Executive Summary

Q3 2025 net revenue rose 15.9% year over year to $322.8M, exceeding the high end of the prior $295–$315M outlook; diluted EPS was $0.83 and adjusted EBITDA was $34.2M (10.6% margin). All segments grew, led by Executive Search (+17% YoY) with strength in the Americas (+20.8%) and Europe (+18.0%).
Against S&P Global consensus, HSII delivered a clear beat: revenue $322.8M vs $301.5M estimate (+7.1%) and Primary EPS $0.911 vs $0.757 estimate (+20%). Note SPGI Primary EPS actual (0.911) differs from company GAAP diluted EPS ($0.83). Values retrieved from S&P Global.*
Management did not host a Q3 call due to the announced go‑private transaction at $59/share with an Advent/Corvex‑led consortium; the deal, expected to close by Q1 2026 subject to approvals, is the primary stock driver near term.
Margin mixed: EBITDA margin declined 30 bps YoY to 10.6% and operating margin fell to 5.9% amid higher salaries/benefits (67.5% of net revenue) and consulting losses; On‑Demand Talent profitability improved.

What Went Well and What Went Wrong

What Went Well
- Broad-based growth: Net revenue +15.9% YoY to $322.8M with all business lines contributing; Executive Search +17% YoY; On‑Demand Talent +10.1%; Heidrick Consulting +17.6%.
- Regional outperformance: Executive Search Americas +20.8% and Europe +18.0% YoY, offsetting APAC softness.
- Positive earnings trajectory: Net income rose to $17.6M (from $14.8M) and diluted EPS to $0.83 (from $0.71); adjusted EBITDA increased to $34.2M.
- Management tone: “results…exceeded the high end of our outlook,” highlighting focus on durable client relationships and sustainable growth.
What Went Wrong
- Margin compression: Adjusted EBITDA margin fell 30 bps YoY to 10.6%; operating margin declined to 5.9% (vs 6.9% LY).
- APAC weakness: Executive Search APAC revenue declined 3.9% YoY.
- Consulting profitability: Heidrick Consulting posted an adjusted EBITDA loss of $1.9M (‑5.7% margin).
- Elevated people costs: Salaries/benefits rose to 67.5% of net revenue (65.7% LY).
- Limited visibility: No Q3 earnings call or new guidance given the pending take‑private.

Financial Results

Key P&L (USD Millions, except per-share and %). Columns are ordered oldest → newest.

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Revenue ($M)	$278.6	$283.6	$317.2	$322.8
Net Income ($M)	$14.8	$13.3	$21.1	$17.6
Diluted EPS ($)	$0.71	$0.62	$0.99	$0.83
Adjusted EBITDA ($M)	$30.4	$29.1	$33.9	$34.2
Adjusted EBITDA Margin (%)	10.9%	10.3%	10.7%	10.6%
Operating Margin (%)	6.9%	5.7%	8.0%	5.9%
Salaries & Benefits / Net Rev (%)	65.7%	66.8%	65.9%	67.5%

Segment Net Revenue ($M)

Segment	Q1 2025	Q2 2025	Q3 2025
Executive Search	213.4	238.2	239.1
On‑Demand Talent	42.6	47.9	50.9
Heidrick Consulting	27.6	31.2	32.8
Total Net Revenue	283.6	317.2	322.8

Executive Search by Region ($M)

Region	Q3 2024	Q3 2025
Americas	134.5	162.5
Europe	43.1	50.9
Asia Pacific	26.7	25.6
Total Executive Search	204.4	239.1

Key Operating KPIs

KPI	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Ending Search Consultants (count)	414	427	420	421
Annualized Consultant Productivity ($M)	2.0	2.0	2.3	2.3
Avg Revenue per Executive Search ($000)	149	137	162	162
Confirmations (% Δ)	5.4%	5.3%	5.2%	7.1%
Ending Consulting Consultants (count)	84	91	90	93

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenue	Q3 2025	$295–$315M (given with Q2 results)	Actual $322.8M	Beat; above high end
Net Revenue	Q2 2025	$285–$305M (given with Q1 results)	Actual $317.2M	Beat; above high end
Dividend per Share	Q1 2025	$0.15 declared	Paid as declared	Maintained
Dividend per Share	Q2 2025	$0.15 declared	Paid as declared	Maintained
Dividend per Share	Q3 2025	$0.15 declared	Payable Nov 26, 2025	Maintained

Note: No new forward guidance provided for Q4/FY due to pending transaction; no Q3 earnings call.

