Technology
Heidrick & Struggles Reports Second Quarter 2024 Results
Published
2 years agoon
By
Delivers Strong Revenue Performance with Robust Profitability
Restructuring for Accelerated Growth Implemented in the Quarter
Declares $0.15 Per Share Cash Dividend
CHICAGO, July 29, 2024 /PRNewswire/ — Heidrick & Struggles International, Inc. (Nasdaq: HSII) (“Heidrick & Struggles”, “Heidrick” or the “Company”), a premier provider of global leadership advisory and on-demand talent solutions, today announced financial results for its second quarter ended June 30, 2024.
Second Quarter Highlights:
Net revenue grew to $278.6 million driven by all businessesAdjusted EBITDA was $28.8 millionAdjusted EBITDA margin was 10.3%
“Our team delivered a strong second quarter. In a very complex operating environment, clients continue to need help engaging, assessing and enabling critical leadership talent – and our world-class colleagues met those needs with energy and creativity. This work helped propel our second quarter revenue beyond the high end of our outlook range while generating a double-digit EBITDA margin,” stated CEO Tom Monahan.
“Even as we continued to deliver value to clients, we also made important changes to our leadership team and staffing levels. As a result, we enter the second half of the year with more targeted solutions and better alignment of our organization with client needs. Going forward, we are tightly focused on accelerating returns from our recent investment cycle and on creating unmatched value for clients, colleagues and investors.”
2024 Second Quarter Results
Consolidated net revenue of $278.6 million compared to $271.2 million in the 2023 second quarter. The Company experienced revenue growth in On-Demand Talent, Heidrick Consulting, and Executive Search in the Americas and Asia Pacific, partially offset by a decrease in Executive Search in Europe.
Adjusted EBITDA was $28.8 million compared to $34.9 million in the 2023 second quarter. Adjusted EBITDA margin was 10.3%, compared to 12.9% in the 2023 second quarter. In Executive Search, Adjusted EBITDA was $52.7 million compared to $53.2 million in the prior year period. In On-Demand Talent, Adjusted EBITDA was a loss of $1.6 million versus a gain of $2.6 million in the prior year period. In Heidrick Consulting, Adjusted EBITDA was a loss of $1.4 million compared to a loss of $1.7 million in the prior year period.
In the 2024 second quarter, the company recorded a non-cash goodwill impairment charge of $16.2 million primarily related to the Company’s On-Demand Talent segment, a $6.9 million restructuring charge and a $1.2 million earnout fair value adjustment. In the 2023 second quarter, the Company recorded a non-cash goodwill impairment charge of $7.2 million associated with the Company’s Heidrick Consulting segment.
Including these unusual charges in the 2024 second quarter, net loss was $5.2 million and diluted loss per share was $0.25. Excluding these unusual charges in both the 2024 and 2023 second quarters, adjusted net income was $14.1 million and adjusted diluted earnings per share was $0.67, with an adjusted effective tax rate of 40.9%, in the 2024 second quarter. This compares to adjusted net income of $15.0 million and adjusted diluted earnings per share of $0.73, with an adjusted effective tax rate of 37.7% in the 2023 second quarter.
Executive Search net revenue of $210.0 million increased 1.5% compared to net revenue of $206.8 million in the 2023 second quarter. Excluding the impact of exchange rate fluctuations, which negatively impacted results by 0.4%, or $0.9 million, net revenue increased 2.0%, or $4.1 million from the 2023 second quarter. Net revenue increased 6.1% in the Americas (up 6.3% on a constant currency basis), decreased 12.0% in Europe (down 11.7% on a constant currency basis), and increased 0.7% in Asia Pacific (up 3.3% on a constant currency basis) when compared to the prior year second quarter. All practice groups, except for Consumer and Industrial, exhibited growth over the prior year period.
The Company had 415 Executive Search consultants at June 30, 2024, compared to 423 at June 30, 2023. Productivity, as measured by annualized Executive Search net revenue per consultant, was $2.0 million compared to $1.9 million in the 2023 second quarter, reflecting a lower number of consultants combined with higher revenue. Average revenue per executive search was approximately $151,000 compared to $146,000 in the prior year period. The number of search confirmations decreased 1.6% compared to the year-ago period.
On-Demand Talent net revenue of $41.9 million increased 6.8% compared to net revenue of $39.2 million in the 2023 second quarter. Excluding the impact of exchange rate fluctuations, which negatively impacted results by $0.2 million, or 0.5%, net revenue increased 7.3%, or $2.9 million from the 2023 second quarter.
Heidrick Consulting net revenue of $26.8 million increased 6.2% compared to net revenue of $25.2 million in the 2023 second quarter. The Company had 85 Heidrick Consulting consultants at June 30, 2024, compared to 89 at June 30, 2023.
Consolidated salaries and benefits decreased $1.0 million to $177.9 million compared to $178.9 million in the 2023 second quarter. Year-over-year, fixed compensation expense decreased $3.0 million due to decreases in separation expense, talent acquisition and retention costs, retirement and benefits expenses, and expenses related to the deferred compensation plan, partially offset by increases in stock compensation, and base salaries and payroll taxes. Variable compensation increased $1.9 million due to an increase in consultant production. Salaries and benefits expense was 63.8% of net revenue for the quarter, compared to 66.0% in the 2023 second quarter.
General and administrative expenses increased $5.9 million, or 14.7%, to $46.5 million compared to $40.5 million in the 2023 second quarter. The increase was due to the 2024 Global Conference, earnout fair value adjustments, professional fees, office occupancy, hiring fees, IT, and marketing, partially offset by decreases in intangible amortization, travel and entertainment, and the use of external third-party consultants. As a percentage of net revenue, general and administrative expenses were 16.7% for the 2024 second quarter compared to 14.9% in the 2023 second quarter.
The Company’s cost of services was $29.7 million, or 10.7% of net revenue for the quarter, compared to $25.3 million, or 9.3% of net revenue in the 2023 second quarter. This primarily related to an increase in the volume of On-Demand Talent and Heidrick Consulting projects.
The Company’s research and development expenses were $5.6 million, or 2.0%, of net revenue for the quarter compared to $5.7 million, or 2.1%, of net revenue for the second quarter 2023.
Net cash provided by operating activities was $62.5 million compared to net cash provided by operating activities of $46.9 million in the 2023 second quarter. Cash, cash equivalents and marketable securities at June 30, 2024 was $296.9 million compared to $239.0 million at June 30, 2023 and $478.2 million at December 31, 2023. The Company’s cash position typically builds throughout the year as employee bonuses are accrued, mostly to be paid out in the first half of the year following the year in which they are earned.
Dividend
The Board of Directors declared a 2024 second quarter cash dividend of $0.15 per share payable on August 22, 2024, to shareholders of record at the close of business on August 9, 2024.
2024 Third Quarter Outlook
The Company expects 2024 third quarter consolidated net revenue of between $260 million and $280 million, while acknowledging that continued fluidity in external factors, such as the foreign exchange and interest rate environments, foreign conflicts, inflation and macroeconomic constraints on pricing actions, may impact quarterly results. In addition, this outlook is based on the average currency rates in June 2024 and reflects, among other factors, management’s assumptions for the anticipated volume of new Executive Search confirmations, On-Demand Talent projects, and Heidrick Consulting assignments, consultant productivity, consultant retention, and the seasonality of the business along with the current backlog.
Quarterly Webcast and Conference Call
Heidrick & Struggles will host a conference call to review its second quarter results today, July 29, 2024 at 5:30 pm Eastern Time. Participants may access the Company’s call and supporting slides through its website at www.heidrick.com or by dialing (800) 715-9871 or (646) 307-1963, conference ID# 4805686. For those unable to participate on the live call, a webcast and copy of the slides will be archived at www.heidrick.com and available for up to 30 days following the investor call.
About Heidrick & Struggles International, Inc.
