended September 30, 2025.
Restructuring charges incurred to date for the 2024 Plan by type of charge and reportable segment are as follows:

| Executive Search |  |  |  |  |  |  |  |
| Americas |  | Europe |  | Asia Pacific |  | On-Demand Talent |  | Heidrick Consulting |  | Global Operations Support |  | Total
Employee related | $ | 1,277 |  |  | $ | 876 |  |  | $ | 157 |  |  | $ | 286 |  |  | $ | 3,367 |  |  | $ | 976 |  |  | $ | 6,939 |

Changes in the restructuring accrual for the nine months ended September 30, 2025, were as follows:

|  | Employee Related |  |  |  |  |  |
Accrual balance at December 31, 2024 |  | 2,506 |  |  |  |  |  |  |
Cash payments |  | (1,881) |  |  |  |  |  |  |
Accrual balance at September 30, 2025 |  | $ | 625 |  |  |  |  |  |  |

Restructuring accruals are recorded within current Accrued salaries and benefits in the Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024.
13. Income Taxes
The Company reported income before taxes of $26.5 million and an income tax provision of $8.8 million for the three months ended September 30, 2025. The Company reported income before taxes of $21.1 million and an income tax provision of $6.3 million for the three months ended September 30, 2024. The effective tax rates for the three months ended September 30, 2025, and 2024, were 33.4% and 29.7%, respectively. The effective tax rate for the three months ended September 30, 2025 was impacted by the mix of income and the tax effect on discrete items. The effective tax rate for the three months ended September 30, 2024 was impacted by the mix of income and the tax effect on discrete items.
The Company reported income before taxes of $75.2 million and an income tax provision of $23.2 million for the nine months ended September 30, 2025. The Company reported income before taxes of $43.5 million and an income tax provision of $19.8 million for the nine months ended September 30, 2024. The effective tax rates for the nine months ended September 30, 2025, and 2024, were 30.9% and 45.5%, respectively. The effective tax rate for the nine months ended September 30, 2025, was impacted by the mix of income and the tax effect on discrete items. The effective tax rate for the nine months ended September 30, 2024 was impacted by the tax effect on goodwill impairment and the mix of income
On July 4, 2025, the "One Big Beautiful Bill Act" (OBBBA) was signed into law in the United States. The OBBBA contains several changes to corporate taxation, including the extension of multiple tax provisions from the 2017 Tax Cuts and Jobs Act that were scheduled to expire in 2025. The Company is currently evaluating the impact of the new legislation but does not expect it to have a material impact on the results of operations.
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14. Changes in Accumulated Other Comprehensive Income (Loss)
The changes in Accumulated other comprehensive income (loss) (“AOCI”) by component for the nine months ended September 30, 2025, are as follows:

|  | Available- for- Sale Securities |  | Foreign Currency Translation |  | Pension |  | AOCI
Balance at December 31, 2024 |  | $ | 53 |  |  | $ | (13,770) |  |  | $ | (328) |  |  | $ | (14,045) |
Other comprehensive income (loss) before reclassification, net of tax |  | (20) |  |  | 8,780 |  |  | — |  |  | 8,760 |
Balance at September 30, 2025 |  | $ | 33 |  |  | $ | (4,990) |  |  | $ | (328) |  |  | $ | (5,285) |

15. 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. The Company's operating segments are based on the organizational structure for which financial results are regularly reviewed by our chief operating decision-maker to evaluate performance and allocate resources.
Executive Search partners with our clients - respected organizations across the globe - to help them build and sustain the best leadership teams in the world, with a specialized focus on the placement of top-level senior executives.
On-Demand Talent provides clients seamless on-demand access to top independent talent, including professionals with deep industry and functional expertise for interim leadership roles and critical, project-based initiatives.
Heidrick Consulting partners with organizations to unlock the power of their people. The Company's tools and experts use data and technology designed to bring science to the art of human capital development and organizational design. Our services allow our clients to accelerate their strategies and the effectiveness of individual leaders, teams and organizations as a whole.
The Company's chief operating decision-maker is its Chief Executive Officer. The Company evaluates performance and allocates resources based on the review of the chief operating decision maker ("CODM") of (1) net revenue and (2) net income before interest, 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, transaction fees, impairment charges and restructuring charges ("Adjusted EBITDA"). Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of net revenue in the same period. The CODM considers actual to historical, actual to budgeted, and actual to forecasted results and variances on a monthly basis using net revenue and Adjusted EBITDA when making decisions about allocating resources to the segments and assessing performance. The CODM is not provided asset information by reportable segment.
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP (as defined below) financial measures. The following table presents a reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA margin:
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|  | Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
|  | 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
Revenue before reimbursements (net revenue) |  | $ | 322,837 |  |  | $ | 278,559 |  |  | $ | 923,663 |  |  | $ | 822,382 |  |  |  |  |
Net income |  | 17,646 |  |  | 14,829 |  |  | 52,025 |  |  | 23,704 |  |  |  |  |
Interest, net |  | (3,436) |  |  | (2,570) |  |  | (10,030) |  |  | (9,268) |  |  |  |  |
Other, net |  | (3,884) |  |  | 555 |  |  | (4,594) |  |  | (3,013) |  |  |  |  |
Provision for income taxes |  | 8,835 |  |  | 6,268 |  |  | 23,218 |  |  | 19,750 |  |  |  |  |
Operating income |  | 19,161 |  |  | 19,082 |  |  | 60,619 |  |  | 31,173 |  |  |  |  |
Adjustments |  |  |  |  |  |  |  |  |  |  |  |
Depreciation |  | 3,760 |  |  | 2,997 |  |  | 10,367 |  |  | 7,480 |  |  |  |  |
Intangible amortization |  | 1,623 |  |  | 1,953 |  |  | 4,878 |  |  | 6,170 |  |  |  |  |
Earnout accretion |  | 517 |  |  | 478 |  |  | 1,534 |  |  | 1,413 |  |  |  |  |
Earnout fair value adjustments |  | — |  |  | — |  |  | (2,315) |  |  | 1,211 |  |  |  |  |
Acquisition contingent compensation |  | 2,627 |  |  | 2,947 |  |  | 7,014 |  |  | 8,220 |  |  |  |  |
Deferred compensation plan |  | 3,895 |  |  | 2,958 |  |  | 8,735 |  |  | 6,264 |  |  |  |  |
Reorganization costs |  | 911 |  |  | — |  |  | 4,636 |  |  | — |  |  |  |  |
Transaction fees |  | 1,750 |  |  | — |  |  | 1,750 |  |  | — |  |  |  |  |
Impairment charges |  | — |  |  | — |  |  | — |  |  | 16,224 |  |  |  |  |
Restructuring charges |  | — |  |  | — |  |  | — |  |  | 6,939 |  |  |  |  |
Total adjustments |  | 15,083 |  |  | 11,333 |  |  | 36,599 |  |  | 53,921 |  |  |  |  |
Adjusted EBITDA |  | $ | 34,244 |  |  | $ | 30,415 |  |  | $ | 97,218 |  |  | $ | 85,094 |  |  |  |  |
Adjusted EBITDA margin |  | 10.6 | % |  | 10.9 | % |  | 10.5 | % |  | 10.3 | % |  |  |  |

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The following tables present our segment information, including significant segment expenses, for the three and nine months ended September 30, 2025, and 2024:

| Three Months Ended September 30, 2025
| Executive Search |  |  |  |  |  |
| Americas |  | Europe |  | Asia Pacific |  | On-Demand Talent |  | Heidrick Consulting |  | Total
Revenue |  |  |  |  |  |  |  |  |  |  |
Revenue before reimbursements | $ | 162,508 |  |  | $ | 50,927 |  |  | $ | 25,648 |  |  | $ | 50,910 |  |  | $ | 32,844 |  |  | $ | 322,837 |
Reimbursements |  |  |  |  |  |  |  |  |  |  | 5,059 |
Total revenue |  |  |  |  |  |  |  |  |  |  | 327,896 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |
Salaries and benefits (1) | 102,085 |  |  | 36,842 |  |  | 19,804 |  |  | 12,342 |  |  | 24,945 |  |  | 196,018 |
General and administrative (2) | 11,530 |  |  | 7,507 |  |  | 4,084 |  |  | 2,506 |  |  | 5,344 |  |  | 30,971 |
Cost of services | — |  |  | — |  |  | — |  |  | 33,225 |  |  | 4,419 |  |  | 37,644 |
Total segment operating expenses | 113,615 |  |  | 44,349 |  |  | 23,888 |  |  | 48,073 |  |  | 34,708 |  |  | 264,633 |
Segment Adjusted EBITDA | 48,893 |  |  | 6,578 |  |  | 1,760 |  |  | 2,837 |  |  | (1,864) |  |  | 58,204 |
Less: Reconciling Items |  |  |  |  |  |  |  |  |  |  |
Research and development expenses (3) |  |  |  |  |  |  |  |  |  |  | 4,615 |
Global Operations Support expenses (3) |  |  |  |  |  |  |  |  |  |  | 19,345 |
Total reconciling expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 23,960 |
Adjusted EBITDA | $ | 48,893 |  |  | $ | 6,578 |  |  | $ | 1,760 |  |  | $ | 2,837 |  |  | $ | (1,864) |  |  | $ | 34,244 |

| Three Months Ended September 30, 2024
| Executive Search |  |  |  |  |  |
| Americas |  | Europe |  | Asia Pacific |  | On-Demand Talent |  | Heidrick Consulting |  | Total
Revenue |  |  |  |  |  |  |  |  |  |  |
Revenue before reimbursements | $ | 134,545 |  |  | $ | 43,143 |  |  | $ | 26,701 |  |  | $ | 46,231 |  |  | $ | 27,939 |  |  | $ | 278,559 |
Reimbursements |  |  |  |  |  |  |  |  |  |  | 4,256 |
Total revenue |  |  |  |  |  |  |  |  |  |  | 282,815 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |
Salaries and benefits (1) | 83,814 |  |  | 31,511 |  |  | 17,752 |  |  | 11,751 |  |  | 21,317 |  |  | 166,145 |
General and administrative (2) | 10,266 |  |  | 6,610 |  |  | 3,702 |  |  | 3,745 |  |  | 5,589 |  |  | 29,912 |
Cost of services | — |  |  | — |  |  | — |  |  | 28,972 |  |  | 2,058 |  |  | 31,030 |
Total segment operating expenses | 94,080 |  |  | 38,121 |  |  | 21,454 |  |  | 44,468 |  |  | 28,964 |  |  | 227,087 |
Segment Adjusted EBITDA | 40,465 |  |  | 5,022 |  |  | 5,247 |  |  | 1,763 |  |  | (1,025) |  |  | 51,472 |
Less: Reconciling Items |  |  |  |  |  |  |  |  |  |  |
Research and development expenses (3) |  |  |  |  |  |  |  |  |  |  | 4,606 |
Global Operations Support expenses (3) |  |  |  |  |  |  |  |  |  |  | 16,451 |
Total reconciling expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 21,057 |
Adjusted EBITDA | $ | 40,465 |  |  | $ | 5,022 |  |  | $ | 5,247 |  |  | $ | 1,763 |  |  | $ | (1,025) |  |  | $ | 30,415 |

