Heidrick & Struggles International, Inc.

Thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to the Hydric and Struggles second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question, please press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star 1. Thank you. I will now turn the conference over to Suzanne Rosenberg, Vice President of Investor Relations. Suzanne, you may begin.

Thank you, and welcome to our 2024 second quarter conference call. Joining me today is our CEO, Tom Monaghan, and CFO, Mark Harris. We posted our accompanying slides on the IR homepage of our websites, at hydric.com, and we encourage you to view these slides for additional context. Please note that in the materials presented today, we may refer to non-GAAP financial measures that we believe provide additional insight into underlying results. Reconciliations between these non-GAAP financial measures and the most comparable GAAP measures may be found in the earnings press release. Also, in our remarks, we may make certain forward-looking statements. We ask that you please refer to the Safe Harbor language also included in today's press release. Tom, I'll now turn the call over to you.

Thank you, Suzanne, and greetings to everyone joining our second quarter call. Today, I'm eager to update you on our robust performance and the work we are doing to drive client and investor value. In the quarter, we generated solid top-line growth, which exceeded the high end of the outlook range we provided on our last call. Our results underscore both the need for corporations to discover, assess, and enable exceptional leadership talents, and the outstanding work of our teams. We also took important steps to position the company for sustained growth and impact. I want to recognize the dedication of our colleagues who contribute to the success of our clients and our company day in and day out. Importantly, we've leveraged our current momentum to move quickly in resetting key aspects of our operations. Tom Murray, myself, and the rest of our leadership team have keyed in on three levers of performance, compelling leadership, clear, strong value propositions, and client alignment. Let me share a bit more about each. First, we have made a series of leadership changes to put great new leaders on top of each of our non-search business areas. Last quarter, we welcomed Sunny Ackerman to lead our on-demand talent business. More recently, we asked Claire Skinner to step out of her Europe and Africa leadership role to lead Hydric Consulting with a clear mandate for growth, impact, and profitability. With this move, we have asked Jenny Hibbert to expand her portfolio beyond global go-to-market integration to include Europe and Africa. Second, we have begun the process of tightening and amplifying our core value propositions outside of search. Notably, Hydra Consulting has been focused on its core strength with an emphasis on assessment, leadership, and performance solutions. Third, we have realigned how we engage clients and transform our entire business, particularly in our emerging digital areas. To affect this, we've realigned the teams and products into our global go-to-market team to ensure tight links between our powerful digital tools and our outstanding professional teams globally. We've also realigned our technology, data, and R&D assets to better support the digital enablement of all our work. Finally, we've asked Dan Ryan to step off into a newly created role entitled Global Managing Partner, Client Coverage and Development. One of Hydric's signature assets is our access to the C-suite, but we see even more opportunities to have at-scale impact at this level. With apologies to Lin-Manuel Miranda, Dan's role is to ensure that our colleagues globally are always in the, quote, room where it happens, end quote, whether that be in client boardrooms or key events and forums. Affecting all of this change quickly did require us to conduct a small reduction in force during the second quarter. Mark will share more detail in a minute, but I want to stress that we do not take such decisions easily or lightly. In a quest for tighter alignment between our teams and our objectives, we said goodbye to some very capable colleagues. who played a key role in building Hydric. That said, we wanted to err on the side of speed and focus. We know that Hydric's near and mid-term growth will come from our ability to clarify what we do for clients, simplify work for our people, and amplify our message in the marketplace. I'm highly confident that these moves will enable us to accomplish these three objectives, and more importantly, accelerate growth and returns from our investments. and thus enable us to create substantial value for clients, colleagues, and shareholders. At our first ever Investor Day on December 3rd in New York City, you'll have the opportunity to meet many of our new leaders firsthand and learn more about our solutions and impact. Let me quickly highlight our second quarter performance before Mark provides more detail. Despite a mixed economic environment and varying decision-making conditions in the near term, our overall business is thriving. Our strong top-line performance reflects contributions from each of our businesses. Our core executive search business delivered excellent results, led by the Americas region. On-demand talent grew its revenue despite slowdown in the broader temporary staffing space, and hybrid consulting gains were accompanied by strong confirmation increases. As importantly, overall second quarter top-line growth translated into robust profitability as we delivered a strong adjusted EBITDA performance. Stepping back to assess our quarterly performance, we continue to benefit from strong underlying demand drivers, reflecting favorable long-term secular trends for our businesses, and our strategic initiatives will further amplify these trends. Every