Heidrick & Struggles (Nasdaq: HSII) is a premier provider of global leadership advisory and on-demand talent solutions, serving the senior-level talent and consulting needs of the world’s top organizations. In our role as trusted leadership advisors, we partner with our clients to develop future-ready leaders and organizations, bringing together our services and offerings in executive search, diversity and inclusion, leadership assessment and development, organization and team acceleration, culture shaping and on-demand, independent talent solutions. Heidrick & Struggles pioneered the profession of executive search more than 70 years ago. Today, the firm provides integrated talent and human capital solutions to help our clients change the world, one leadership team at a time. ® www.heidrick.com
Non-GAAP Financial Measures
To supplement the financial results presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Heidrick & Struggles presents certain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of comprehensive income, balance sheets or statements of cash flow of the Company.
Non-GAAP financial measures used within this earnings release are Adjusted EBITDA, Adjusted EBITDA margin, and consolidated net revenue excluding the impact of exchange rate fluctuations (referred to as on a constant currency basis). These measures are presented because management uses this information to monitor and evaluate financial results and trends. Management believes this information is also useful for investors to evaluate the comparability of financial information presented. Reconciliations of these non-GAAP financial measures to the most directly comparable measures calculated and presented in accordance with GAAP are provided as schedules attached to this release.
Adjusted EBITDA refers to net income before interest, other income or expense, income taxes, depreciation and amortization, as adjusted, to the extent they occur, for earnout accretion, earnout fair value adjustments, contingent compensation, deferred compensation plan income or expense, certain reorganization costs, impairment charges and restructuring charges.
Adjusted EBITDA margin refers to Adjusted EBITDA as a percentage of net revenue in the same period.
Adjusted net income and adjusted diluted earnings per share reflect the exclusion of goodwill impairment, restructuring charges and earnout fair value adjustments, net of tax.
Adjusted effective tax rate reflects the exclusion of goodwill impairment, restructuring charges and earnout fair value adjustments, net of tax.
The Company evaluates its results of operations on both an as reported and a constant currency basis. The constant currency presentation is a non-GAAP financial measure, which excludes the impact of fluctuations in foreign currency exchange rates. The Company believes providing constant currency information provides valuable supplemental information regarding its results of operations, consistent with how it evaluates its performance. The Company calculates constant currency percentages by converting its financial results in a local currency for a period using the average exchange rate for the prior period to which it is comparing. This calculation may differ from similarly titled measures used by other companies.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the federal securities laws, including statements regarding guidance for the third quarter of 2024. The forward-looking statements are based on current expectations, estimates, forecasts, and projections about the industry in which we operate and management’s beliefs and assumptions. Forward-looking statements may be identified by the use of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “outlook,” “projects,” “forecasts,” “aim” and similar expressions. Forward-looking statements are not guarantees of future performance, rely on a number of assumptions, and involve certain known and unknown risks and uncertainties that are difficult to predict, many of which are beyond our control. Factors that may cause actual outcomes and results to differ materially from what is expressed, forecasted or implied in the forward-looking statements include, among other things, our ability to attract, integrate, develop, manage, retain and motivate qualified consultants and senior leaders; our ability to prevent our consultants from taking our clients with them to another firm; our ability to maintain our professional reputation and brand name; our clients’ ability to restrict us from recruiting their employees; our heavy reliance on information management systems; risks arising from our implementation of new technology and intellectual property to deliver new products and services to our clients; our dependence on third parties for the execution of certain critical functions; the fact that we face the risk of liability in the services we perform; the fact that data security, data privacy and data protection laws and other evolving regulations and cross-border data transfer restrictions may limit the use of our services and adversely affect our business; any challenges to the classification of our on-demand talent as independent contractors; the fact that increased cybersecurity requirements, vulnerabilities, threats and more sophisticated and targeted cyber-related attacks could pose a risk to our systems, networks, solutions, services and data; the fact that our net revenue may be affected by adverse macroeconomic or labor market conditions, including impacts of inflation and effects of geopolitical instability; the aggressive competition we face; the impact of foreign currency exchange rate fluctuations; our ability to access additional credit; social, political, regulatory, legal and economic risks in markets where we operate, including the impact of the ongoing war in Ukraine and the conflict in Israel and the Gaza strip, the risks of an expansion or escalation of those conflicts and our ability to quickly and completely recover from any disruption to our business; unfavorable tax law changes and tax authority rulings; our ability to realize the benefit of our net deferred tax assets; the fact that we may not be able to align our cost structure with net revenue; any impairment of our goodwill, other intangible assets and other long-lived assets; our ability to maintain an effective system of disclosure controls and internal control over our financial reporting and produce accurate and timely financial statements; our ability to execute and integrate future acquisitions; and the fact that we have anti-takeover provisions that make an acquisition of us difficult and expensive. We caution the reader that the list of factors may not be exhaustive. For more information on these risks, uncertainties and other factors, refer to our Annual Report on Form 10-K for the year ended December 31, 2023, under the heading “Risk Factors” in Item 1A. The forward-looking statements contained in this press release speak only as of the date of this press release. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Contacts:
Investors & Analysts:
Suzanne Rosenberg, Vice President, Investor Relations
srosenberg@heidrick.com
Media:
Bianca Wilson, Director of Public Relations
bwilson@heidrick.com
Heidrick & Struggles International, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
June 30,
2024
2023
$ Change
% Change
Revenue
Revenue before reimbursements (net revenue)
$ 278,626
$ 271,225
$ 7,401
2.7 %
Reimbursements
4,251
2,552
1,699
66.6 %
Total revenue
282,877
273,777
9,100
3.3 %
Operating expenses
Salaries and benefits
177,892
178,916
(1,024)
(0.6) %
General and administrative expenses
46,453
40,514
5,939
14.7 %
Cost of services
29,696
25,306
4,390
17.3 %
Research and development
5,605
5,658
(53)
(0.9) %
Impairment charges
16,224
7,246
8,978
123.9 %
Restructuring charges
6,939
—
6,939
100.0 %
Reimbursed expenses
4,251
2,552
1,699
66.6 %
Total operating expenses
287,060
260,192
26,868
10.3 %
Operating income (loss)
(4,183)
13,585
(17,768)
(130.8) %
Non-operating income
Interest, net
2,612
1,913
Other, net
997
1,377
Net non-operating income
3,609
3,290
Income (loss) before income taxes
(574)
16,875
Provision for income taxes
4,583
7,893
Net income (loss)
(5,157)
8,982
Other comprehensive loss, net of tax
(2,094)
(75)
Comprehensive income (loss)
$ (7,251)
$ 8,907
Weighted-average common shares outstanding
Basic
20,259
20,010
Diluted
20,259
20,637
Earnings (loss) per common share
Basic
$ (0.25)
$ 0.45
Diluted
$ (0.25)
$ 0.44
Salaries and benefits as a % of net revenue
63.8 %
66.0 %
General and administrative expenses as a % of net revenue
16.7 %
14.9 %
Cost of services as a % of net revenue
10.7 %
9.3 %
Research and development as a % of net revenue
2.0 %
2.1 %
Operating margin
(1.5) %
5.0 %
Heidrick & Struggles International, Inc.