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| Nine Months Ended September 30, 2025
| Executive Search |  |  |  |  |  |
| Americas |  | Europe |  | Asia Pacific |  | On-Demand Talent |  | Heidrick Consulting |  | Total
Revenue |  |  |  |  |  |  |  |  |  |  |
Revenue before reimbursements | $ | 467,082 |  |  | $ | 148,769 |  |  | $ | 74,796 |  |  | $ | 141,340 |  |  | $ | 91,676 |  |  | $ | 923,663 |
Reimbursements |  |  |  |  |  |  |  |  |  |  | 13,583 |
Total revenue |  |  |  |  |  |  |  |  |  |  | 937,246 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |
Salaries and benefits (1) | 292,072 |  |  | 107,919 |  |  | 55,929 |  |  | 35,186 |  |  | 69,290 |  |  | 560,396 |
General and administrative (2) | 35,240 |  |  | 23,842 |  |  | 11,565 |  |  | 10,890 |  |  | 14,493 |  |  | 96,030 |
Cost of services | — |  |  | — |  |  | — |  |  | 90,999 |  |  | 11,298 |  |  | 102,297 |
Total segment operating expenses | 327,312 |  |  | 131,761 |  |  | 67,494 |  |  | 137,075 |  |  | 95,081 |  |  | 758,723 |
Segment Adjusted EBITDA | 139,770 |  |  | 17,008 |  |  | 7,302 |  |  | 4,265 |  |  | (3,405) |  |  | 164,940 |
Less: Reconciling Items |  |  |  |  |  |  |  |  |  |  |
Research and development expenses (3) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 13,877 |
Global Operations Support expenses (3) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 53,845 |
Total reconciling expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 67,722 |
Adjusted EBITDA | $ | 139,770 |  |  | $ | 17,008 |  |  | $ | 7,302 |  |  | $ | 4,265 |  |  | $ | (3,405) |  |  | $ | 97,218 |

| Nine Months Ended September 30, 2024
| Executive Search |  |  |  |  |  |
| Americas |  | Europe |  | Asia Pacific |  | On-Demand Talent |  | Heidrick Consulting |  | Total
Revenue |  |  |  |  |  |  |  |  |  |  |
Revenue before reimbursements | $ | 418,302 |  |  | $ | 124,706 |  |  | $ | 72,829 |  |  | $ | 125,983 |  |  | $ | 80,562 |  |  | $ | 822,382 |
Reimbursements |  |  |  |  |  |  |  |  |  |  | 12,408 |
Total revenue |  |  |  |  |  |  |  |  |  |  | 834,790 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |
Salaries and benefits (1) | 254,673 |  |  | 90,794 |  |  | 50,706 |  |  | 34,719 |  |  | 60,477 |  |  | 491,369 |
General and administrative (2) | 33,181 |  |  | 22,697 |  |  | 11,941 |  |  | 11,564 |  |  | 16,861 |  |  | 96,244 |
Cost of services | — |  |  | — |  |  | — |  |  | 80,487 |  |  | 7,671 |  |  | 88,158 |
Total segment operating expenses | 287,854 |  |  | 113,491 |  |  | 62,647 |  |  | 126,770 |  |  | 85,009 |  |  | 675,771 |
Segment Adjusted EBITDA | 130,448 |  |  | 11,215 |  |  | 10,182 |  |  | (787) |  |  | (4,447) |  |  | 146,611 |
Less: Reconciling Items |  |  |  |  |  |  |  |  |  |  |
Research and development expenses (3) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 14,312 |
Global Operations Support expenses (3) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 47,205 |
Total reconciling expenses | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 61,517 |
Adjusted EBITDA | $ | 130,448 |  |  | $ | 11,215 |  |  | $ | 10,182 |  |  | $ | (787) |  |  | $ | (4,447) |  |  | $ | 85,094 |

(1) Includes base salaries, payroll taxes, retirement benefits, separation and stock-based compensation. Excludes contingent compensation, deferred compensation plan income or expense and reorganization costs as these income/expense items are not included within the Company's measure of segment profitability.
(2) Includes professional fees, business development travel, information technology, communication services, marketing, taxes and licenses, temporary labor, bad debt, and other operating expenses. Excludes depreciation, intangible amortization, earnout accretion and earnout fair value adjustments as these income/expense items are not included within the Company's measure of segment profitability.
(3) Excludes depreciation expense, deferred compensation plan income expense, and transaction fees as these income/expense items are not included within the Company's measure of segment profitability.
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Depreciation and amortization, and capital expenditures, by segment, are as follows:

|  | Three Months Ended September 30, |  | Nine Months Ended September 30, 2025
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Depreciation and amortization |  |  |  |  |  |  |  |
Executive Search |  |  |  |  |  |  |  |
Americas |  | $ | 718 |  |  | $ | 746 |  |  | $ | 1,888 |  |  | $ | 2,232 |
Europe |  | 411 |  |  | 409 |  |  | 1,274 |  |  | 746 |
Asia Pacific |  | 254 |  |  | 252 |  |  | 748 |  |  | 569 |
Total Executive Search |  | 1,383 |  |  | 1,407 |  |  | 3,910 |  |  | 3,547 |
On-Demand Talent |  | 1,521 |  |  | 1,735 |  |  | 4,495 |  |  | 5,351 |
Heidrick Consulting |  | 602 |  |  | 603 |  |  | 1,707 |  |  | 1,694 |
Total segments |  | 3,506 |  |  | 3,745 |  |  | 10,112 |  |  | 10,592 |
Research and development |  | 1,737 |  |  | 1,029 |  |  | 4,675 |  |  | 2,592 |
Global Operations Support |  | 140 |  |  | 176 |  |  | 458 |  |  | 466 |
Total depreciation and amortization |  | $ | 5,383 |  |  | $ | 4,950 |  |  | $ | 15,245 |  |  | $ | 13,650 |
Capital expenditures |  |  |  |  |  |  |  |
Executive Search |  |  |  |  |  |  |  |
Americas |  | $ | 1,873 |  |  | $ | 2,647 |  |  | $ | 3,473 |  |  | $ | 3,679 |
Europe |  | 840 |  |  | 768 |  |  | 1,874 |  |  | 11,512 |
Asia Pacific |  | 103 |  |  | 707 |  |  | 200 |  |  | 1,713 |
Total Executive Search |  | 2,816 |  |  | 4,122 |  |  | 5,547 |  |  | 16,904 |
On-Demand Talent |  | 159 |  |  | 196 |  |  | 339 |  |  | 376 |
Heidrick Consulting |  | 361 |  |  | — |  |  | 489 |  |  | 12 |
Total segments |  | 3,336 |  |  | 4,318 |  |  | 6,375 |  |  | 17,292 |
Research and development |  | 2,145 |  |  | 2,171 |  |  | 5,597 |  |  | 5,265 |
Global Operations Support |  | 20 |  |  | 15 |  |  | 169 |  |  | 485 |
Total capital expenditures |  | $ | 5,501 |  |  | $ | 6,504 |  |  | $ | 12,141 |  |  | $ | 23,042 |

