A recovery appears to have begun with executive confidence improving, The Caldwell Partners International (TSX: CWL) reported in its fiscal third-quarter earnings announcement.

The Toronto-based provider of executive search and on-demand recruitment reported revenue rose 12.8% in the quarter ended May 31 to CA$29.5 million (US$21.5 million).

“Overall, we are confident that a general baseline of recovery has begun — our business is cyclical, and it is now trending up,” CEO John Wallace said. “New partner recruitment continues, which will prepare us for sustainable growth in the executive search market.”

Professional fees rose year over year in the third quarter. Growth centered in the firm’s Caldwell operations, where they increased by 22.9% year over year. Wallace also noted Caldwell’s professional fees were up 77% compared to the second quarter.

Two factors drove the sequential increase, he said.

“First, a general strengthening of executive confidence in the economy has many companies starting to implement suppressed growth plans,” Wallace said. “Second, we’re seeing a loosening up of the pent-up demand that grew over the last 18 months from a ‘wait and see’ approach towards the trajectory of the economy and financial markets.”

Still, Wallace cautioned that much of the pent-up demand has been accounted for. Fourth-quarter revenue will likely ease compared to the third but still be above the performance in the first two quarters of the year.

Increased demand at the executive level has also not filtered down to the firm’s IQTalent business. Professional fees there fell 36.2% year over year.

“Historically, our IQTalent clients were generally VC-backed firms in the technology sector, where we continue to see reduced hiring demand,” Wallace said. “IQTalent’s model is one of on-demand support to augment in-house teams, and most clients are hiring modestly enough to fully manage their talent acquisition needs without external support.”

The Caldwell Partners also reported that board Chairman Elias Vamvakas has passed away after a battle with cancer. Vamvakas had joined the board in July 2019. He was also CEO and founder of private equity firm Greybrook Capital.

In a separate announcement, the company said Richard Pehlke was appointed to the board. Pehlke retired in April 2018 after serving as executive VP and CFO of Heidrick & Struggles International.

The Caldwell Partners International Q3 2024

Share price

Shares in The Caldwell Partners were up 12.9% to CA$1.05 (US$0.77) as of 12:15 p.m. Eastern time today. They were 18.6% below their 52-week high.