Segment Information
(In thousands)
(Unaudited)
Three Months Ended June 30,
2024
2023
$
Change
% Change
2024
Margin1
2023
Margin1
Revenue
Executive Search
Americas
$ 147,078
$ 138,563
$ 8,515
6.1 %
Europe
40,082
45,567
(5,485)
(12.0) %
Asia Pacific
22,807
22,649
158
0.7 %
Total Executive Search
209,967
206,779
3,188
1.5 %
On-Demand Talent
41,895
39,240
2,655
6.8 %
Heidrick Consulting
26,764
25,206
1,558
6.2 %
Revenue before reimbursements (net revenue)
278,626
271,225
7,401
2.7 %
Reimbursements
4,251
2,552
1,699
66.6 %
Total revenue
$ 282,877
$ 273,777
$ 9,100
3.3 %
Adjusted EBITDA
Executive Search
Americas
$ 48,112
$ 46,079
$ 2,033
4.4 %
32.7 %
33.3 %
Europe
2,840
5,456
(2,616)
(47.9) %
7.1 %
12.0 %
Asia Pacific
1,740
1,630
110
6.7 %
7.6 %
7.2 %
Total Executive Search
52,692
53,165
(473)
(0.9) %
25.1 %
25.7 %
On-Demand Talent
(1,629)
2,587
(4,216)
(163.0) %
(3.9) %
6.6 %
Heidrick Consulting
(1,395)
(1,662)
267
16.1 %
(5.2) %
(6.6) %
Total segments
49,668
54,090
(4,422)
(8.2) %
17.8 %
19.9 %
Research and Development
(4,781)
(5,218)
437
8.4 %
(1.7) %
(1.9) %
Global Operations Support
(16,076)
(13,988)
(2,088)
(14.9) %
(5.8) %
(5.2) %
Total operating income
$ 28,811
$ 34,884
$ (6,073)
(17.4) %
10.3 %
12.9 %
1 Margin based on revenue before reimbursements (net revenue).
Heidrick & Struggles International, Inc.
Consolidated Statements of Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Six Months Ended
June 30,
2024
2023
$ Change
% Change
Revenue
Revenue before reimbursements (net revenue)
$ 543,823
$ 510,542
$ 33,281
6.5 %
Reimbursements
8,152
5,354
2,798
52.3 %
Total revenue
551,975
515,896
36,079
7.0 %
Operating expenses
Salaries and benefits
352,305
337,775
14,530
4.3 %
General and administrative expenses
87,816
74,841
12,975
17.3 %
Cost of services
57,128
48,138
8,990
18.7 %
Research and development
11,320
11,186
134
1.2 %
Impairment charges
16,224
7,246
8,978
123.9 %
Restructuring charges
6,939
—
6,939
100.0 %
Reimbursed expenses
8,152
5,354
2,798
52.3 %
Total operating expenses
539,884
484,540
55,344
11.4 %
Operating income
12,091
31,356
(19,265)
(61.4) %
Non-operating income
Interest, net
6,698
5,162
Other, net
3,568
3,186
Net non-operating income
10,266
8,348
Income before income taxes
22,357
39,704
Provision for income taxes
13,482
15,136
Net income
8,875
24,568
Other comprehensive income (loss), net of tax
(6,185)
368
Comprehensive income
$ 2,690
$ 24,936
Weighted-average common shares outstanding
Basic
20,202
19,958
Diluted
21,061
20,701
Earnings per common share
Basic
$ 0.44
$ 1.23
Diluted
$ 0.42
$ 1.19
Salaries and benefits as a % of net revenue
64.8 %
66.2 %
General and administrative expenses as a % of net revenue
16.1 %
14.7 %
Cost of services as a % of net revenue
10.5 %
9.4 %
Research and development as a % of net revenue
2.1 %
2.2 %
Operating margin
2.2 %
6.1 %
Heidrick & Struggles International, Inc.
Segment Information
(In thousands)
(Unaudited)
Six Months Ended June 30,
2024
2023
$
Change
%
Change
2024
Margin1
2023
Margin1
Revenue
Executive Search
Americas
$ 283,757
$ 265,890
$ 17,867
6.7 %
Europe
81,563
84,498
(2,935)
(3.5) %
Asia Pacific
46,128
46,878
(750)
(1.6) %
Total Executive Search
411,448
397,266
14,182
3.6 %
On-Demand Talent
79,752
70,357
9,395
13.4 %
Heidrick Consulting
52,623
42,919
9,704
22.6 %
Revenue before reimbursements (net revenue)
543,823
510,542
33,281
6.5 %
Reimbursements
8,152
5,354
2,798
52.3 %
Total revenue
$ 551,975
$ 515,896
$ 36,079
7.0 %
Adjusted EBITDA
Executive Search
Americas
$ 89,983
$ 88,203
$ 1,780
2.0 %
31.7 %
33.2 %
Europe
6,193
7,537
(1,344)
(17.8) %
7.6 %
8.9 %
Asia Pacific
4,935
5,197
(262)
(5.0) %
10.7 %
11.1 %
Total Executive Search
101,111
100,937
174
0.2 %
24.6 %
25.4 %
On-Demand Talent
(2,550)
1,240
(3,790)
NM
(3.2) %
1.8 %
Heidrick Consulting
(3,422)
(4,457)
1,035
23.2 %
(6.5) %
(10.4) %
Total segments
95,139
97,720
(2,581)
(2.6) %
17.5 %
19.1 %
Research and Development
(9,706)
(10,469)
763
7.3 %
(1.8) %
(2.1) %
Global Operations Support
(30,754)
(26,740)
(4,014)
(15.0) %
(5.7) %
(5.2) %
Total Adjusted EBITDA
$ 54,679
$ 60,511
$ (5,832)
(9.6) %
10.1 %
11.9 %
1 Margin based on revenue before reimbursements (net revenue).
Heidrick & Struggles International, Inc.
Reconciliation of Net Income (Loss) and Adjusted Net Income (Non-GAAP)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Net income (loss)
$ (5,157)
$ 8,982
$ 8,875
$ 24,568
Adjustments
Impairment charges, net of tax1
14,190
6,038
14,190
6,038
Earnout fair value adjustment, net of tax2
749
—
749
—
Restructuring charges, net of tax3
4,291
—
4,291
—
Total adjustments
19,230
6,038
19,230
6,038
Adjusted net income
$ 14,073
$ 15,020
$ 28,105
$ 30,606
Weighted-average common shares outstanding
Basic
20,259
20,010
20,202
19,958
Diluted
20,865
20,637
21,061
20,701
Earnings per common share
Basic
$ (0.25)
$ 0.45
$ 0.44
$ 1.23
Diluted
$ (0.25)
$ 0.44
$ 0.42
$ 1.19
Adjusted earnings per common share
Basic
$ 0.69
$ 0.75
$ 1.39
$ 1.53
Diluted
$ 0.67
$ 0.73
$ 1.33
$ 1.48
1 The Company recorded goodwill impairment charges of $14.8 million in the On-Demand Talent segment and $1.5 million in the Europe segment for the three and six months ended June 30, 2024. The Company recorded a goodwill impairment charge of $7.2 million in the Heidrick Consulting segment for the three and six months ended June 30, 2023.
2 The Company recorded a fair value adjustment to increase the On-Demand Talent earnout by $1.1 million and increase the Heidrick Consulting earnout by $0.1 million for the three and six months ended June 30, 2024.