16. Guarantees
The Company has utilized letters of credit to support certain obligations, primarily for its office lease agreements. The letters of credit were made to secure the respective agreements and are for the terms of the agreements, which extend through 2034. For each letter of credit issued, the Company would have to use cash to fulfill the obligation if there is a default on a payment. The maximum amount of undiscounted payments the Company would be required to make in the event of default on all outstanding letters of credit is approximately $4.8 million as of September 30, 2025. The Company has not accrued for these arrangements as no event of default exists or is expected to exist.
17. Commitments and Contingencies
Litigation
The Company has contingent liabilities from various pending claims and litigation matters arising in the ordinary course of the Company’s business, some of which involve claims for damages that are substantial in amount. Some of these matters are covered in part by insurance. Based upon information currently available, the Company believes the ultimate resolution of such claims and litigation will not have a material adverse effect on its financial condition, results of operations or liquidity.
18. Subsequent Event
Proposed Merger with Heron BidCo, LLC
On October 5, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Heron BidCo, LLC, a Delaware limited liability company (“Parent”), and Heron Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Parent (“Merger Sub”). Pursuant to, and subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly-owned subsidiary of Parent (the “Merger”).
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At the effective time of the Merger (the “Effective Time”), each share of common stock of the Company, par value $0.01 per share (collectively, the “Shares”), issued and outstanding as of immediately prior to the Effective Time, subject to certain exceptions, will be converted automatically into the right to receive $59.00 in cash, without interest (the “Merger Consideration”). The Merger Agreement provides that, immediately prior to the Effective Time (but contingent upon the Effective Time), each restricted stock unit, whether cash-settled or stock-settled, whether vested or unvested (each, a “Company RSU), and each performance share unit (each, a “Company PSU”), in each case, granted under the Fifth Amended and Restated Heidrick & Struggles 2012 Globalshare Program (as in effect from time to time and any predecessor plans thereto), that is outstanding immediately prior to the Effective Time, will be canceled in exchange for the right to receive an amount in cash (without interest, and subject to deduction for any required tax withholding) equal to the sum of (x) the product of (i) the Merger Consideration and (ii) the number of Shares subject to such Company RSU or Company PSU (in the case of Company PSUs, at the applicable performance level set forth in the Merger Agreement) and (y) the amount of dividends credited and not yet paid to the award holder in respect of such Company RSU or Company PSU (in the case of Company PSUs, at the applicable performance level set forth in the Merger Agreement).
The Merger Agreement and the transactions contemplated thereby, including the Merger, have been unanimously approved by the board of directors of the Company. Consummation of the Merger is subject to certain customary closing conditions, including, among other things, receipt of Company stockholder approval and applicable regulatory approvals.
If the Merger is consummated, the Shares will be delisted from the Nasdaq Stock Market and deregistered under the Securities Exchange Act of 1934, as amended. For additional information, see the full text of the Merger Agreement attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 6, 2025.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations as well as other sections of this quarterly report on Form 10-Q contain forward-looking statements within the meaning of the federal securities laws, including expectations regarding the Company's One Heidrick strategy and associated investment initiatives. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Forward-looking statements, including any statements about the benefits and expectations with respect to the transactions contemplated by the Merger Agreement (as defined below), are not historical facts or guarantees of future performance, but instead represent only our beliefs, assumptions, expectations, estimates, forecasts and projections regarding future events, many of which, by their nature, are inherently uncertain and outside our control. Forward-looking statements may be identified by the use of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “outlook,” “projects,” “forecasts,” "aim," and similar expressions. These statements include statements other than historical information or statements of current condition and may relate to our future plans and objectives and results. By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements.
Factors that may cause actual outcomes and results to differ materially from what is expressed, forecasted or implied in the forward-looking statements include, among other things, our ability to attract, integrate, develop, manage, retain and motivate qualified consultants and senior leaders; our ability to prevent our consultants from taking our clients with them to another firm; our ability to maintain our professional reputation and brand name; our clients’ ability to restrict us from recruiting their employees; our heavy reliance on information management systems; risks arising from our implementation of new technology and intellectual property to deliver new products and services to our clients; our dependence on third parties for the execution of certain critical functions; the fact that we face the risk of liability in the services we perform; the fact that data security, data privacy and data protection laws and other evolving regulations and cross-border data transfer restrictions may limit the use of our services and adversely affect our business; any challenges to the classification of our on-demand talent as independent contractors; the fact that increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted cyber-related attacks could pose a risk to our systems, networks, solutions, services and data; the fact that our net revenue may be affected by adverse macroeconomic or labor market conditions, including impacts of inflation and effects of geopolitical instability; the aggressive competition we face; the impact of foreign currency exchange rate fluctuations; our ability to access additional credit; social, political, regulatory, legal and economic risks in markets where we operate, including the impact of the ongoing war in Ukraine, the conflict between Israel and Hamas and any broader regional conflict in the Middle East, the risks of an expansion or escalation of those conflicts and our ability to quickly and completely recover from any disruption to our business; the impact from actions by the U.S. presidential administration and Congress; unfavorable tax law changes and tax authority rulings; our ability to realize the benefit of our net deferred tax assets; the fact that we may not be able to align our cost structure with net revenue; any impairment of our goodwill, other intangible assets and other long-lived assets; our ability to maintain an effective system of disclosure controls and internal control over our financial reporting and produce accurate and timely financial statements; our ability to execute and integrate future acquisitions; the fact that we have anti-takeover provisions that make an acquisition of us difficult and expensive; risks and uncertainties relating to the transactions contemplated by the Merger Agreement (as defined below), including the occurrence of any event, change, or other circumstance that could give rise to the right of one or both of the parties to terminate the Merger Agreement; the possibility that the Merger (as defined below) and the related transactions do not close when expected or at all because required regulatory, stockholder, or other approvals and other conditions to closing are not waived, received or satisfied on a timely basis or at all; the risk that the benefits from the Merger may not be fully realized; and the diversion of management’s attention and time to the Merger from ongoing business operations and opportunities. We caution the reader that the list of factors may not be exhaustive. For more information on the factors that could affect the outcome of forward-looking statements, refer to our Annual Report on Form 10-K for the year ended December 31, 2024, under the heading "Risk Factors" in Item 1A, and any subsequent Company filings with the Securities and Exchange Commission ("SEC"). We caution the reader that the list of factors may not be exhaustive. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Executive Overview
Our Business. Heidrick & Struggles International, Inc. (the "Company," "we," "us," or "our") is a human capital leadership advisory firm providing executive search, consulting and on-demand talent services to businesses and business leaders worldwide to help them improve the effectiveness of their leadership teams. We provide our services to a broad range of clients through the expertise of over 500 consultants located in major cities around the world. The Company and its predecessors have been leadership advisors for more than 70 years.
Our service offerings include the following:
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Executive Search. We partner with our clients, respected organizations across the globe, to help them build and sustain the best leadership teams in the world, with a specialized focus on the placement of top-level senior executives. Through our unique relationship-based, data-driven approach, we help our clients find the right leaders, set them up for success, and accelerate their performance and that of their teams.
We believe focusing on top-level senior executives offers several competitive advantages including access to and influence with key decision makers, increased potential for recurring search and consulting engagements, higher fees per search engagement, enhanced brand visibility, and a leveraged global footprint. Working at the top of client organizations also facilitates the attraction and retention of high-caliber consultants who desire to serve top industry executives and their leadership needs. Our executive search services derive revenue through the fees generated for each search engagement, which generally are based on the annual compensation for the placed executive. We provide our executive search services primarily on a retained basis.
We employ a global approach to executive search built on better insights, more data and faster decision making facilitated by the use of our Heidrick Leadership Framework and Heidrick Connect. Our Heidrick Leadership Framework allows clients to holistically evaluate a candidate's pivotal experience and expertise, leadership capabilities, agility and potential, and culture fit and impact, thereby allowing our clients to find the right person for the role. We supplement our Heidrick Leadership Framework through a series of additional online tools including our Leadership Accelerator, Leadership Signature and Culture Signature assessments. Heidrick Connect, a completely digital, always available client experience portal, allows our clients to access talent insights for each engagement, including the Heidrick Leadership Framework and other internally developed assessment tools. In response to working remotely, our Executive Search teams employed Heidrick Connect to operate effectively and efficiently while engaging virtually with our clients. Additionally, we have introduced upgrades to Heidrick Connect, resulting in greater flexibility, increased productivity and the ability to deliver more insights to our clients.
The executive search industry consists of several thousand executive search firms worldwide. Executive search firms are generally separated into two broad categories: retained search and contingency search. Retained executive search firms fulfill their clients’ senior leadership needs by identifying potentially qualified candidates and assisting clients in evaluating and assessing these candidates. Retained executive search firms generally are compensated for their services regardless of whether the client employs a candidate identified by the search firm and are generally retained on an exclusive basis. Typically, retained executive search firms are paid a retainer for their services equal to approximately one-third of the estimated first year compensation for the position to be filled. In addition, if the actual compensation of a placed candidate exceeds the estimated compensation, executive search firms often are authorized to bill the client for one-third of the excess. In contrast, contingency search firms are compensated only upon successfully placing a recommended candidate.
We are a retained executive search firm. Our search process typically consists of the following steps:
•Analyzing the client’s business needs in order to understand its organizational structure, relationships and culture, advising the client as to the required set of skills and experiences for the position, and identifying with the client the other characteristics desired of the successful candidate;
•Selecting, contacting, interviewing and evaluating candidates on the basis of experience and potential cultural fit with the client organization;
•Presenting confidential written reports on the candidates who potentially fit the position specification;
•Scheduling a mutually convenient meeting between the client and each candidate;
•Completing reference checks on the final candidate selected by the client; and
•Assisting the client in structuring compensation packages and supporting the successful candidate’s integration into the client team.
On-Demand Talent. Our on-demand talent services provide clients seamless on-demand access to top independent talent, including professionals with deep industry and functional expertise for interim leadership roles and critical, project-based initiatives. Our unique model delivers the right independent talent on demand by blending proprietary data and technology with a dedicated Talent Solutions team.
Heidrick Consulting. We partner with organizations through Heidrick Consulting to unlock the power of their people. Our tools and experts use data and technology designed to bring science to the art of human capital development and organizational
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design. Our services allow our clients to accelerate their strategies and the effectiveness of individual leaders, teams and organizations as a whole.
Heidrick Consulting offers our clients impactful approaches to human capital development through a myriad of solutions, ranging from leadership assessment and development, team and organization acceleration, digital acceleration and innovation, diversity and inclusion advisory services, and culture shaping. Applying our deep understanding of the behaviors and attributes of leaders across many of the world’s premier companies, we guide our clients as they build a thriving culture of future-ready leadership. These premium services and offerings, which complement our Executive Search expertise, significantly contribute to our ability to deliver a full-service human capital consulting solution to our clients.
Our consulting services generate revenue primarily through the professional fees generated for each engagement which are generally based on the size of the project and scope of services. Our Heidrick Consulting teams have integrated new digital solutions for Leadership Assessments, Team Acceleration, and Organization and Culture Acceleration that can be delivered virtually.
We also remain focused on expanding our revenue streams beyond our executive search business through the investment in the diversification of our product offerings, namely through aligning our financial and talent resources to our strategic priorities.
Proposed Merger with Heron BidCo, LLC
As previously announced on October 6, 2025, we entered into an agreement and plan of merger (the “Merger Agreement”) with Heron BidCo, LLC, a Delaware limited liability company (“Parent”), and Heron Merger Sub, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of Parent (“Merger Sub”). Pursuant to, and subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and becoming a wholly-owned subsidiary of Parent (the “Merger”). Consummation of the Merger and the related transactions are subject to stockholder approval and other customary closing conditions, including regulatory approvals.
At the effective time of the Merger (the “Effective Time”), each share of common stock of the Company, par value $0.01 per share (collectively, the “Shares”), issued and outstanding as of immediately prior to the Effective Time, subject to certain exceptions, will be converted automatically into the right to receive $59.00 in cash, without interest (the “Merger Consideration”). The Merger Agreement provides that, immediately prior to the Effective Time (but contingent upon the Effective Time), each restricted stock unit, whether cash-settled or stock-settled, whether vested or unvested (each, a “Company RSU), and each performance share unit (each, a “Company PSU”), in each case, granted under the Fifth Amended and Restated Heidrick & Struggles 2012 Globalshare Program (as in effect from time to time and any predecessor plans thereto), that is outstanding immediately prior to the Effective Time, will be canceled in exchange for the right to receive an amount in cash (without interest, and subject to deduction for any required tax withholding) equal to the sum of (x) the product of (i) the Merger Consideration and (ii) the number of Shares subject to such Company RSU or Company PSU (in the case of Company PSUs, at the applicable performance level set forth in the Merger Agreement) and (y) the amount of dividends credited and not yet paid to the award holder in respect of such Company RSU or Company PSU (in the case of Company PSUs, at the applicable performance level set forth in the Merger Agreement).
If the Merger is consummated, the Shares will be delisted from the Nasdaq Stock Market and deregistered under the Securities Exchange Act of 1934, as amended. The foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement which is filed as Exhibit 2.1 to our Current Report on Form 8-K filed with the SEC on October 6, 2025.
Key Performance Indicators
We manage and assess our performance through various means, with primary financial and operational measures including net revenue, Adjusted EBITDA and Adjusted EBITDA margin. These non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, any measure of performance prepared in accordance with United States generally accepted accounting principles ("GAAP"). Executive Search and Heidrick Consulting performance is also measured using consultant headcount. Specific to Executive Search, confirmed search (confirmation) trends, consultant productivity and average revenue per search are used to measure performance. Productivity is as measured by annualized Executive Search net revenue per consultant.
Revenue is driven by market conditions and a combination of the number of executive search engagements, consulting projects, on-demand projects and the average revenue per search or project. With the exception of compensation expense and cost of sales, incremental increases in revenue do not necessarily result in proportionate increases in costs, particularly
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operating and administrative expenses, thus creating the potential to improve Adjusted EBITDA and Adjusted EBITDA margin.
The number of consultants, confirmation trends, number of searches or projects completed, productivity levels and the average revenue per search or project will vary from quarter to quarter, affecting net revenue, Adjusted EBITDA and Adjusted EBITDA margin.
The Company evaluates performance and allocates resources based on the CODM’s review of (1) net revenue and (2) net income before interest, 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, transaction fees, impairment charges and restructuring charges, or Adjusted EBITDA. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenue in the same period.
Consolidated and the subtotal of Executive Search Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and have limitations as analytical tools. They should not be viewed as a substitute for financial information determined in accordance with GAAP and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. In addition, they may not necessarily be comparable to non-GAAP performance measures that may be presented by other companies.
We believe the presentation of these non-GAAP financial measures provides meaningful supplemental information and a more complete understanding of our ongoing operating results, including underlying trends. These non-GAAP financial measures are used by management in their financial and operating decision making because management believes they reflect our ongoing business in a manner that allows for meaningful period-to-period comparison and evaluation. We also believe that these non-GAAP financial measures, when considered together with our GAAP financial measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies.
Our Compensation Model
At the consultant level, there are fixed and variable components of compensation. Individuals are rewarded for their performance based on a system that directly ties a portion of their compensation to the amount of net revenue for which they are responsible. A portion of the reward may be based upon individual performance against a series of non-financial measures. Credit towards the variable portion of a consultant’s compensation is earned by generating net revenue for winning and executing work. Each quarter, we review and update the expected annual performance of all consultants and accrue variable compensation accordingly. The amount of variable compensation that is accrued for each consultant is based on a tiered payout model. Overall, Company performance determines the amount available for total variable compensation. The more net revenue that is generated by the consultant, the higher the percentage credited towards the consultant’s variable compensation and thus accrued by our Company as expense.
The mix of individual consultants who generate revenue can significantly affect the total amount of compensation expense recorded, which directly impacts operating margin. As a result, the variable portion of the compensation expense may fluctuate significantly from quarter to quarter. The total variable compensation is discretionary and is based on Company-wide financial targets approved by the Human Resources and Compensation Committee of the Board of Directors. We pay annual bonuses in the first half of the year following the year in which they are earned.
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Results of Operations
(In the following tables, totals and sub-totals may not equal the sum of individual line items due to rounding. All tables are in thousands, except percentages.)
The following table summarizes, for the periods indicated, our results of operations as a percentage of revenue before reimbursements (net revenue):

