Heidrick & Struggles International, Inc.

Ladies and gentlemen, good afternoon and thank you for standing by. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to the Hydric and Struggle's third quarter 2024 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 would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 a second time. Thank you, and I would now like to turn the conference over to Suzanne Rosenberg, Investor Relations. You may begin.

Thank you, and welcome to our 2024 third quarter conference call. Joining me today are our CEO, Tom Monaghan, and Vice President Controller, Steve Bondi. We posted our accompanying slides on the IR homepage of our website 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. With that, Tom, I'll turn the call over to you.

Thank you, Suzanne, and welcome to everyone joining on our earnings call today. I'm pleased to share that Hydrocon Struggles delivered a solid performance in the third quarter, a testament to our ongoing commitment to creating unrivaled value for our clients. This client focus is especially notable given that we are continuing to drive leadership changes within our organization. Our new leadership team has done an excellent job of keeping our colleagues around the world focused on market opportunities and client needs as we more tightly target our solutions and prioritize scalability and profitability. While we still have much work to do, we saw some early returns from the important steps we took in the second quarter to position the company for growth and impact. We anticipate that Hydric's near and midterm 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. Our leadership team is confident the steps we are taking will enable us to create substantial value for our clients, our colleagues, and our fellow shareholders. Today, I'll provide a brief overview of our third quarter results, share examples of how our approach is delivering tangible value for clients, and outline our strategic priorities. After that, I'll hand over to Steve for a more in-depth look at our key three results, and then we'll open the call for Q&A. Lastly, as our Investor Day approaches, we look forward to seeing many of you on December 3rd, when we'll dive deeper into the important initiatives we're pursuing to drive value for both our clients and our investors. Let me start with a quick overview of our third quarter performance before Steve provides more detail. While we operate in a complex world, our business remains strong thanks to our team's exceptional work in staying close and relevant to our clients. Our top line performance came in at the high end of our outlook, with contributions from all areas of our business. Our core executive search business delivered excellent results, driven by strong performances in the Americas and Asia Pacific regions. We also believe that the environment in Europe is beginning to stabilize. Our on-demand talent business achieved solid growth, despite the ongoing slowdown in the broader temporary staffing space, highlighting our unique position in attractive market segments. Hydric Consulting gains were accompanied by strong confirmation increases. Just as important, our third quarter top line growth translated into solid adjusted EBITDA performance. Although, of course, we see room for continued improvement here and have urgent focus on making that happen. You may notice a shift in how we discuss our results as we place greater emphasis on highlighting organic performance. We have assembled unique capabilities to help our clients and now we need to work to bring them to life. With this rich array of capabilities, our leadership is focused on driving client impact through organic growth at market and client level. Going forward, we will of course be willing and able to add new capabilities through select acquisitions, but given the strength of the assets we've already acquired, this needs to be an addition to great execution on our organic growth opportunity. As you can see in the third quarter, we achieved revenue growth of 6%, and on a year-to-date basis, organic revenue growth was 5%, despite continued caution in some segments of the marketplace. This speaks to the power of our unique assets and the skill of our teams in shaping and responding to client need. We know that the most critical factor in driving corporate and organizational performance is having the right leaders in the right place leading. and this presents an ever-expanding addressable market. Of course, cycles and shifts in the macroeconomic environment are inevitable, but there will always be a significant market opportunity for the essential leadership advisory work we provide. This vast opportunity to support our clients combined with our strong positioning is super exciting and prepares us well for continued success. With our world-class professional colleagues, Supported by our distinctive brand, powerful technology, and valuable intellectual property, we have a strong platform to grow and scale and impact. To accomplish this, we've set three strategic priorities, each of which are centered on building a differentiated, deep, and durable client relationships. First, to be the most trusted leadership partner to the C-suite and board. Even in the rarefied air of top search firms, we believe that our focus on leadership talent differentiates us. We remain committed to consistently growing our executive search and assessment capabilities, which are the cornerstone of our enterprise. It's clear from our search results that we are deeply engaged in helping the world's most talent-centered organizations drive impact by finding and elevating great leaders. This work not only immediately reflects client performance, but also gives unmatched access to leaders and their priorities, allowing us to build valuable insights and data sets. Take, for example, recent research from our board and CEO practice about the importance of testing would-be C-suite leaders' self-awareness. It began with the pattern recognition for our leaders in the field, was validated by our assessment base of leadership performance, and now informs both our search work and points to opportunities in our coaching and leadership development offers. Spoiler alert, only 13% of leaders currently show this trait. The good news, however, is people can develop it, and we can help clients both find people with this trait and shape this as part of people's leadership journeys. This rich intellectual property and deep and growing data assets also allows us to better arm our elite teams with the most effective tools to do their job. We have launched a couple of new tools on our