3 The Company recorded restructuring charges of $6.9 million for the three and six months ended June 30, 2024.
Heidrick & Struggles International, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
June 30,
2024
December 31,
2023
Current assets
Cash and cash equivalents
$ 189,922
$ 412,618
Marketable securities
106,963
65,538
Accounts receivable, net
187,113
133,128
Prepaid expenses
28,016
23,597
Other current assets
43,745
47,923
Income taxes recoverable
7,660
10,410
Total current assets
563,419
693,214
Non-current assets
Property and equipment, net
48,434
35,752
Operating lease right-of-use assets
82,114
86,063
Assets designated for retirement and pension plans
10,779
11,105
Investments
55,927
47,287
Other non-current assets
26,875
17,071
Goodwill
183,150
202,252
Other intangible assets, net
16,411
20,842
Deferred income taxes
29,216
28,005
Total non-current assets
452,906
448,377
Total assets
$ 1,016,325
$ 1,141,591
Current liabilities
Accounts payable
$ 19,515
$ 20,837
Accrued salaries and benefits
190,225
322,744
Deferred revenue
44,679
45,732
Operating lease liabilities
18,044
21,498
Other current liabilities
25,693
21,823
Income taxes payable
8,593
6,057
Total current liabilities
306,749
438,691
Non-current liabilities
Accrued salaries and benefits
51,404
52,108
Retirement and pension plans
70,855
62,100
Operating lease liabilities
78,120
78,204
Other non-current liabilities
42,562
41,808
Deferred income taxes
5,703
6,402
Total non-current liabilities
248,644
240,622
Total liabilities
555,393
679,313
Stockholders’ equity
460,932
462,278
Total liabilities and stockholders’ equity
$ 1,016,325
$ 1,141,591
Heidrick & Struggles International, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
June 30,
2024
2023
Cash flows – operating activities
Net income
$ (5,157)
$ 8,982
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
3,910
4,819
Deferred income taxes
(2,246)
(223)
Stock-based compensation expense
3,465
1,919
Accretion expense related to earnout payments
469
451
Gain on marketable securities
(441)
(49)
Loss on disposal of property and equipment
247
1
Impairment charges
16,224
7,246
Changes in assets and liabilities, net of effects of acquisition:
Accounts receivable
(14,717)
(35,658)
Accounts payable
(255)
(1,777)
Accrued expenses
57,843
52,164
Restructuring accrual
4,386
—
Deferred revenue
(2,624)
396
Income taxes recoverable and payable, net
645
495
Retirement and pension plan assets and liabilities
347
333
Prepaid expenses
3,339
4,500
Other assets and liabilities, net
(2,913)
3,341
Net cash provided by operating activities
62,522
46,940
Cash flows – investing activities
Acquisition of businesses, net of cash acquired
—
(5,842)
Capital expenditures
(10,365)
(3,006)
Purchases of marketable securities and investments
(109,862)
(21,511)
Proceeds from sales of marketable securities and investments
289
153
Net cash used in investing activities
(119,938)
(30,206)
Cash flows – financing activities
Repurchases of common stock
—
(904)
Cash dividends paid
(3,182)
(3,122)
Payment of employee tax withholdings on equity transactions
(885)
—
Net cash used in financing activities
(4,067)
(4,026)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
(1,426)
376
Net increase (decrease) in cash, cash equivalents and restricted cash
(62,909)
13,084
Cash, cash equivalents and restricted cash at beginning of period
252,831
204,733
Cash, cash equivalents and restricted cash at end of period
$ 189,922
$ 217,817
Heidrick & Struggles International, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2024
2023
Cash flows – operating activities
Net income
$ 8,875
$ 24,568
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization
8,700
8,692
Deferred income taxes
(2,333)
6,446
Stock-based compensation expense
6,109
3,772
Accretion expense related to earnout payments
935
642
Gain on marketable securities
(980)
(1,694)
Loss on disposal of property and equipment
261
131
Impairment charges
16,224
7,246
Changes in assets and liabilities:
Accounts receivable
(55,842)
(59,990)
Accounts payable
(2,324)
(2,914)
Accrued expenses
(124,747)
(273,811)
Restructuring accrual
4,386
—
Deferred revenue
(673)
543
Income taxes recoverable and payable, net
5,368
(2,588)
Retirement and pension plan assets and liabilities
5,800
6,403
Prepaid expenses
(4,652)
(2,635)
Other assets and liabilities, net
(6,009)
(4,902)
Net cash used in operating activities
(140,902)
(290,091)
Cash flows – investing activities
Acquisition of business, net of cash acquired
—
(35,749)
Capital expenditures
(16,538)
(6,814)
Purchases of marketable securities and investments
(115,262)
(27,683)
Proceeds from sales of marketable securities and investments
66,574
268,118
Net cash provided by (used in) investing activities
(65,226)
197,872
Cash flows – financing activities
Repurchases of common stock
—
(904)
Cash dividends paid
(6,398)
(6,234)
Payment of employee tax withholdings on equity transactions
(3,747)
(4,141)
Acquisition earnout payments
—
(35,946)
Net cash used in financing activities
(10,145)
(47,225)
Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash
(6,423)
1,772
Net decrease in cash, cash equivalents and restricted cash
(222,696)
(137,672)
Cash, cash equivalents and restricted cash at beginning of period
412,618
355,489
Cash, cash equivalents and restricted cash at end of period
$ 189,922
$ 217,817
Heidrick & Struggles International, Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA (Non-GAAP)
(In thousands)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Revenue before reimbursements (net revenue)
$ 278,626
$ 271,225
$ 543,823
$ 510,542
Net income (loss)
(5,157)
8,982
8,875
24,568
Interest, net
(2,612)
(1,913)
(6,698)
(5,162)
Other, net
(997)
(1,377)
(3,568)
(3,186)
Provision for income taxes
4,583
7,893
13,482
15,136
Operating income (loss)
(4,183)
13,585
12,091
31,356
Adjustments
Depreciation
1,990
2,172
4,483
4,176
Intangible amortization
1,920
2,647
4,217
4,516
Earnout accretion
469
451
935
642
Earnout fair value adjustments
1,211
—
1,211
—
Acquisition contingent consideration
3,285
3,784
5,273
5,443
Deferred compensation plan
956
1,603
3,306
3,736
Reorganization costs
—
3,396
—
3,396
Impairment charges
16,224
7,246
16,224
7,246
Restructuring charges
6,939
—
6,939
—
Total adjustments
32,994
21,299
42,588
29,155
Adjusted EBITDA
$ 28,811
$ 34,884
$ 54,679
$ 60,511
Adjusted EBITDA margin
10.3 %
12.9 %
10.1 %
11.9 %
Heidrick & Struggles International, Inc.
Reconciliation of Operating Income to Adjusted EBITDA by Line of Business (Non-GAAP)
(In thousands)
(Unaudited)
Three Months Ended June 30, 2024
Executive Search
On-Demand Talent
Heidrick Consulting
Research & Development
Global
Operations Support
Total
Revenue before reimbursements (net revenue)
$ 209,967
$ 41,895
$ 26,764
$ —
$ —
$ 278,626
Operating income (loss)1
46,821
(21,695)
(6,530)
(5,605)
(17,174)
(4,183)
Adjustments
Depreciation
863
117
82
809
119
1,990
Intangible amortization
20
1,533
367
—
—
1,920
Earnout accretion
—
409
60
—
—
469
Earnout fair value adjustments
—
1,125
86
—
—
1,211
Acquisition contingent compensation
295
1,835
1,155
—
—
3,285
Deferred compensation plan
920
—
18
15
3
956
Impairment charges
1,463
14,761
—
—
—
16,224
Restructuring charges
2,310
286
3,367
—
976
6,939
Total adjustments
5,871
20,066
5,135
824
1,098
32,994
Adjusted EBITDA
$ 52,692
$ (1,629)
$ (1,395)
$ (4,781)
$ (16,076)
$ 28,811
Adjusted EBITDA margin
25.1 %
(3.9) %
(5.2) %
(1.7) %
(5.8) %
10.3 %
Three Months Ended June 30, 2023
Executive Search
On-Demand Talent
Heidrick Consulting
Research & Development
Global
Operations Support
Total
Revenue before reimbursements (net revenue)
$ 206,779
$ 39,240
$ 25,206
$ —
$ —
$ 271,225
Operating income (loss)1
46,940
(2,862)
(10,686)
(5,658)
(14,149)
13,585
Adjustments
Depreciation
1,297
116
183
416
160
2,172
Intangible amortization
53
2,151
443
—
—
2,647
Earnout accretion
—
394
57
—
—
451
Acquisition contingent compensation
1,165
1,561
1,058
—
—
3,784
Deferred compensation plan
1,541
—
37
24
1
1,603
Reorganization costs
2,169
1,227
—
—
—
3,396
Impairment charges
—
—
7,246
—
—
7,246
Total adjustments
6,225
5,449
9,024
440
161
21,299
Adjusted EBITDA
$ 53,165
$ 2,587
$ (1,662)
$ (5,218)
$ (13,988)
$ 34,884
Adjusted EBITDA margin
25.7 %
6.6 %
(6.6 %)
(1.9) %
(5.2) %
12.9 %
1 The Company does not allocate interest income or expense, other income or expense, and the provision for income taxes to the Company’s reportable operating segments. As such, the Company has concluded that operating income (loss) represents the most directly comparable measure of financial performance presented in accordance with U.S. GAAP for the reconciliation of Adjusted EBITDA in this presentation.
