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View All NewsHeidrick net revenue up 14% in constant currency, exceeds guidance
Fourth-quarter net revenue rose 14.0% in constant currency at Heidrick & Struggles International Inc. (NASD: HSII). On a reported basis, net revenue rose 10.6% at the Chicago-based executive search and leadership consulting firm and exceeded forecasted guidance.
| (US$ thousands) | Q4 2016 | Q4 2015 | % change |
| Net revenue | $159,821 | $144,520 | 10.6% |
| Reimbursements | $4,743 | $4,776 | -0.7% |
| Total revenue | $164,564 | $149,296 | 10.2% |
| Net income | $493 | $1,260 | -60.9% |
All three regions contributed to fourth quarter year-over-year revenue growth in executive search and all industry practice groups contributed to the year-over-year growth except global technology and services.
Reflecting the growing contribution to business operations and financial performance, the company started reporting its leadership consulting business as a separate segment in the fourth quarter. Prior to the fourth quarter, executive search and leadership consulting had been reported as one business line. Executive search is now reported by three regional segments, and the reporting of culture shaping remains unchanged.
Revenue by segment and geography
| Q4 2016 | Q4 2015 | % change | % growth in constant currency | |
| Executive search | ||||
| Americas | $82,805 | $80,620 | 2.7% | |
| Europe | $29,972 | $26,433 | 13.4% | 25.2% |
| Asia Pacific | $21,892 | $19,620 | 11.6% | 10.3% |
| Total executive search and leadership consulting | $134,669 | $126,673 | 6.3% | |
| Leadership consulting | $15,603 | $7,188 | 117.1% | |
| Culture shaping | $9,549 | $10,659 | -10.4% |
Quote
“Executive search net revenue increased 6.3% in the fourth quarter, with gains in all three regions,” said President and CEO Tracy Wolstencroft. “Our leadership consulting business has grown increasingly more significant in our portfolio of advisory services as well as to our financial results. Five of our top 10 clients in 2016 utilized Heidrick & Struggles for both executive search and leadership consulting. Leadership consulting revenue was $15.6 million in the fourth quarter and the operating margin was 28.3%.”
Full-year results
| (US$ thousands) | 2016 | 2015 | % growth |
| Net revenue | $582,390 | $531,139 | 9.6% |
| Reimbursements | $18,516 | $17,172 | 7.8% |
| Total revenue | $600,906 | $548,311 | 9.6% |
| Net income | $15,413 | $17,132 | -10.0% |
Guidance
Heidrick forecasts consolidated first-quarter net revenue of between $140 million and $150 million.
Share price and market cap
Shares in Heidrick rose 8.86% in late morning trading today to $23.35, and the company had a market cap of $434.37 million, according to Yahoo.