Executive search business Heidrick & Struggles posted second quarter revenues of $260.0 million, up 78.6 percent from the 2020 second quarter. Net revenue growth was driven by all regions in executive search, Heidrick Consulting and on-demand talent.
“We are proud of our accomplishments and the breadth of our rebound as evidenced by our record second quarter performance, delivering robust revenue and profitability growth both sequentially and over the prior year,” said Krishnan Rajagopalan, Heidrick’s president and CEO. “Results were driven by strong contributions from all regions and lines of business. While we see a number of positive market trends underway, we recognize that many of our clients and communities around the world continue to navigate through the pandemic. We remain vigilant and are closely monitoring the situation as we advise our clients through the difficult challenges while positioning them to meet the new opportunities of a post-pandemic world.”
Part of that positioning has been re-positioning parts of the firm’s offerings. Heidrick’s recently completed acquisition of Business Talent Group catapults the firm into the high growth, on-demand talent segment of the market and, according to Mr. Rajagopalan, “allows us to bring another talent solution to our clients, which strongly complements our portfolio of leadership advisory and talent services.” He said the firm will continue to make targeted investments in tech-driven offerings to support future growth and shareholder value.
Executive search net revenue increased 67.1 percent, or $90.0 million, to $224.1 million compared to $134.2 million in the 2020 second quarter. Net revenue increased 73.7 percent in the Americas (73.1 percent on a constant currency basis), 49.1 percent in Europe (35.0 percent on a constant currency basis) and 65.9 percent in Asia-Pacific (56.3 percent on a constant currency basis). All industry practices exhibited growth over the prior year. Heidrick Consulting net revenue grew $5.7 million or 49.6 percent to $17.1 million compared to $11.4 million in the 2020 second quarter.
During the quarter, Heidrick recorded net income in the 2021 second quarter was $20.8 million and diluted earnings per share was $1.03 with an effective tax rate of 34.6 percent. This compares to net loss of $25.7 million and diluted loss per share of $1.33 with an effective tax rate of (21.1) percent in last year’s second quarter.
Heidrick & Struggles expects 2021 third quarter consolidated net revenue of between $245 million and $255 million, while acknowledging the continued fluidity of the COVID-19 pandemic that may impact quarterly results.