Heidrick & Struggles International, Inc.
Reconciliation of Operating Income (Loss) to Adjusted EBITDA (Non-GAAP)
(In thousands)
(Unaudited)
Six Months Ended June 30, 2024
Executive Search
On-Demand Talent
Heidrick Consulting
Research & Development
Global
Operations
Support
Total
Revenue before reimbursements (net revenue)
$ 411,448
$ 79,752
$ 52,623
$ —
$ —
$ 543,823
Operating income (loss)1
92,353
(26,544)
(10,372)
(11,320)
(32,026)
12,091
Adjustments
Depreciation
2,104
248
279
1,563
289
4,483
Intangible amortization
37
3,368
812
—
—
4,217
Earnout accretion
—
815
120
—
—
935
Earnout fair value adjustments
—
1,125
86
—
—
1,211
Acquisition contingent compensation
(335)
3,391
2,217
—
—
5,273
Deferred compensation plan
3,179
—
69
51
7
3,306
Impairment charges
1,463
14,761
—
—
—
16,224
Restructuring charges
2,310
286
3,367
—
976
6,939
Total adjustments
8,758
23,994
6,950
1,614
1,272
42,588
Adjusted EBITDA
$ 101,111
$ (2,550)
$ (3,422)
$ (9,706)
$ (30,754)
$ 54,679
Adjusted EBITDA margin
24.6 %
(3.2 %)
(6.5 %)
(1.8 %)
(5.7) %
10.1 %
Six Months Ended June 30, 2023
Executive Search
On-Demand Talent
Heidrick Consulting
Research & Development
Global
Operations Support
Total
Revenue before reimbursements (net revenue)
$ 397,266
$ 70,357
$ 42,919
$ —
$ —
$ 510,542
Operating income (loss)1
90,633
(7,226)
(13,802)
(11,186)
(27,063)
31,356
Adjustments
Depreciation
2,640
201
351
664
320
4,176
Intangible amortization
105
3,868
543
—
—
4,516
Earnout accretion
—
585
57
—
—
642
Acquisition contingent compensation
1,800
2,585
1,058
—
—
5,443
Deferred compensation plan
3,590
—
90
53
3
3,736
Reorganization costs
2,169
1,227
—
—
—
3,396
Impairment charges
—
—
7,246
—
—
7,246
Total adjustments
10,304
8,466
9,345
717
323
29,155
Adjusted EBITDA
$ 100,937
$ 1,240
$ (4,457)
$ (10,469)
$ (26,740)
$ 60,511
Adjusted EBITDA margin
25.4 %
1.8 %
(10.4 %)
(2.1 %)
(5.2 %)
11.9 %
1 The Company does not allocate interest income or expense, other income or expense, and the provision for income taxes to the Company’s reportable operating segments. As such, the Company has concluded that operating income (loss) represents the most directly comparable measure of financial performance presented in accordance with U.S. GAAP for the reconciliation of Adjusted EBITDA in this presentation.
View original content:https://www.prnewswire.com/news-releases/heidrick–struggles-reports-second-quarter-2024-results-302208923.html
SOURCE Heidrick & Struggles
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SK Group Establishes Foundation for AI Collaboration with Vietnam
Published
27 minutes agoon
April 24, 2026By
SK Telecom and SK Innovation sign separate MOUs with Vietnam’s Nghe An Province and the National Innovation Center (NIC) to foster artificial intelligence (AI) ecosystem development.From AI data center (AIDC) construction to stable power supply, Korea’s full-stack AI is poised for its first overseas expansion.SK Chairman Chey Tae-won: “SK Group will contribute to the advancement of Vietnam’s AI industry through its comprehensive AI portfolio.”
SEOUL, South Korea, April 24, 2026 /PRNewswire/ — SK Group announced it will collaborate with Vietnam to build the country’s artificial intelligence (AI) industry ecosystem and develop core AI infrastructure.
At the Korea–Vietnam Business Forum held in Hanoi on April 23, SK Group signed separate memoranda of understanding (MOUs) with the Nghe An Provincial Government and Vietnam’s National Innovation Center (NIC) to foster AI ecosystem development.
The signing ceremony was held in the presence of Kim Jung-kwan, Minister of Trade, Industry and Resources of Korea, and Ngo Van Tuan, Minister of Finance of Vietnam.
The Memorandum of Understanding (MOU) between the Nghe An Provincial People’s Committee and SK Group was signed by Vo Trong Hai, Chairman of the Nghe An Provincial People’s Committee; Choo Hyeong-wook, President & CEO of SK Innovation; and Jung Jai-hun, President & CEO of SK Telecom.
Another MOU between the National Innovation Center (NIC) and SK Group was signed by Vu Quoc Huy, Director General of NIC; Choo Hyeong-wook, President & CEO of SK Innovation; and Jung Jai-hun, President & CEO of SK Telecom.
Chey Tae-won, Chairman of SK Group and Chairman of the Korea Chamber of Commerce and Industry (KCCI), also attended the ceremony.
Earlier, at the Korea–Vietnam Summit, the two countries agreed to expand cooperation in future growth sectors such as AI, semiconductors, and energy. SK Group’s MOUs with Vietnam represent this bilateral cooperation being put into action by the private sector.
Through these partnerships, SK Group plans to support Vietnam’s growth as a key partner in its national AI strategy. In addition, building on AI data center development and stable power supply, SK Group is expected to lay the groundwork for the first overseas expansion of its “Korean-style AI full-stack” model, linking AI model development and validation with the rollout of industry-specific AI services.
Joint AIDC feasibility study in Nghe An linked to the Quynh Lap LNG Power Project
SK Innovation and SK Telecom signed an MOU with the Nghe An provincial government to jointly explore developing an AIDC and related infrastructure projects in the region. Nghe An is a major economic hub in north-central Vietnam and has emerged as a fast-growing region for manufacturing, energy and advanced industries, supported by its port and logistics infrastructure.
SK Innovation will explore broad cooperation opportunities in energy solutions, including supplying electricity to the data center and building dedicated generation facilities connected to the Quynh Lap LNG Power Project, for which it was recently selected as the developer.
SK Telecom plans to review options for developing, building, and operating the AIDC while also seeking to secure global demand. The Nghe An provincial government agreed to discuss support measures to help advance the partnership, including permits, administrative procedures, inter-ministerial coordination and incentive programs.
In February, SK Innovation was selected as a developer for the Quynh Lap LNG power project in Nghe An Province, together with PV Power, a power generation subsidiary of Vietnam’s state-owned oil and gas group PVN, and local company NASU. The project is a large-scale energy infrastructure initiative that includes the development of a 1,500-MW gas-fired combined cycle power plant, an LNG terminal, and a dedicated port, with construction scheduled to begin in 2027 and completion targeted for 2030. From the proposal stage, SK Innovation also presented a model to foster high value-added industries by integrating SK Group’s AI and semiconductor capabilities in areas near the power plant, thereby laying the foundation for the current partnership.
At the forum, the Nghe An government also presented the SK Innovation consortium with the Investment Registration Certificate (IRC) for the Quynh Lap Power Project, reaffirming its commitment to the development.
“Drawing on SK Group’s experience in operating large-scale power generation and diverse energy solution businesses, we will ensure the successful development of the local power infrastructure,” said Choo Hyeong-wook, President & CEO of SK Innovation, during a presentation titled “Vietnam’s Economic Leap through AI + Energy Innovation.”
Cooperation with NIC to Build Vietnam’s AI Ecosystem
SK Telecom and SK Innovation also signed a comprehensive MOU with Vietnam’s NIC to support the development of the country’s AI ecosystem.