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Revenue |  |  |  |  |  |  |  |
Revenue before reimbursements (net revenue) |  | 100.0 | % |  | 100.0 | % |  | 100.0 | % |  | 100.0 | %
Reimbursements |  | 1.6 |  |  | 1.5 |  |  | 1.5 |  |  | 1.5 |
Total revenue |  | 101.6 |  |  | 101.5 |  |  | 101.5 |  |  | 101.5 |
Operating expenses |  |  |  |  |  |  |  |
Salaries and benefits |  | 67.5 |  |  | 65.7 |  |  | 66.7 |  |  | 65.1 |
General and administrative expenses |  | 12.9 |  |  | 14.3 |  |  | 13.6 |  |  | 15.5 |
Cost of services |  | 11.7 |  |  | 11.1 |  |  | 11.1 |  |  | 10.7 |
Research and development |  | 2.0 |  |  | 2.0 |  |  | 2.0 |  |  | 2.1 |
Impairment charges |  | — |  |  | — |  |  | — |  |  | 2.0 |
Restructuring charges |  | — |  |  | — |  |  | — |  |  | 0.8 |
Reimbursed expenses |  | 1.6 |  |  | 1.5 |  |  | 1.5 |  |  | 1.5 |
Total operating expenses |  | 95.6 |  |  | 94.7 |  |  | 94.9 |  |  | 97.7 |
Operating income |  | 5.9 |  |  | 6.9 |  |  | 6.6 |  |  | 3.8 |
Non-operating income (loss) |  |  |  |  |  |  |  |
Interest, net |  | 1.1 |  |  | 0.9 |  |  | 1.1 |  |  | 1.1 |
Other, net |  | 1.2 |  |  | (0.2) |  |  | 0.5 |  |  | 0.4 |
Net non-operating income |  | 2.3 |  |  | 0.7 |  |  | 1.6 |  |  | 1.5 |
Income before income taxes |  | 8.2 |  |  | 7.6 |  |  | 8.1 |  |  | 5.3 |
Provision for income taxes |  | 2.7 |  |  | 2.3 |  |  | 2.5 |  |  | 2.4 |
Net income |  | 5.5 | % |  | 5.3 | % |  | 5.6 | % |  | 2.9 | %

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The following table sets forth, for the periods indicated, a reconciliation of Adjusted EBITDA to net income:

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Revenue before reimbursements (net revenue) |  | $ | 322,837 |  |  | $ | 278,559 |  |  | $ | 923,663 |  |  | $ | 822,382 |
Net income |  | 17,646 |  |  | 14,829 |  |  | 52,025 |  |  | 23,704 |
Interest, net |  | (3,436) |  |  | (2,570) |  |  | (10,030) |  |  | (9,268) |
Other, net |  | (3,884) |  |  | 555 |  |  | (4,594) |  |  | (3,013) |
Provision for income taxes |  | 8,835 |  |  | 6,268 |  |  | 23,218 |  |  | 19,750 |
Operating income |  | 19,161 |  |  | 19,082 |  |  | 60,619 |  |  | 31,173 |
Adjustments |  |  |  |  |  |  |  |
Depreciation |  | 3,760 |  |  | 2,997 |  |  | 10,367 |  |  | 7,480 |
Intangible amortization |  | 1,623 |  |  | 1,953 |  |  | 4,878 |  |  | 6,170 |
Earnout accretion |  | 517 |  |  | 478 |  |  | 1,534 |  |  | 1,413 |
Earnout fair value adjustments |  | — |  |  | — |  |  | (2,315) |  |  | 1,211 |
Acquisition contingent compensation |  | 2,627 |  |  | 2,947 |  |  | 7,014 |  |  | 8,220 |
Deferred compensation plan |  | 3,895 |  |  | 2,958 |  |  | 8,735 |  |  | 6,264 |
Reorganization costs |  | 911 |  |  | — |  |  | 4,636 |  |  | — |
Transaction fees |  | 1,750 |  |  | — |  |  | 1,750 |  |  | — |
Impairment charges |  | — |  |  | — |  |  | — |  |  | 16,224 |
Restructuring charges |  | — |  |  | — |  |  | — |  |  | 6,939 |
Total adjustments |  | 15,083 |  |  | 11,333 |  |  | 36,599 |  |  | 53,921 |
Adjusted EBITDA |  | $ | 34,244 |  |  | $ | 30,415 |  |  | $ | 97,218 |  |  | $ | 85,094 |
Adjusted EBITDA margin |  | 10.6 | % |  | 10.9 | % |  | 10.5 | % |  | 10.3 | %

Revenue and Adjusted EBITDA by segment are as follows:

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Revenue |  |  |  |  |  |  |  |
Executive Search |  |  |  |  |  |  |  |
Americas |  | $ | 162,508 |  |  | $ | 134,545 |  |  | $ | 467,082 |  |  | $ | 418,302 |
Europe |  | 50,927 |  |  | 43,143 |  |  | 148,769 |  |  | 124,706 |
Asia Pacific |  | 25,648 |  |  | 26,701 |  |  | 74,796 |  |  | 72,829 |
Total Executive Search |  | 239,083 |  |  | 204,389 |  |  | 690,647 |  |  | 615,837 |
On-Demand Talent |  | 50,910 |  |  | 46,231 |  |  | 141,340 |  |  | 125,983 |
Heidrick Consulting |  | 32,844 |  |  | 27,939 |  |  | 91,676 |  |  | 80,562 |
Revenue before reimbursements (net revenue) |  | 322,837 |  |  | 278,559 |  |  | 923,663 |  |  | 822,382 |
Reimbursements |  | 5,059 |  |  | 4,256 |  |  | 13,583 |  |  | 12,408 |
Total revenue |  | $ | 327,896 |  |  | $ | 282,815 |  |  | $ | 937,246 |  |  | $ | 834,790 |

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|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Adjusted EBITDA |  |  |  |  |  |  |  |
Executive Search |  |  |  |  |  |  |  |
Americas |  | $ | 48,893 |  |  | $ | 40,465 |  |  | $ | 139,770 |  |  | $ | 130,448 |
Europe |  | 6,578 |  |  | 5,022 |  |  | 17,008 |  |  | 11,215 |
Asia Pacific |  | 1,760 |  |  | 5,247 |  |  | 7,302 |  |  | 10,182 |
Total Executive Search |  | 57,231 |  |  | 50,734 |  |  | 164,080 |  |  | 151,845 |
On-Demand Talent |  | 2,837 |  |  | 1,763 |  |  | 4,265 |  |  | (787) |
Heidrick Consulting |  | (1,864) |  |  | (1,025) |  |  | (3,405) |  |  | (4,447) |
Total segment Adjusted EBITDA |  | 58,204 |  |  | 51,472 |  |  | 164,940 |  |  | 146,611 |
Research and Development |  | (4,615) |  |  | (4,606) |  |  | (13,877) |  |  | (14,312) |
Global Operations Support |  | (19,345) |  |  | (16,451) |  |  | (53,845) |  |  | (47,205) |
Total Adjusted EBITDA |  | $ | 34,244 |  |  | $ | 30,415 |  |  | $ | 97,218 |  |  | $ | 85,094 |