OneSearch platform that enable our teams to do an even better job of partnering with our clients. We look forward to showing you some of these recent innovations in our upcoming Investor Day. Our second priority is to help clients lead transformation in the new world of leadership. our richer set of capabilities in the hands of our thoughtful partners and advisors creates the opportunity to build larger, deeper client relationships. We know that once we place or elevate a new leader, our work is just beginning. Each leader has a mandate to transform the performance of his or her organization. Our capabilities are often vital to that objective. No matter what the endpoint of the transformation is, could be margin improvement, digital transformation, faster growth, better agility, etc. A leader must always ask whether they have the right leaders around them, the right skills for the immediate term, and the right ways of leading and performing as a team and as an organization. And we have lined up the resources to help them, from assessing and, where necessary, augmenting their team through new talent, to driving permanent changes to performance through cultural change, We can meet them where they are and partner with them to get where they need to be. The most obvious example right now is the ongoing effort to use AI to change work itself. As documented by our technology analytics and AI practice, nearly a third of clients surveyed have now installed an exec with this remit as a direct report to the CEO. And more broadly, we see this movement reshaping the roles and organizational structures around the C-suite. from finance to HR to the supply chain. And with these new roles and skills come new ways of working and urgent gaps in capability, all of which our on-demand and consulting offers can help shape. The broader point is that in this era, every client everywhere has a mandate to change. And every client everywhere is confronting a change market for the talent to lead that change. It's our job to grow larger and more impactful client relationships by linking our work to ambitious client goals. The great thing about this business attribute is that every economic and or paradigm shift, whether it's AI advancement, M&A waves, IPO cycles, and beyond, creates a need for new leaders and innovative new leadership approaches. These long-term secular tailwinds are likely to keep expanding. Simply put, when we execute effectively, change plays to our strengths. Our third priority is innovating to create continuous engagement with our clients. In our work with CEOs, boards, and chief people officers, we continue to see an important theme emerging. Leadership and talent decisions are becoming an always-on activity. Rather than waiting for retirement or a crisis to bring our teams in, clients are asking us to partner with them to shape their leadership pipelines year in and year out. This shouldn't be surprising. Many companies now talk openly in their 10-Ks or annual reports about leadership and critical talent being a key risk or opportunity for their business. And yet, historically, the process for managing this risk has lacked consistency and rigor. This is obviously a great opportunity for us to develop larger and stickier relationships with clients. We term this work leadership assurance, knowing that companies face an urgent need to bring the same consistency, insight, and rigor to leadership questions as they do to, say, financial reporting. Doing this well requires a different level of scale, as rather than just assessing three finalists for an immediate CEO role, we now need to look at pipelines of dozens of high-performing leaders to understand not only who can be CEO today, but also who can be in the C-suite a decade from now. Here's a recent example from our work. A major technology company partnered with us to recruit an exceptional external candidate to CEO after working with us to evaluate both internal and external candidates. The new CEO told their team almost immediately that succession planning was everyday business, and they set in motion an ongoing process through which we were partnering them to continually assess the top team, advise on how best to organize and work, evaluate the team against best-in-class rivals, and make selective additions through key external hires. Next step is helping them find ways to bring technology and AI to scale the process even further. We don't expect every company to change how they work overnight, but we also can't imagine a world in which a topic as important as top of the house leadership will be an afterthought in ongoing corporate management. The fourth part of our strategy is not a pillar, but a foundation, and that's Hydric Talent. At the core of these strategic pillars lies a strong commitment to fostering a culture of inclusion, collaboration, and excellence. To that end, Tom Murray and I believe that our primary responsibility as leaders is to make Hydric a place where top talent can thrive and achieve their best work. This applies not only to our existing teams, but to great talent that wants to help us impact corporate performance globally by getting the right leaders into the right roles, leading in the right way. This may be hard to believe given our reach and scale, but we still see opportunities to bring top talent into Hydric to accelerate our growth and impact in search, assessment, and beyond. We'll share a little more about our targets for organic growth at Investor Day. In conclusion, we've made early progress positioning us for the next phase of sustained organic growth and margin expansion. With a vast market opportunity ahead, we are supported by a strong and experienced leadership team. solid momentum, and the financial flexibility to innovate against client needs and attract great people. This, combined with disciplined execution, will enable us to continue driving organic growth, expanding profitability, and enhancing long-term shareholder value. Before I turn the call over to Steve, I would like to extend a warm welcome to both Vijaya Khanna and Tim Carter, who joined our company's board of directors at the end of September. Vijaya brings deep expertise in digital products, user experience, and cybersecurity, while Tim's impressive track record in value creation within public advisory businesses will strengthen our board's capabilities. Notably, Tim's public company CFO experience adds an additional level of financial expertise to guide our strategic decisions as we continue to innovate and grow. With that, I'll now hand the call over to Steve to provide a detailed review of our financial performance and outlook.