The two sides agreed to cooperate on AIDC development, energy infrastructure development and the establishment of policy and institutional frameworks to foster the AI industry.
Under the agreement, SK Telecom will support AI ecosystem development in Vietnam through technology collaboration and investment promotion, and SK Innovation will provide energy solutions for AIDCs and related industries. The NIC will provide institutional support, such as coordinating with government agencies, improving regulations and developing policy, while also identifying and connecting local partners to facilitate project execution.
Established in 2019 by the Vietnamese government, NIC serves as the country’s national innovation hub, leading initiatives in AI, semiconductors and investment promotion. SK Group has maintained a close partnership with NIC, including a previous $30 million contribution toward its establishment.
Jung Jai-hun, President and CEO of SK Telecom, said, “AI data centers are key infrastructure that underpins the growth of the AI industry. Building on SK Group’s accumulated capabilities in the development, construction, and operation of AI data centers, we will further refine a collaboration model tailored to the Vietnamese market.”
First Overseas Expansion of Chairman Chey Tae-won’s “AI Full-Stack Provider” Vision
This partnership in Vietnam is significant as it could mark SK Group’s first overseas expansion of the “AI full-stack provider” strategy, integrating capabilities in AIDC, power, and energy solutions.
Chairman Chey Tae-won has consistently articulated his vision of transforming SK Group into an “AI full-stack provider.” Leveraging SK Group’s strengths across the AI value chain—including semiconductors, data centers, power and energy solutions, and AI services—the Group aims to build the most efficient AI infrastructure model.
Under this vision, SK Group is advancing the development of the 100-MW hyperscale “SK AI Data Center Ulsan,” targeted for completion in 2027. The Group has also been laying the groundwork for Korea to emerge as an Asia-Pacific AI hub by engaging in discussions with OpenAI on collaboration for AI data center development in Korea.
Ahead of the Korea–Vietnam Business Forum, Chairman Chey Tae-won said at a business roundtable, “AI will play a critical role in Vietnam’s continued growth. SK Group has a portfolio spanning the entire AI ecosystem—from energy and semiconductors to AI models and applications—and we will leverage this to make tangible contributions to the development of Vietnam’s AI industry.”
About SK Telecom
SK Telecom has been leading the growth of the mobile industry since 1984. Now, it is taking customer experience to new heights by extending beyond connectivity. By placing AI at the core of its business, SK Telecom is rapidly transforming into an AI company with a strong global presence. It is focusing on driving innovations in areas of AI Infrastructure, AI Transformation (AIX) and AI Service to deliver greater value for industry, society, and life.
For more information, please contact skt_press@sk.com or visit our LinkedIn page www.linkedin.com/company/sk-telecom.
About SK Innovation
Founded in 1962 as Korea Oil Corporation, SK Innovation has been at the forefront of Korea’s energy industry for over six decades. The company has pioneered numerous milestones, including Korea’s first overseas oil field development, the vertical integration of its energy and chemical businesses, the nation’s first private LNG import, and a strategic entry into the electric vehicle battery business.
Now, SK Innovation has reached a transformative turning point in its journey to become a Comprehensive Global Energy Company. Extending beyond its traditional oil business to encompass the entire energy value chain -spanning LNG & Power, Renewable Energy, and Energy Solutions- the company is driving global expansion, including in Vietnam.
For more information, please visit the official SK Innovation website at www.skinnovation.com.
View original content:https://www.prnewswire.com/apac/news-releases/sk-group-establishes-foundation-for-ai-collaboration-with-vietnam-302752442.html
SOURCE SK Group; SK Telecom
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Ace Green Recycling, Inc. and Athena Technology Acquisition Corp. II Announce $32 Million PIPE Investment to Support Proposed Business Combination
Published
27 minutes agoon
April 24, 2026By
Investment led by seasoned sector-focused institutional investors supports development of Ace’s Texas facility and international operations
HOUSTON, April 24, 2026 /PRNewswire/ — Ace Green Recycling, Inc. (“Ace” or the “Company”), a leading provider of sustainable battery recycling technology solutions, and Athena Technology Acquisition Corp. II (“ATEK II” or “Athena”), a publicly traded special purpose acquisition company, today announced that they have entered into securities purchase agreements with certain investors for an aggregate $32 million private investment in public equity (“PIPE”) financing to support their previously-announced proposed business combination (the “Proposed Business Combination”), with the common stock of the combined company expected to be listed on the Nasdaq Stock Market under the ticker “AGXI” following the consummation of the Proposed Business Combination.
The PIPE financing includes participation from sector-focused institutional investors, and is expected to support Ace’s differentiated recycling platform for lithium (nickel-manganese-cobalt & lithium iron phosphate) and lead batteries and its role in enabling domestic supply chains for critical battery materials supporting a circular economy for batteries. The financing is a key milestone toward the completion of the Proposed Business Combination and supports the Company’s strategy to scale its U.S. footprint, global supply chain management platform, and commercialize its next-generation battery recycling technology.
“This investment accelerates our mission to redefine battery recycling at a global scale,” said Ace CEO Nishchay Chadha. “At Ace, we are deploying GREENLEAD® and LithiumFirst™ as a new standard – fully electrified, Scope 1 emissions-free solutions designed to replace legacy processes and unlock a cleaner supply chain for critical materials. We believe that the future of electrification depends on how efficiently and sustainably we recover these resources, and this milestone brings us meaningfully closer to that future.”
Concurrent with and contingent upon the closing of the Proposed Business Combination, Ace expects to receive approximately $32 million in gross proceeds from the PIPE financing before transaction expenses. The Company expects to use these proceeds primarily to fund capital expenditures related to the development of its Texas recycling facility as well as for general corporate purposes, including supporting the expansion of operations and to fund the purchase of other companies , as described in the registration statement on Form S-4 most recently filed with the Securities and Exchange Commission by Athena and Ace on March 24, 2026.
We believe that investor participation in this PIPE reflects confidence in Athena’s ability to bring together exceptional talent and partner with high-quality companies through complex transactions and the public market process. We also believe that Ace is well positioned to support a more resilient domestic supply chain for critical battery materials, and this marks an important step toward closing the Proposed Business Combination,” said Isabelle Freidheim, Chairman and Chief Executive Officer of Athena
Advisors
Rimon P.C. is serving as legal counsel to Ace. Latham & Watkins LLP is serving as legal counsel to ATEK II.
About Ace Green Recycling
Ace Green Recycling, Inc., incorporated in Delaware, is an innovative battery recycling technology platform offering sustainable end-of-life solutions. It has deployed modular, Scope 1 carbon emissions-free recycling facilities for lithium (nickel-manganese-cobalt & lithium iron phosphate) and lead batteries used in various industries including electronics, automotive and energy storage. Ace was founded by Nishchay Chadha, Chief Executive Officer and a veteran in recycling, mining and global supply chain industries, and Dr. Vipin Tyagi, Chief Technology Officer, with extensive experience in battery materials recycling technologies. For more information, please visit www.acegreenrecycling.com.