Three Months Ended September 30, 2025, Compared to the Three Months Ended September 30, 2024
Total revenue. Consolidated total revenue increased $45.1 million, or 15.9%, to $327.9 million for the three months ended September 30, 2025, from $282.8 million for the three months ended September 30, 2024. The increase in total revenue was primarily due to the increase in revenue before reimbursements (net revenue) described below.
Revenue before reimbursements (net revenue). Consolidated net revenue increased $44.3 million, or 15.9%, to $322.8 million for the three months ended September 30, 2025, compared to $278.6 million for the three months ended September 30, 2024. Foreign exchange rate fluctuations positively impacted results by $4.6 million, or 1.7%. Executive Search net revenue was $239.1 million for the three months ended September 30, 2025, an increase of $34.7 million, or 17.0%, compared to the three months ended September 30, 2024. The increase in Executive Search net revenue was primarily due to a 7.1% increase in the number of executive search confirmations and an increase in the average revenue per executive search compared to the prior year period. On-Demand Talent net revenue was $50.9 million for the three months ended September 30, 2025, an increase of $4.7 million, or 10.1%, compared to the three months ended September 30, 2024. The increase in On-Demand Talent net revenue was primarily due to an increase in the volume of On-Demand projects. Heidrick Consulting net revenue was $32.8 million for the three months ended September 30, 2025, an increase of $4.9 million, or 17.6%, compared to the three months ended September 30, 2024. The increase in Heidrick Consulting net revenue was primarily due to an increase in leadership assessment consulting engagements compared to the prior year period.
The number of Executive Search and Heidrick Consulting consultants was 421 and 93, respectively, as of September 30, 2025, compared to 414 and 84, respectively, as of September 30, 2024. Executive Search productivity, as measured by annualized net Executive Search revenue per consultant, was $2.3 million and $2.0 million for the three months ended September 30, 2025, and 2024, respectively. The average revenue per executive search was $162,000 and $149,000 for the three months ended September 30, 2025, and 2024, respectively.
Salaries and benefits. Consolidated salaries and benefits expense increased $34.8 million, or 19.0%, to $217.8 million for the three months ended September 30, 2025, compared to $183.0 million for the three months ended September 30, 2024. Fixed compensation increased $8.9 million due to increases in base salaries and payroll taxes, separation costs, retirement and benefit costs, and expenses related to our deferred compensation plan, partially offset by a decrease in stock compensation. Variable compensation increased $25.9 million due to higher bonus accruals related to increased consultant productivity. Foreign exchange rate fluctuations negatively impacted results by $2.6 million, or 1.4%.
For the three months ended September 30, 2025, we had an average of 2,261 employees compared to an average of 2,170 employees for the three months ended September 30, 2024.
As a percentage of net revenue, salaries and benefits expense was 67.5% for the three months ended September 30, 2025, compared to 65.7% for the three months ended September 30, 2024.
General and administrative expenses. Consolidated general and administrative expenses increased $2.0 million, or 5.1%, to $41.8 million for the three months ended September 30, 2025, compared to $39.7 million for the three months ended September 30, 2024. The increase in general and administrative expenses was due to increases in professional fees and expenses related to
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information technology, partially offset by a decrease in bad debt. Foreign exchange rate fluctuations negatively impacted results by $0.6 million, or 1.4%.
As a percentage of net revenue, general and administrative expenses were 12.9% for the three months ended September 30, 2025, compared to 14.3% for the three months ended September 30, 2024.
Cost of services. Consolidated cost of services increased $6.6 million, or 21.3%, to $37.6 million for the three months ended September 30, 2025, compared to $31.0 million for the three months ended September 30, 2024. The increase in cost of services was primarily due to an increase in the volume of On-Demand Talent and consulting projects. Foreign exchange rate fluctuations negatively impacted results by $1.2 million, or 3.8%.
As a percentage of net revenue, cost of services was 11.7% for the three months ended September 30, 2025, compared to 11.1% for the three months ended September 30, 2024.
Research and development. Due to the rapid pace of technological advances and digital disruption many of our clients are experiencing, we believe our ability to compete successfully depends increasingly upon our ability to provide clients with timely and relevant technology-enabled products and services. As such, we are focused on developing new technologies to enhance existing products and services, and to expand the range of our offerings through research and development (“R&D”), licensing of intellectual property and acquisition of third-party businesses and technology. We plan to utilize the results of our R&D efforts to develop and enhance new and existing services and products across our current offerings in Executive Search, Heidrick Consulting and On-Demand Talent. Consolidated R&D expense increased $0.7 million, or 13.0%, to $6.4 million for the three months ended September 30, 2025, compared to $5.7 million for the three months ended September 30, 2024. R&D expenses consist of expenses related to payroll, employee benefits, stock-based compensation, other employee expenses and third-party professional fees associated with new product development.
Adjusted EBITDA. Consolidated Adjusted EBITDA was $34.2 million for the three months ended September 30, 2025, an increase of $3.8 million, or 12.6%, compared to $30.4 million for the three months ended September 30, 2024. Adjusted EBITDA margin was 10.6% for the three months ended September 30, 2025, compared to 10.9% for the three months ended September 30, 2024.
Net non-operating income. Net non-operating income was $7.3 million for the three months ended September 30, 2025, compared to $2.0 million for the three months ended September 30, 2024.
Interest, net, was $3.4 million of income for the three months ended September 30, 2025 compared to $2.6 million of income for the three months ended September 30, 2024, primarily due to higher interest rates on a higher volume of marketable securities.
Other, net, was $3.9 million of income for the three months ended September 30, 2025, compared to $0.6 million of expense for the three months ended September 30, 2024. The income for the three months ended September 30, 2025, is primarily due to unrealized gains on our deferred compensation plan and foreign exchange gains. The expense for the three months ended September 30, 2024, is primarily due to foreign exchange losses, partially offset by unrealized gains on the deferred compensation plan. The majority of the Company's investments, including those held in the Company’s deferred compensation plan, are recorded at fair value.
Income taxes. See Note 13, Income Taxes, to the Company's Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.
Executive Search
Americas
The Americas segment reported net revenue of $162.5 million for the three months ended September 30, 2025, an increase of 20.8% compared to $134.5 million for the three months ended September 30, 2024. The increase in net revenue was primarily due to a 12.0% increase in the number of executive search confirmations. All practice groups exhibited growth over the prior period. Foreign exchange rate fluctuations positively impacted results by $0.1 million. There were 218 Executive Search consultants in the Americas segment at September 30, 2025, compared to 215 at September 30, 2024.
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Salaries and benefits expense increased $19.0 million, or 21.9%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Fixed compensation increased $2.4 million due to increases in base salaries and payroll taxes, expenses related to our deferred compensation plan, and retirement and benefits costs, partially offset by a decrease in talent acquisition and retention costs. Variable compensation increased $16.6 million due to higher bonus accruals related to increased consultant productivity.
General and administrative expenses increased $1.2 million, or 11.2%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to increases in marketing costs, partially offset by decreases in expenses related to information technology, bad debt, and taxes and licenses.
The Americas segment reported Adjusted EBITDA of $48.9 million for the three months ended September 30, 2025, an increase of $8.4 million, or 20.8%, compared to $40.5 million for the three months ended September 30, 2024. Adjusted EBITDA margin was 30.1% for the three months ended September 30, 2025 and 2024.
Europe
The Europe segment reported net revenue of $50.9 million for the three months ended September 30, 2025, an increase of 18.0% compared to $43.1 million for the three months ended September 30, 2024. The increase in net revenue was primarily due to an increase in the average revenue per search. All practice groups, with the exception of Social Impact and Global Technology Services, exhibited growth over the prior year period. Foreign exchange rate fluctuations positively impacted results by $2.6 million, or 5.9%. There were 125 Executive Search consultants in the Europe segment at September 30, 2025, compared to 121 at September 30, 2024.
Salaries and benefits expense increased $5.3 million, or 16.9%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Fixed compensation increased $1.7 million due to increases in base salaries and payroll taxes. Variable compensation increased $3.6 million due to higher bonus accruals related to increased consultant productivity.
General and administrative expense increased $0.9 million, or 12.8%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to internal travel and bad debt.
The Europe segment reported Adjusted EBITDA of $6.6 million for the three months ended September 30, 2025, an increase of $1.6 million, or 31.0%, compared to $5.0 million for the three months ended September 30, 2024. Adjusted EBITDA margin was 12.9% for the three months ended September 30, 2025, compared to 11.6% for the three months ended September 30, 2024.
Asia Pacific
The Asia Pacific segment reported net revenue of $25.6 million for the three months ended September 30, 2025, a decrease of 3.9% compared to $26.7 million for the three months ended September 30, 2024. The decrease in net revenue was primarily due to a decrease in the average revenue per executive search, partially offset by a 6.4% increase in the number of executive search confirmations. The Financial Services practice group within the segment exhibited growth over the prior period. Foreign exchange rate fluctuations negatively impacted results by $0.2 million, or 0.9%. There were 78 Executive Search consultants in the Asia Pacific segment at September 30, 2025 and 2024.
Salaries and benefits expense increased $2.1 million, or 11.6%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Fixed compensation increased $1.3 million due to increases in talent acquisition and retention costs, and base salaries and payroll taxes. Variable compensation increased $0.7 million due to the mix of consultants earning bonuses.
General and administrative expenses increased $0.4 million, or 9.7%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to an increase in bad debt
The Asia Pacific segment reported Adjusted EBITDA of $1.8 million for the three months ended September 30, 2025, a decrease of $3.5 million, or 66.5%, compared to $5.2 million for the three months ended September 30, 2024. Adjusted EBITDA margin was 6.9% for the three months ended September 30, 2025, compared to 19.7% for the three months ended September 30, 2024.
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On-Demand Talent
The On-Demand Talent segment reported net revenue of $50.9 million for the three months ended September 30, 2025, an increase of 10.1% compared to $46.2 million for the three months ended September 30, 2024. The increase in On-Demand Talent revenue was primarily due to an increase in the volume of On-Demand projects. Foreign exchange rate fluctuations positively impacted results by $1.6 million, or 3.5%.
Salaries and benefits expense increased $0.6 million, or 4.4%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Fixed compensation increased $0.3 million due to increases in separation costs, and retirement and benefit costs, partially offset by a decrease in base salaries and payroll taxes. Variable compensation increased $0.2 million due to higher bonus accruals related to increased productivity.
General and administrative expense decreased $1.4 million, or 24.2%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to decreases in bad debt and hiring fees.
Cost of services increased $4.3 million, or 14.7%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to an increase in the volume of On-Demand Talent projects.
The On-Demand Talent segment reported Adjusted EBITDA of $2.8 million for the three months ended September 30, 2025, an increase of $1.1 million, or 60.9%, compared to Adjusted EBITDA of $1.8 million for the three months ended September 30, 2024. Adjusted EBITDA margin was 5.6% for the three months ended September 30, 2025, compared to 3.8% for the three months ended September 30, 2024.
Heidrick Consulting
The Heidrick Consulting segment reported net revenue of $32.8 million for the three months ended September 30, 2025, an increase of 17.6% compared to $27.9 million for the three months ended September 30, 2024. The increase in net revenue was primarily due to increases in leadership assessment consulting engagements compared to the prior year period. Foreign exchange rate fluctuations positively impacted results by $0.6 million, or 2.2%. There were 93 Heidrick Consulting consultants at September 30, 2025 compared to 84 at September 30, 2024.
Salaries and benefits expense increased $3.5 million, or 15.6%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Fixed compensation increased $2.8 million due to increases in talent acquisition and retention costs and base salaries and payroll taxes. Variable compensation increased $0.7 million due to higher bonus accruals related to increased productivity.
General and administrative expenses decreased $0.2 million, or 3.6%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to decreases in bad debt.
Cost of services increased $2.4 million, or 114.7%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to an increase in the volume of consulting projects.
The Heidrick Consulting segment reported an Adjusted EBITDA loss of $1.9 million for the three months ended September 30, 2025, a decrease of $0.8 million, or 81.9%, compared to an Adjusted EBITDA loss of $1.0 million for the three months ended September 30, 2024. Adjusted EBITDA margin was (5.7)% for the three months ended September 30, 2025, compared to (3.7)% for the three months ended September 30, 2024.
Global Operations Support
Salaries and benefits expense increased $4.3 million, or 39.3%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to increases in variable compensation and separation costs, partially offset by a decrease in stock compensation.
General and administrative expenses increased $1.2 million, or 21.0%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to increases in professional fees, expenses related to information technology, and hiring fees.
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Global Operations Support reported an Adjusted EBITDA loss of $19.3 million for the three months ended September 30, 2025, a decrease of $2.9 million, or 17.6%, compared to an Adjusted EBITDA loss of $16.5 million for the three months ended September 30, 2024. Adjusted EBITDA margin was (6.0)% for the three months ended September 30, 2025, compared to (5.9)% for the three months ended September 30, 2024.
Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024
Total revenue. Consolidated total revenue increased $102.5 million, or 12.3%, to $937.2 million for the nine months ended September 30, 2025, compared to $834.8 million for the nine months ended September 30, 2024. The increase in total revenue was primarily due to the increase in revenue before reimbursements (net revenue) described below.