Earnings Call Themes & Trends

Topic	Q1 2025 (Previous)	Q2 2025 (Previous)	Q3 2025 (Current)	Trend
AI/technology & digital tools	Emphasis on “always‑on” leadership tooling; investments in IP and digital assessments to embed leadership workflows.	Continued R&D (1.9%–2.3% of rev) and use of analytics to enable consultants; focus on maximizing tech ROI.	No call; press release reiterates non‑GAAP framework, no AI specifics.	Ongoing investment; disclosure paused in Q3
Macro, tariffs, geopolitics	Volatility creates both opportunities and client caution; diversified model highlighted.	Tariffs/regulatory a “microclimate”; uncertainty can delay starts but demand persists.	No call commentary; continued safe-harbor risk factors.	Steady narrative of opportunity amid uncertainty
Hiring/expense cadence	Organic investments in people and tooling; variable cost base.	Hiring in H1 lifts H2 expense; expect H2 margin ebb amid additions.	No call; margin results reflect higher comp ratio.	Hiring underpinning growth; near-term margin drag
Regional trends	Europe up 9%; broad-based sector demand.	Europe +31%; APAC +12% (Q2); geo mix explains margin puts/takes.	Q3: Americas +20.8%, Europe +18.0%, APAC −3.9%.	Europe/Americas strong; APAC softer in Q3
Consulting profitability	Loss narrowing; long-term 11–13% margin target.	Turned positive ($0.6M adj. EBITDA).	Back to loss (−$1.9M; −5.7%).	Improving YoY but not yet steady-state
Capital allocation & M&A	Cash/earnouts; organic priority; lift-outs as opportunity.	Similar stance; cash for earnouts and selective lift-outs.	Strategic shift to go‑private at $59/share.	Event-driven path to private ownership
Dividends	$0.15 declared.	$0.15 declared.	$0.15 declared.	Maintained quarterly payout

Management Commentary

“We continued our strong 2025 momentum highlighted by our third quarter results that exceeded the high end of our outlook.” — Tom Monahan, CEO.
“As announced on October 6, 2025, Heidrick entered into a definitive agreement to become a private company…for $59.00 per share…Heidrick will not be hosting an earnings conference call or webcast…”
Q2 (CEO): Clients need help navigating volatility, geopolitics, and AI; margin progress targeted through cycle even as hiring in H2 weighs on quarterly margins.
Q2 (CFO): Salary/benefits normalized ~65% of net revenue; scaling G&A; Executive Search adjusted EBITDA margin 22.9%; Q3 revenue outlook $295–$315M considering macro uncertainty.

Q&A Highlights

Hiring and margins: H1 hiring flows into H2 expenses; margin ebb expected as additions come online; additions are “not huge” but aimed at positioning for 2026+.
Guidance cadence and macro: Q3 guide ($295–$315M) balanced normal seasonality with macro conservatism; demand acceleration can push to upper end, delays can push to lower end.
Productivity: Annualized Search productivity hit ~$2.3M in Q2; company still frames long‑term around ~$2.0M; productivity strength supports hiring.
Regional profitability: Europe margin uplift supported by growth/scale; Americas quarter impacted by comp tier dynamics; no structural changes expected.
Cash and M&A: Cash prioritized for earnouts (2026) and organic investments; some hires may be lift‑outs or small acquisitions.

Estimates Context

Q3 2025 vs S&P Global consensus

Metric	Consensus	Actual	Surprise
Revenue ($M)	301.5*	322.8	+7.1%*
Primary EPS ($)	0.757*	0.911*	+20.4%*
GAAP Diluted EPS ($)	—	0.83	—

Notes: SPGI “Primary EPS” actual (0.911) differs from company GAAP diluted EPS (0.83). Values retrieved from S&P Global.*

Key Takeaways for Investors

Fundamentals remain resilient: Q3 net revenue beat both guidance and consensus with broad-based growth; Search remains the engine, aided by Americas and Europe.
Mix and costs temper margins: EBITDA margin down YoY; comp intensity (67.5% of net revenue) and consulting losses offset operating leverage; monitor comp ratio normalization and Consulting path to profitability.
APAC is a watch item: YoY decline in Search APAC contrasts with broad strength elsewhere; sustained softness could cap upside to Search margins.
On‑Demand momentum: Profitability improved alongside double‑digit revenue growth; tie‑ins with Search/interim placements support cross‑sell.
Event path dominates stock setup: The $59 all‑cash take‑private expected by Q1 2026 shifts near‑term trading to a merger‑arbitrage framework; deal timing/approvals are the key catalyst.
Estimate implications: Consensus likely moves higher on revenue; EPS modeling should reflect higher revenue but also elevated H2 expenses per prior commentary and Q3 comp mix.
Dividend maintained: Continued $0.15/share payout underscores cash discipline into transaction close.

Supporting Detail: Additional Q3 Data (for reference)

Executive Search adjusted EBITDA: $57.2M (23.9% margin); On‑Demand Talent $2.8M (5.6%); Consulting −$1.9M (−5.7%).
Cash & marketable securities at 9/30/25: Cash $454.6M; Marketable securities $73.4M.

Footnotes:

Values retrieved from S&P Global.

HEIDRICK & STRUGGLES INTERNATIONAL INC (HSII)·Q3 2025 Earnings Summary