action we take at Hydric links to one critical goal, creating unmatched economic value for our clients, colleagues, and investors. We have a huge opportunity to help clients and a unique set of assets which give us a right to win. It's our job to convert those assets into value for our constituents. We are blessed with a unique opportunity to accomplish this objective. We know that the single most important lever for corporate and organizational performance is having the right leaders leading in the right way. The opportunity to help clients accomplish this is massive, and it grows every day. And with our world-class professional colleagues, supported by our distinctive brand, powerful technology, and valuable intellectual property. We have a strong platform to grow in scale and impact. We've set three strategic priorities to accomplish this. First, to be the most trusted leadership partner to the C-suite and board. We will continue to grow our search and executive assessment capabilities, and we'll find new ways to convert this expertise into ongoing client impact and more holistic revenue streams. In particular, we're seeing more clients treat leadership and succession as an ongoing corporate discipline rather than a periodic bout of emergency surgery. We're calling this leadership assurance as companies invest consistently across time with the discipline and rigor of financial assurance processes. You see evidence of this focus in our strong performance in the executive search business year to date. Second, to help clients master the new world of leadership, The very nature of leadership talent is changing, and clients need to change their leadership strategies to reflect that. Each of the seismic events we've seen across the past five years has reshaped the way leaders must lead and changed how companies must develop and enable leaders. The pandemic changed the world of work forever. The advent of Gen AI has begun to reshape how companies operate and organize. Ongoing geopolitical dynamics have complicated international strategies for every single client. Existing leaders need new support to lead in this environment, to change and grow the way they lead. And companies need to shape the next generation of leaders and access talents in new ways. Our Hydric Consulting and on-demand talent assets are built to help clients in this now permanently complex world. From world-class assessment and development capabilities to help leaders lift performance through cultural change, our Hydric Consulting platform is well-matched to client needs. And our on-demand talent business gives clients a new weapon in their performance arsenal, the ability to engage and leverage new sources of talent in a work world roiled by the aftermath of the pandemic and ongoing demographic change. You see evidence of this focus through strength in the on-demand talent business against the weltered headwinds in the temporary and contingent labor space. Third, to be a bionic innovator. As I've said, We are pleased with the digitization of our business, but understandably not yet satisfied. The needs of our clients and people and the richness of available technology are changing far too quickly to be satisfied. The next horizon is compelling as we further develop into a tech-enabled services business and differentiate our services across all lines of business with a diversified portfolio of proprietary, data-enabled, and digital solutions. We have made important foundational investments, such as the Navigator platform, which will allow us to roll out new offers quickly. We've also seen success with a next-generation enterprise assessment and development solution on the Navigator platform and see more innovation to come. But this is just the beginning of a commitment to leveraging advances in technology and AI to lift the work of our world-class colleagues and mine our rich IP. Underneath these strategic pillars is a deep commitment to building a culture of excellence, entrepreneurship, and collaboration. Tom and I know that our most important responsibility as leaders is to make Hydric the place where the best people can do their best work. In conclusion, what holds true for our clients also applies to us. Our ability to create value for clients, investors, and colleagues is contingent on having exceptional leaders who set strategy and drive outcomes for our most critical corporate priorities. The proactive moves we implemented during the second quarter will enable us to achieve our future growth plans by fostering innovation, enhancing efficiency, and improving overall performance. We accomplished a great deal in a relatively short time to set us up for the next phase of growth. In addition to delivering positive client impact and value, last month our firm celebrated sixth annual Global Day of Service, which unites our offices around the world to give back to the communities where we live and work. The energy around this event was just incredible, and I am thrilled that this year we experienced the highest level of firm impact and engagement thus far. Our employees volunteered their time and talents, exemplifying the true spirit of the firm, embodying our core values and demonstrating our commitment to creating positive change for our clients and beyond. Before I hand it over to Mark, I want to say that I appreciate not only his years of service and excellent stewardship of our finances, but also that he agreed to stay on and assist with the transition as Tom Murray and I completed our new organizational platform for HYBRIC. Finance is the backbone of corporate integrity, and as Mark embarks on his next adventure, I am confident that we will identify the next world-class CFO to help create unmatched value for clients, colleagues, and shareholders. With that, I'll now hand the call over to Mark to provide a detailed review of our financial performance and outlook.