Revenue before reimbursements (net revenue). Consolidated net revenue increased $101.3 million, or 12.3%, to $923.7 million for the nine months ended September 30, 2025, compared to $822.4 million for the nine months ended September 30, 2024. Foreign exchange rate fluctuations positively impacted results by $5.6 million, or 0.7%. Executive Search net revenue was $690.6 million for the nine months ended September 30, 2025, an increase of $74.8 million, or 12.1%, compared to the nine months ended September 30, 2024. The increase in Executive Search net revenue was primarily due to a 5.9% increase in the number of executive search confirmations and an increase in the average revenue per executive search. On-Demand Talent net revenue was $141.3 million for the nine months ended September 30, 2025, an increase of $15.4 million, or 12.2%, compared to the nine months ended September 30, 2024. The increase in On-Demand Talent net revenue was primarily due to an increase in the volume of On-Demand projects. Heidrick Consulting net revenue was $91.7 million for the nine months ended September 30, 2025, an increase of $11.1 million, or 13.8%, compared to the nine months ended September 30, 2024. The increase in Heidrick Consulting net revenue was primarily due to an increase in leadership assessment and development consulting engagements compared to the prior year period.
The number of Executive Search and Heidrick Consulting consultants was 421 and 93, respectively, as of September 30, 2025, compared to 414 and 84, respectively, as of September 30, 2024. Executive Search productivity, as measured by annualized net Executive Search revenue per consultant, was $2.2 million and $2.0 million for the nine months ended September 30, 2025, and 2024, respectively. The average revenue per executive search was $154,000 and $145,000 for the nine months ended September 30, 2025, and 2024, respectively.
Salaries and benefits. Consolidated salaries and benefits expense increased $81.2 million, or 15.2%, to $616.5 million for the nine months ended September 30, 2025, compared to $535.3 million for the nine months ended September 30, 2024. Fixed compensation increased $27.1 million due to increases in base salaries and payroll taxes, retirement and benefit costs, and separation costs. Variable compensation increased $54.1 million due to higher bonus accruals related to increased consultant productivity. Foreign exchange rate fluctuations negatively impacted results by $3.1 million, or 0.6%.
For the nine months ended September 30, 2025, we had an average of 2,231 employees compared to an average of 2,196 employees for the nine months ended September 30, 2024.
As a percentage of net revenue, salaries and benefits expense was 66.7% for the nine months ended September 30, 2025, compared to 65.1% for the nine months ended September 30, 2024.
General and administrative expenses. Consolidated general and administrative expenses decreased $2.2 million, or 1.7%, to $125.4 million for the nine months ended September 30, 2025, compared to $127.6 million for the nine months ended September 30, 2024. The decrease in general and administrative expenses was due to a fair value adjustment to decrease the earnout accrual related to our acquisition of Atreus, decreased costs associated with the 2024 Global Partner Conference, and business development travel, partially offset by increased expenses related to information technology and professional fees. Fair value adjustments were made to decrease the Atreus earnout by $2.5 million and increase the businessfourzero earnout by $0.2 million during the nine months ended September 30, 2025. Foreign exchange rate fluctuations negatively impacted results by $0.7 million, or 0.5%.
As a percentage of net revenue, general and administrative expenses were 13.6% for the nine months ended September 30, 2025, compared to 15.5% for the nine months ended September 30, 2024.
Cost of services. Consolidated cost of services increased $14.1 million, or 16.0%, to $102.3 million for the nine months ended September 30, 2025, compared to $88.2 million for the nine months ended September 30, 2024. The increase in cost of services was primarily due to an increase in the volume of On-Demand Talent and consulting projects. Foreign exchange rate fluctuations negatively impacted results by $1.6 million, or 1.8%.
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As a percentage of net revenue, cost of services was 11.1% for the nine months ended September 30, 2025, compared to 10.7% for the nine months ended September 30, 2024.
Research and development. Due to the rapid pace of technological advances and digital disruption many of our clients are experiencing, we believe our ability to compete successfully depends increasingly upon our ability to provide clients with timely and relevant technology-enabled products and services. As such, we are focused on developing new technologies to enhance existing products and services, and to expand the range of our offerings through research and development (“R&D”), licensing of intellectual property and acquisition of third-party businesses and technology. We plan to utilize the results of our R&D efforts to develop and enhance new and existing services and products across our current offerings in Executive Search, Heidrick Consulting and On-Demand Talent. Consolidated R&D expense increased $1.8 million, or 10.9%, to $18.8 million for the nine months ended September 30, 2025, compared to $17.0 million for the nine months ended September 30, 2024. R&D expenses consist of expenses related to payroll, employee benefits, stock-based compensation, other employee expenses and third-party professional fees associated with new product development.
Impairment charges. During the three months ended June 30, 2024, as a result of the Company's mid-year forecasting process, it was determined that a reduction in the On-Demand Talent reporting unit forecast was required. Due to the reduction in the forecasted results for the reporting unit, in addition to the 6% passing margin in the most recent impairment analysis conducted as of October 31, 2023, the Company determined that it was more likely than not that the fair value of the reporting unit was less than its carrying value. As a result, the Company identified a triggering event and performed an interim goodwill impairment evaluation during the three months ended June 30, 2024. Based on the results of the of the impairment evaluation of each of its reporting units, the Company recorded an impairment charge of $14.8 million in On-Demand Talent reporting unit, as well as an impairment charge of $1.5 million in the Europe reporting unit. The impairment charges are recorded within Impairment charges in the Condensed Consolidated Statement of Comprehensive Income for the nine months ended September 30, 2024 and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024. The impairment was non-cash in nature and did not affect our current liquidity, cash flows, borrowing capability or operations, nor did it impact the debt covenants under our credit agreement.
Restructuring charges. Restructuring charges were $6.9 million for the nine months ended September 30, 2024 related to a workforce reduction. The charges are recorded within Restructuring charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024.
Adjusted EBITDA. Consolidated Adjusted EBITDA was $97.2 million for the nine months ended September 30, 2025, an increase of $12.1 million, or 14.2%, compared to $85.1 million for the nine months ended September 30, 2024. Adjusted EBITDA margin was 10.5% for the nine months ended September 30, 2025, compared to 10.3% for the nine months ended September 30, 2024.
Net non-operating income. Net non-operating income was $14.6 million for the nine months ended September 30, 2025, compared to $12.3 million for the nine months ended September 30, 2024.
Interest, net, was $10.0 million of income for the nine months ended September 30, 2025, compared to $9.3 million of income for the nine months ended September 30, 2024, primarily due to higher interest rates on a higher volume of short-term investments.
Other, net, was $4.6 million of income for the nine months ended September 30, 2025, compared to $3.0 million of income for the nine months ended September 30, 2024. The income for the nine months ended September 30, 2025, was primarily due to unrealized gains on the deferred compensation plan, partially offset by foreign exchange losses. The income for the nine months ended September 30, 2024, was primarily due to unrealized gains on the deferred compensation plan, partially offset by foreign exchange losses. The majority of the Company's investments, including those held in the Company’s deferred compensation plan, are recorded at fair value.
Income taxes. See Note 13, Income Taxes.
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Executive Search
Americas
The Americas segment reported net revenue of $467.1 million for the nine months ended September 30, 2025, an increase of 11.7% compared to $418.3 million for the nine months ended September 30, 2024. The increase in net revenue was primarily due to an increase in the average revenue per engagement and a 6.3% increase in the number of executive search confirmations. All practice groups exhibited growth over the prior period. Foreign exchange rate fluctuations negatively impacted results by $1.4 million, or less than 0.3%. There were 218 Executive Search consultants in the Americas segment at September 30, 2025, compared to 215 at September 30, 2024.
Salaries and benefits expense increased $40.4 million, or 15.5%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Fixed compensation increased $9.1 million due to increases base salaries and payroll taxes, expenses related to our deferred compensation plan, and retirement and benefits costs. Variable compensation increased $31.4 million due to higher bonus accruals related to increased consultant productivity.
General and administrative expenses increased $1.7 million, or 4.8%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, due to increased expenses related to information technology, partially offset by a decrease from costs associated with the 2024 Global Partner Conference.
Restructuring charges for the nine months ended September 30, 2024, were $1.3 million related to a workforce reduction. The charges are recorded within Restructuring charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024.
The Americas segment reported Adjusted EBITDA of $139.8 million for the nine months ended September 30, 2025, an increase of $9.3 million, or 7.1%, compared to $130.4 million for the nine months ended September 30, 2024. Adjusted EBITDA margin was 29.9% for the nine months ended September 30, 2025, compared to 31.2% for the nine months ended September 30, 2024.
Europe
The Europe segment reported net revenue of $148.8 million for the nine months ended September 30, 2025, an increase of 19.3% compared to $124.7 million for the nine months ended September 30, 2024. The increase in net revenue was primarily due to an increase in the average revenue per engagement and an 8.6% increase in the number of executive search confirmations. All practice groups, with the exception of Social Impact, exhibited growth over the prior period. Foreign exchange rate fluctuations positively impacted results by $4.5 million, or 3.6%. There were 125 Executive Search consultants in the Europe segment at September 30, 2025, compared to 121 at September 30, 2024.
Salaries and benefits expense increased $17.1 million, or 18.9%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Fixed compensation increased $5.6 million due to increases in base salaries and payroll taxes. Variable compensation increased $11.6 million due to higher bonus accruals related to increased consultant productivity.
General and administrative expense increased $1.7 million, or 7.1%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, due to increases in professional fees, partially offset by a decrease in business development travel.
Impairment charges for the nine months ended September 30, 2024, were $1.5 million as a result of an interim goodwill impairment evaluation. The impairment charge is recorded within Impairment charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024.
Restructuring charges for the nine months ended September 30, 2024, were $0.9 million related to a workforce reduction. The charges are recorded within Restructuring charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024.
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The Europe segment reported Adjusted EBITDA of $17.0 million for the nine months ended September 30, 2025, an increase of $5.8 million, or 51.7%, compared to $11.2 million for the nine months ended September 30, 2024. Adjusted EBITDA margin was 11.4% for the nine months ended September 30, 2025, compared to 9.0% for the nine months ended September 30, 2024.
Asia Pacific
The Asia Pacific segment reported net revenue of $74.8 million for the nine months ended September 30, 2025, an increase of 2.7% compared to $72.8 million for the nine months ended September 30, 2024. The increase in net revenue was primarily due to an increase in the average revenue per engagement and a 0.8% increase in the number of executive search confirmations. The Financial Services, Life Sciences, and Global Technology Services practice groups within the segment exhibited growth over the prior year. Foreign exchange rate fluctuations negatively impacted results by $0.7 million, or 1.0%. There were 78 Executive Search consultants in the Asia Pacific segment at both September 30, 2025 and 2024.
Salaries and benefits expense increased $5.7 million, or 11.2%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Fixed compensation increased $3.8 million due to increases in base salaries and payroll taxes, retirement and benefits costs, and talent acquisition and retention costs. Variable compensation increased $1.9 million due to higher bonus accruals related to increased consultant productivity.
General and administrative expenses decreased $0.2 million, or 1.6%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, due to decreases in expenses related to information technology, and bad debt, partially offset by an increase in business development travel costs.
Restructuring charges for the nine months ended September 30, 2024, were $0.2 million related to a workforce reduction. The charges are recorded within Restructuring charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024.
The Asia Pacific segment reported Adjusted EBITDA of $7.3 million for the nine months ended September 30, 2025, a decrease of $2.9 million, or 28.3%, compared to $10.2 million for the nine months ended September 30, 2024. Adjusted EBITDA margin was 9.8% for the nine months ended September 30, 2025, compared to 14.0% for the nine months ended September 30, 2024.
On-Demand Talent
The On-Demand Talent segment reported net revenue of $141.3 million for the nine months ended September 30, 2025, an increase of 12.2% compared to $126.0 million for the nine months ended September 30, 2024. The increase in On-Demand Talent revenue was primarily due to an increase in the volume and size of On-Demand projects. Foreign exchange rate fluctuations positively impacted results by $2.2 million, or 1.7%.
Salaries and benefits expense decreased $0.5 million, or 1.2%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Fixed compensation increased $0.7 million due to increases in separation costs, and retirement and benefit costs, partially offset by a decrease in base salaries and payroll taxes. Variable compensation decreased $1.2 million primarily due to a reduction in the Atreus contingent compensation accrual.
General and administrative expense decreased $5.0 million, or 26.0%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, due to decreases in business development travel costs, intangible amortization and taxes and licenses, partially offset by increases in insurance and bank fees, and professional fees. A fair value adjustment was made to decrease the Atreus earnout by $2.5 million during the nine months ended September 30, 2025.
Cost of services increased $10.5 million, or 13.1%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to an increase in the volume of On-Demand Talent projects.
During the three months ended June 30, 2024, as a result of the Company's mid-year forecasting process, it was determined that a reduction in the On-Demand Talent reporting unit forecast was required. Due to the reduction in the forecasted results for the reporting unit, in addition to the 6% passing margin in the most recent impairment analysis conducted as of October 31, 2023, the Company determined that it was more likely than not that the fair value of the reporting unit was less than its carrying value. As a result, the Company identified a triggering event and performed an interim goodwill impairment evaluation during the three months ended June 30, 2024. Based on the results of the impairment evaluation of each
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of its reporting units, the Company recorded an impairment charge of $14.8 million in On-Demand Talent reporting unit. The impairment charge is recorded within Impairment charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024.
Restructuring charges for the nine months ended September 30, 2024, were $0.3 million related to a workforce reduction. The charges are recorded within Restructuring charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024.
The On-Demand Talent segment reported Adjusted EBITDA of $4.3 million for the nine months ended September 30, 2025, an improvement of $5.1 million compared to an Adjusted EBITDA loss of $0.8 million for the nine months ended September 30, 2024. Adjusted EBITDA margin was 3.0% for the nine months ended September 30, 2025, compared to (0.6)% for the nine months ended September 30, 2024.