About Athena Technology Acquisition Corp. II
Athena Technology Acquisition Corp. II is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination. Athena is part of the broader Athena platform founded by Isabelle Freidheim and supported by a senior leadership team with deep experience across public transactions, private M&A, growth investing and technology leadership. The broader Athena platform brings differentiated transaction experience, investor alignment and partnership-oriented execution to the business.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This release contains statements regarding Athena, Ace, the Proposed Business Combination and other matters that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, forward-looking statements can be identified by words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “should,” “strategy,” “will,” “intend,” “may” and other similar expressions or the negative of such words or expressions. Statements in this report concerning (i) Athena’s or Ace’s expected future financial position, business strategy, production capacity, competitive positions, growth opportunities, plans and objectives of management and (ii) the expected benefits of the Proposed Business Combination, together with other statements that are not historical facts, are forward-looking statements that are estimates reflecting management’s best judgment based upon currently available information. Such forward-looking statements are inherently uncertain, and stockholders and other potential investors must recognize that actual results may differ materially from expectations as a result of a variety of factors, including, without limitation, those discussed below. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which Athena and Ace are unable to predict or control, that may cause actual results, performance or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated in these statements as a result of a number of factors, including, but not limited to:
Ace has a limited operating history at scale and is developing a flagship and new facility in the United States; scaling up its operations and expansion in the U.S. may carry uncertainties and pose liquidity risks to Ace;Ace may not be able to secure adequate capital to execute its business plan;If Ace is unable to overcome the workforce and engineering challenges arising from scaling up production from its existing capacities, it may not succeed in executing its growth and expansion plans;Successful or timely implementation of Ace’s planned U.S. facility may be delayed due to licensing or regulatory issues;A large portion of Ace’s profit is derived from a relatively small number of major customers, and its business, financial condition, and results of operations could be materially and adversely affected if its key customers fail to meet their contractual obligations;Prices for recovered materials are subject to global market fluctuations and price instability may negatively impact Ace’s financial performance;Ace relies on third-party vendors for key machineries and failure to acquire and maintain them may adversely disrupt its operations;A decline in green energy adoption may inhibit future recycling opportunities and may result in decreased demand for Ace’s products;Ace’s proprietary know-how may be rivaled by competitors, which may erode the technological edge it has established;Unfavorable economic or geopolitical conditions could constrain Ace’s expansion, inhibit its further growth and otherwise have a material adverse effect its business, results of operations, prospects and financial condition;Athena and Ace may not obtain the requisite stockholder approvals for the Proposed Business Combination;Nasdaq may not list the common stock of the surviving company following the Proposed Business Combination, which could limit investors’ ability to effect transactions following the Proposed Business Combination;An event, change or other circumstance could result in the termination of the Proposed Business Combination;A condition to the closing of the Proposed Business Combination may not be satisfied;There may be delays in completing the Proposed Business Combination;Any announcement or news coverage relating to the Proposed Business Combination could have adverse effects on the market price of Athena common stock or Ace common stock;The risk of litigation related to the merger; andOther risks and uncertainties identified in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” sections of Athena’s most recent Annual Report on Form 10-K, and other risks as identified from time to time in its SEC reports.
All of the forward-looking statements Athena and Ace make in or in connection with this report are qualified by the information contained or incorporated by reference in a registration statement filed by Athena and Ace on Form S-4, that includes a proxy statement and a prospectus, to register the shares of Athena stock that will be issued to Ace’s stockholders (the “Registration Statement”). For additional information, see the sections entitled “Risk Factors” and “Where You Can Find More Information” beginning on pages 18 and 208, respectively, of the Registration Statement.
Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Except to the extent required by applicable law, neither Athena nor Ace undertakes any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
NO OFFER OR SOLICITATION
This press release is not intended to be, and shall not constitute, an offer to buy, subscribe for or sell or the solicitation of an offer to buy, subscribe for or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
IMPORTANT ADDITIONAL INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION AND WHERE TO FIND IT
This release is being made in respect of the Proposed Business Combination between Athena and Ace. In connection with the Proposed Business Combination, Athena and Ace filed with the SEC the Registration Statement, as well as other relevant documents regarding the Proposed Business Combination. INVESTORS ARE URGED TO READ IN THEIR ENTIRETY THE REGISTRATION STATEMENT REGARDING THE TRANSACTION THAT HAS BEEN FILED AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
A free copy of the Registration Statement, as well as other filings containing information about Athena, may be obtained at the SEC’s website (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from Athena by calling (970) 925-1572.
PARTICIPANTS IN THE SOLICITATION
Athena, Ace and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from its respective stockholders in respect of the Proposed Business Combination contemplated by the Registration Statement. Information regarding the persons who are, under the rules of the SEC, participants in the solicitation of the stockholders of Athena in connection with the Proposed Business Combination, including a description of their direct or indirect interests, by security holdings or otherwise, are set forth in the Registration Statement filed with the SEC. Information regarding Athena’s directors and executive officers is contained in its Annual Report on Form 10-K for the year ended December 31, 2025, which is filed with the SEC. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is or will be contained in the Registration Statement and other relevant materials filed or to be filed with the SEC regarding the Proposed Business Combination when such materials become available. Investors and security holders should read the Registration Statement carefully before making any voting or investment decisions. You may obtain free copies of any of the documents referenced herein using the sources indicated above.
Contacts:
Media
Media@ace-green.com
Investors
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Technology
TOTAL PLAY ANNOUNCES REVENUE OF Ps.11,177 MILLION AND EBITDA OF Ps.4,849 MILLION IN THE FIRST QUARTER OF 2026
Published
1 hour agoon
April 24, 2026By
—Growth of 115,020 net subscribers in Totalplay Residencial in the period strengthens the company’s service revenues—
—EBITDA less Capex and interest reached Ps.883 million, the highest level ever recorded for a first quarter—
—A 9% reduction in debt with cost from loans provides additional strength to the company’s capital structure—
MEXICO CITY, April 23, 2026 /PRNewswire/ — Total Play Telecomunicaciones, S.A.P.I. de C.V. (“Total Play”), a leading telecommunications company in Mexico, which offers internet access, pay television and telephony services, through one of the largest 100% fiber optic networks in the country, announced today financial results for the first quarter of 2026.
“The growing preference of millions of homes for our technologically advanced internet services, with superior stability and speed, resulted in a net increase of 115,020 subscribers in the quarter, which continued to drive the company’s revenue,” commented Eduardo Kuri, CEO of Total Play. “The growth of our operations was consistent with the Capex which represented only 22% of revenue, and interest payments that decreased double-digit, in the context of lower debt with cost at the company. This resulted in a 51% increase in cash generation — defined as EBITDA less Capex and interest paid — reaching a record high of Ps.883 million in the period.”
“Regarding the balance sheet, we began this quarter with the amortization schedule for the Senior Secured Notes due 2028 — through a principal payment of US$15 million for the period — which adds to the US$56 million amortization of the remaining balance of the Senior Notes due in 2025 — done in the previous quarter — which, among other debt payments, contributed to a 9% reduction in our balance of debt with cost from loans,” added Mr. Kuri. “Simultaneously, we were able to decrease our lease liabilities by 30% and our trade payables by 22%, further strengthening Total Play’s solid capital structure.”
First quarter results
Revenue for the quarter was Ps.11,177 million, 3% higher than Ps.10,843 million for the same period of the previous year. Total costs and expenses were Ps.6,328 million, compared to Ps.5,761 million in the prior year.
As a result, Total Play’s EBITDA was Ps.4,849 million, from Ps.5,082 million a year ago; the quarter’s EBITDA margin was 43%. The company reported operating profit of Ps.301 million, compared to Ps.763 million a year earlier.
Total Play reported a net loss of Ps.1,327 million from a loss of Ps.1,961 million in the same quarter of 2025.
Q1 2025
Q1 2026
Change
Ps.
%
Revenue from services
$10,843
$11,177
$334
3 %
EBITDA
$5,082
$4,849
$(233)
(5) %
Operating income
$763
$301
$(462)
(61) %
Net result
$(1,961)
$(1,327)
$634
32 %
Amounts in millions of pesos.
EBITDA: Earnings before interest, taxes, depreciation, and amortization.
Revenue from services
The company’s revenue increased 3%, as a result of 3% growth in sales in the residential segment and 4% growth in revenue from the enterprise segment.
Totalplay Residential’s revenue increase to Ps.9,848 million, up from Ps.9,570 million the previous year, is related to a 4% increase in the number of the company’s service subscribers compared to the same quarter of the previous year, reaching 5,554,374 this period — a figure that includes 67,856 small and medium-sized businesses. Compared to the previous quarter, the subscriber base increased by 115,020 users. The company believes that the number of subscribers achieved this quarter reflects its remarkable ability to offer technologically advanced internet services — with superior stability and speed — continuous innovation in its entertainment platform, and service excellence.