Heidrick Consulting
The Heidrick Consulting segment reported net revenue of $91.7 million for the nine months ended September 30, 2025, an increase of 13.8% compared to $80.6 million for the nine months ended September 30, 2024. The increase in net revenue was primarily due to increases in leadership assessment and development consulting engagements compared to the prior year period. Foreign exchange rate fluctuations positively impacted results by $1.1 million, or 1.4%. There were 93 Heidrick Consulting consultants at September 30, 2025, compared to 84 at September 30, 2024.
Salaries and benefits expense increased $8.9 million, or 13.9%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. Fixed compensation increased $4.3 million due to increases in talent acquisition and retention costs, base salaries and payroll taxes, retirement and benefits costs, and separation costs. Variable compensation increased $4.5 million due to higher bonus accruals related to increased consultant productivity.
General and administrative expenses decreased $2.3 million, or 12.1%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, due to a decreases in business development travel and office occupancy costs, partially offset by a $0.2 million fair value adjustment to increase the earnout accrual for businessfourzero.
Cost of services increased $3.6 million, or 47.3%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, due to an increase in the volume of consulting projects.
Restructuring charges for the nine months ended September 30, 2024, were $3.4 million related to a workforce reduction. The charges are recorded within Restructuring charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024.
The Heidrick Consulting segment reported an Adjusted EBITDA loss of $3.4 million for the nine months ended September 30, 2025, an improvement of $1.0 million, or 23.4%, compared to an Adjusted EBITDA loss of $4.4 million for the nine months ended September 30, 2024. Adjusted EBITDA margin was (3.7)% for the nine months ended September 30, 2025, compared to (5.5)% for the nine months ended September 30, 2024.
Global Operations Support
Salaries and benefits expense increased $9.5 million, or 32.2%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, due to variable compensation, separation costs, and retirement and benefit costs, partially offset by a decrease in stock compensation.
General and administrative expenses increased $1.9 million, or 10.7%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, due to increases in expenses related to information technology, professional fees, hiring fees, and marketing costs, partially offset by a decrease in business development travel costs.
Restructuring charges for the nine months ended September 30, 2024, were $1.0 million related to a workforce reduction. The charges are recorded within Restructuring charges in the Condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2024.
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Global Operations Support reported an Adjusted EBITDA loss of $53.8 million for the nine months ended September 30, 2025, a decrease of $6.6 million, or 14.1%, compared to an Adjusted EBITDA loss of $47.2 million for the nine months ended September 30, 2024. Adjusted EBITDA margin was (5.8)% for the nine months ended September 30, 2025, compared to (5.7)% for the nine months ended September 30, 2024.
Liquidity and Capital Resources
General. We continually evaluate our liquidity requirements, capital needs and availability of capital resources based on our operating needs. We believe that our available cash balances, funds expected to be generated from operations and funds available under our committed revolving credit facility will be sufficient to finance our operations for at least the next 12 months and the foreseeable future, as well as to finance the cash payments associated with our cash dividends and stock repurchase program.
We pay annual bonuses in the first half of the year following the year in which they are earned. Employee bonuses are accrued throughout the year and are based on our performance and the performance of the individual employee.
Lines of credit. On March 17, 2025, the Company entered into the Third Amendment to the Credit Agreement, dated as of October 26, 2018 by and among the Company, Bank of America, N.A., as administrative agent, and the lenders party thereto. The Third Amendment provides that Lenders will make available to the Borrowers a committed revolving credit facility in an aggregate amount of $100 million, which includes a sublimit of $25 million for letters of credit and a sublimit of $10 million for swingline loans, with a $75 million expansion feature. The Amended Credit Agreement matures on March 17, 2030, extended from July 13, 2026.
Borrowings under the Credit Agreement may be used for working capital, capital expenditures, permitted acquisitions, restricted payments and for other general corporate purposes of the Company and its subsidiaries. The obligations under the Credit Agreement are guaranteed by certain of the Company’s subsidiaries and from time to time may be secured by equity interests in certain of the Company’s subsidiaries.
As of September 30, 2025, and December 31, 2024, the Company had no outstanding borrowings. As of such dates, the Company was in compliance with the financial and other covenants under the Amended Credit Agreement and no event of default existed.
Cash, cash equivalents and marketable securities. Cash, cash equivalents and marketable securities at September 30, 2025, December 31, 2024, and September 30, 2024, were $528.1 million, $563.5 million and $409.4 million, respectively. The $528.1 million of cash, cash equivalents and marketable securities at September 30, 2025, includes $214.3 million held by our foreign subsidiaries. A portion of the $214.3 million is considered permanently reinvested in these foreign subsidiaries. If these funds were required to satisfy obligations in the U.S., the repatriation of these funds could cause us to incur additional U.S. income taxes or foreign withholding taxes.
Cash flows used in operating activities. Cash used in operating activities was $28.9 million for the nine months ended September 30, 2025, primarily reflecting an increase in accounts receivable of $63.6 million and a decrease in accrued expenses of $12.2 million, partially offset by net income net of non-cash charges of $72.2 million. The decrease in accrued expenses is primarily due to cash bonus payments related to 2024 of $317.8 million, partially offset by 2025 bonus accruals.
Cash used in operating activities was $26.4 million for the nine months ended September 30, 2024, primarily reflecting an increase in accounts receivable of $51.7 million and a decrease in accrued expenses of $41.4 million, partially offset by net income net of non-cash charges of $60.8 million. The decrease in accrued expenses is primarily due to cash bonus payments related to 2023 of $289.8 million, partially offset by 2024 bonus accruals.
Cash flows used in investing activities. Cash used in investing activities was $38.6 million for the nine months ended September 30, 2025, primarily due to purchases of marketable securities and investments of $362.3 million and capital expenditures of $12.1 million, partially offset by proceeds from the sale of marketable securities of $335.8 million.
Cash used in investing activities was $9.6 million for the nine months ended September 30, 2024, primarily due to purchases of marketable securities and investments of $115.6 million, and capital expenditures of $23.0 million, partially offset by proceeds from the sale of marketable securities and investments of $129.1 million.
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Cash flows used in financing activities. Cash used in financing activities was $14.2 million for the nine months ended September 30, 2025, consisting of dividend payments of $9.7 million, employee tax withholding payments on equity transactions of $4.1 million, and debt issuance costs of $0.4 million.
Cash used in financing activities was $13.4 million for the nine months ended September 30, 2024, consisting of dividend payments of $9.6 million and employee tax withholding payments on equity transactions of $3.8 million.
Contractual obligations. Our lease portfolio is comprised of operating leases for office space and equipment. As of September 30, 2025, we had aggregate future lease payment obligations of $125.3 million, with $18.2 million payable within 12 months. Associated with our lease portfolio, we have asset retirement obligations for the retirement of tangible long-lived assets related to our obligation at the end of the lease term to return office space to the landlord in its original condition. As of September 30, 2025, we had asset retirement obligations of $3.7 million, with less than $0.1 million payable within 12 months.
In addition to lease-related contractual obligations, we also have liabilities related to certain employee benefit plans. These liabilities are recorded in our Consolidated Balance Sheet at September 30, 2025. The obligations related to these employee benefit plans are described in Note 12, Employee Benefit Plans, and Note 13, Pension Plan and Life Insurance Contract, in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 3, 2025. As of September 30, 2025, we did not have a liability for uncertain tax positions.
Application of Critical Accounting Policies and Estimates
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our Condensed Consolidated Financial Statements, which have been prepared using accounting principles generally accepted in the United States of America. Our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 3, 2025, and in Note 2, Summary of Significant Accounting Policies, in the Notes to Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. If actual amounts are ultimately different from previous estimates, the revisions are included in our results of operations for the period in which the actual amounts become known.
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or if changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the financial statements. Management believes its critical accounting policies that reflect its more significant estimates and assumptions relate to revenue recognition, income taxes, interim effective tax rate, assessment of goodwill for impairment, and contingent consideration. See Application of Critical Accounting Policies and Estimates in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 3, 2025.
Recently Issued and Adopted Financial Accounting Standards
The information presented in Note 2, Summary of Significant Accounting Policies, to our Condensed Consolidated Financial Statements within this Quarterly Report on Form 10-Q is incorporated herein by reference.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Currency market risk. With our operations in the Americas, Europe, and Asia Pacific, we conduct business using various currencies. Revenue earned in each country is generally matched with the associated expenses incurred, thereby reducing currency risk to earnings. However, because certain assets and liabilities are denominated in currencies other than the U.S. dollar, changes in currency rates may cause fluctuations in the valuation of such assets and liabilities. As the local currency of our subsidiaries has generally been designated as the functional currency, we are affected by the translation of foreign currency financial statements into U.S. dollars. A 10% change in the average exchange rate for currencies of all foreign countries in which we operate would have increased or decreased our net income by approximately $1.2 million for the nine months ended September 30, 2025. For financial information by segment, see Note 15, Segment Information, in the Notes to Condensed Consolidated Financial Statements within this Quarterly Report on Form 10-Q.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rules 13a-15(e) and 15d-15(e), that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Management of the Company, with the participation of the principal executive officer and the principal financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2025. Based on the evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2025.
(b) Changes in Internal Control Over Financial Reporting
There were no changes to our internal control over financial reporting as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f) that occurred during the three months ended September 30, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The information presented in Note 17, Commitments and Contingencies, to our Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.
Item 1A. Risk Factors
The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, under the heading “Risk Factors,” any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price. Other than as set forth below related to the proposed Merger, there have been no material changes to the Company’s risk factors from those set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 3, 2025.
Risks Related to the Pending Merger and Related Transactions
The Merger and the related transactions are subject to conditions, some or all of which may not be satisfied, and may not be completed on a timely basis, if at all; Failure to complete the Merger and the related transactions on a timely basis or at all could have adverse effects on us.
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The completion of the Merger and the related transactions is subject to a number of conditions, including, among others, (i) the adoption of the Merger Agreement by the requisite holders of the outstanding shares at a meeting of the stockholders of the Company, (ii) the absence of any governmental entity issuing any order or other legal restraint that makes consummation of the Merger illegal or otherwise prohibited, and (iii) (x) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (y) the clearance or approval under certain specified foreign antitrust or other competition laws of jurisdictions other than the United States or investment laws relating to foreign ownership. The obligation of each party to the Merger Agreement to consummate the Merger is also conditioned upon certain unilateral closing conditions, including the other party’s representations and warranties being true and correct (subject to certain customary materiality exceptions) and the other party having performed in all material respects its obligations under the Merger Agreement, and the obligation of Parent to consummate the Merger is additionally conditioned upon the absence of a material adverse effect on the Company that is continuing as of the Effective Time. The availability of Parent’s financing is not a condition to the consummation of the Merger.
If the Merger and the related transactions are not completed, our ongoing business, financial condition, financial results and stock price could be materially adversely affected, and we would forgo any benefit of completing the Merger. In that event, we would be subject to a number of risks, including that the market price of our common stock could be reduced to the extent that the current market price reflects a market assumption that the transactions will be completed; we could owe Parent a termination fee of $38.9 million if the Merger Agreement were terminated under specified circumstances; we could experience negative reactions from the financial markets or from our customers, partners or employees; and we could become involved in litigation related to any failure to complete the Merger or related to any enforcement proceeding commenced against us to perform our obligations pursuant to the Merger Agreement.
Business uncertainties, operational disruptions, and contractual restrictions during the pendency of the Merger could materially harm our business, operations, financial condition, and relationships with stakeholders.
The announcement and pendency of the Merger subjects us to numerous risks and uncertainties that could materially adversely affect our business operations, strategic initiatives, and financial results, regardless of whether the Merger is ultimately consummated.
During the period prior to closing, we are subject to restrictive covenants under the Merger Agreement, which limit our ability to pursue certain business opportunities, strategic transactions, financing activities, or operational changes without consent of Parent. These restrictions may prevent us from reacting promptly to changes in our business environment or from pursuing strategic initiatives or executing capital allocation strategies that would otherwise be in the best interests of our Company and stockholders.
The Merger will involve substantial costs.
The Company and Parent have incurred, and expect to continue to incur, a number of non-recurring costs associated with the proposed Merger, a substantial majority of which will consist of transaction and regulatory costs.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
None.
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Item 6. Exhibits

|  |  |  | Incorporated by Reference
Exhibit No. |  | Exhibit Description |  | Form |  | Exhibit |  | Filing Date/Period End Date
10.1 |  | Agreement and Plan of Merger, dated as of October 5, 2025, by and among Heidrick & Struggles International, Inc., Heron BidCo, LLC and Heron Merger Sub, Inc. |  | 8-K |  | 2.1 |  | 10/6/25
10.2 |  | Amendment to the Amended and Restated By-laws of Heidrick & Struggles International, Inc. |  | 8-K |  | 3.1 |  | 10/6/25
10.3 |  | Amended and Restated Management Severance Pay Plan of Heidrick & Struggles International, Inc.** |  | 8-K |  | 10.1 |  | 10/6/25
10.4 |  | Amended and Restated Change in Control Severance Plan of Heidrick & Struggles International, Inc.** |  | 8-K |  | 10.2 |  | 10/6/25
*31.1 |  | Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |
*31.2 |  | Certification of the Company’s Executive Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |
***†32.1 |  | Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |
***†32.2 |  | Certification of the Company’s Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |
*101.INS |  | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL document |  |  |  |  |  |
*101.SCH |  | Inline XBRL Taxonomy Extension Schema Document |  |  |  |  |  |
*101.CAL |  | Inline XBRL Taxonomy Calculation Linkbase Document |  |  |  |  |  |
*101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  |  |  |
*101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document |  |  |  |  |  |
*101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  |  |  |
*104 |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |  |  |  |  |  |

* | Filed herewith.
** | Denotes a management contract or compensatory plan or arrangement.
† | Certain portions of this exhibit have been redacted.
***† | Furnished herewith.

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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 3, 2025

| Heidrick & Struggles International, Inc.
| (Registrant)
| /s/ Nirupam Sinha
| Nirupam Sinha
| Chief Financial Officer (Duly authorized on behalf of the registrant and in his capacity as Principal Financial and Accounting Officer)

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