Average revenue per subscriber (ARPU) for the quarter was Ps.588, compared to Ps.597 a year ago. The decrease in ARPU is largely related to a growing proportion of double-play subscribers compared to triple-play subscribers within the total residential subscriber base.
The number of homes passed by Total Play in Mexico at the end of this period was 19.5 million, compared to 17.6 million a year ago.
Penetration — the proportion of homes passed by Total Play that have the company’s telecommunications services — was 28.5% at the end of the quarter from 30.2% a year ago.
Revenue from the enterprise segment was Ps.1,329 million, up from Ps.1,273 million in the previous year, as a result of contracting Total Play services for the development of corporate client projects.
Costs and expenses
Total costs and expenses increased 10% as a result of a 4% increase in service costs and a 12% increase in expenses.
The increase in costs to Ps.1,663 million from Ps.1,597 million in the previous year, results mainly from higher costs related to memberships, maintenance and support, partially offset by lower content costs — as a result of a higher proportion of double play users in the mix of residential service subscribers and the negotiation of terms, in an optimal way, with content producers —.
The increase in expenses to Ps.4,665 million from Ps.4,164 million reflects higher maintenance, personnel, advertising and promotion expenses, in the context of the company’s growing operations.
EBITDA and net result
Total Play’s EBITDA was Ps.4,849 million compared to Ps.5,082 million the previous year.
Relevant variations below EBITDA were the following:
An increase of Ps.229 million in depreciation and amortization, as a result of user acquisition costs — telecommunications equipment, labor and installation in the period.
A Decrease of Ps.189 million in accrued interest payable, in the context of reducing the company’s debt with cost balance during the period.
Changes in the fair value of financial instruments of Ps.921 million, due to costs related to hedging options in the previous year.
Other financial income of Ps.31 million, compared to other expenses of Ps.200 million in the previous year, as a result of costs related to debt issuances a year ago.
A, increase of Ps.109 million in exchange losses as a result of net liability monetary position in foreign currency, together with greater depreciation of the peso against the basket of currencies in which the company’s monetary liabilities are denominated this quarter, compared to the previous year.
Total Play reported a net loss of Ps.1,327 million from a net loss of Ps.1,961 million in the same period of 2025.
Balance sheet
As of March 31, 2026, the company’s debt with cost from loans was Ps.55,477 million, 9% lower than the Ps.60,806 million of the previous year. The reduction resulted from various debt with cost amortizations during the period, including US$15 million of the company’s Senior Secured Notes due 2028 this quarter and US$56 million of the remaining Senior Notes due 2025, done last November, partially offset by the issuance of US$200 million in Additional Notes to the Senior Secured Notes due 2032, announced in April 2025.
Lease liabilities were Ps.2,756 million, 30% lower compared to Ps.3,917 million in the previous year.
Cash and cash equivalents, as well as restricted cash in trusts, was Ps.6,477 million, compared to Ps.10,008 million a year ago. As a result, the company’s net debt was Ps.51,756 million, 5% lower compared to Ps.54,715 million in the previous year.
The debt ratio — Net Debt / EBITDA of the last two quarters annualized — was 2.62 times.
Total Play’s fixed assets — which include accumulated investment in fiber optics, telecommunications equipment and subscriber acquisition costs, among other assets — were Ps.79,312 million, compared to Ps.85,944 million a year ago.
About Total Play
Total Play is a leading Triple Play provider in Mexico that, thanks to the widest direct-to-home fiber optic network in the country, offers entertainment and technologically advanced services with the highest quality and speed in the market. For the latest news and updates about Total Play, visit: www.totalplay.com.mx.
Total Play is a Grupo Salinas company (www.gruposalinas.com), a group of dynamic, fast-growing, and technologically advanced companies focused on creating economic value through market innovation and goods and services that improve standards of living; social value to improve community well-being; and environmental value by reducing the negative impact of its business activities. Created by Mexican entrepreneur Ricardo B. Salinas (www.ricardosalinas.com), Grupo Salinas operates as a management development and decision forum for the top leaders of member companies. Each of the Grupo Salinas companies operates independently, with its own management, board of directors, and shareholders. Grupo Salinas has no equity holdings. The group of companies shares a common vision, values, and strategies for achieving rapid growth, superior results, and world-class performance.
Except for historical information, the matters discussed in this press release are concepts about the future that involve risks and uncertainty that may cause actual results to differ materially from those projected. Other risks that may affect Total Play and its subsidiaries are presented in documents sent to the securities authorities.
Investor Relations:
Bruno Rangel
Rolando Villarreal
+ 52 (55) 1720 9167
+ 52 (55) 1720 9167
jrangelk@totalplay.com.mx
rvillarreal@totalplay.com.mx
Press Relations:
Luciano Pascoe
Tel. +52 (55) 1720 1313 ext. 36553
lpascoe@gruposalinas.com.mx
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V.
Consolidated Quarterly Income Statements
(Millions of Mexican pesos)
1Q 25
1Q 26
Change
$
%
$
%
$
%
Revenue from services
10,843
100 %
11,177
100 %
334
3 %
Cost of services
(1,597)
(15 %)
(1,663)
(15 %)
(66)
(4 %)
Gross profit
9,246
85 %
9,514
85 %
268
3 %
General expenses
(4,164)
(38 %)
(4,665)
(42 %)
(501)
(12 %)
EBITDA
5,082
47 %
4,849
43 %
(233)
(5 %)
Depreciation and amortization
(4,319)
(40 %)
(4,548)
(41 %)
(229)
(5 %)
Operating profit
763
7 %
301
3 %
(462)
(61 %)
Financial cost:
Interest revenue
56
1 %
30
0 %
(26)
(46 %)
Accrued interest expense
(1,770)
(16 %)
(1,581)
(14 %)
189
11 %
Change in fair value of financial instruments
(924)
(9 %)
(3)
(0 %)
921
100 %
Other financial (expenses) income
(200)
(2 %)
31
0 %
231
—
Foreign exchange (loss) – Net
(40)
(0 %)
(149)
(1 %)
(109)
n.m.
(2,878)
(27 %)
(1,672)
(15 %)
1,206
42 %
Loss before income tax provisions
(2,115)
(20 %)
(1,371)
(12 %)
744
35 %
Income tax provision
154
1 %
44
0 %
(110)
(71 %)
Net loss for the period
(1,961)
(18 %)
(1,327)
(12 %)
634
32 %
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V.
Consolidated Statements of Financial Position
(Millions of Mexican pesos)
As of March 2025
As of March 2026
Cambio
$
%
$
%
$
%
ASSETS
Current Assets:
Cash and cash equivalents
7,132
6 %
4,342
4 %
(2,790)
(39 %)
Restricted cash in trusts
2,876
3 %
2,135
2 %
(741)
(26 %)
Customers – net
2,902
3 %
3,016
3 %
114
4 %
Recoverable taxes
3,365
3 %
2,293
2 %
(1,072)
(32 %)
Inventories
2,416
2 %
2,146
2 %
(270)
(11 %)
Derivative financial instruments
193
0 %
–
0 %
(193)
(100 %)
Other current assets
873
1 %
883
1 %
10
1 %
Total current assets
19,757
18 %
14,815
15 %
(4,942)
(25 %)
Non-Current Assets:
Property, plant and equipmente – Net
85,944
77 %
79,312
81 %
(6,632)
(8 %)
Rights-of-use assets -Net
2,849
3 %
1,652
2 %
(1,197)
(42 %)
Trademarks and other assets
2,620
2 %
2,464
3 %
(156)
(6 %)
Total non-current assets
91,413
82 %
83,428
85 %
(7,985)
(9 %)
Total assets
1,11,170
100 %
–
98,243
100 %
(12,927)
(12 %)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-Term Liabilities
Financial debt
9,240
8 %
5,435
6 %
(3,805)
(41 %)
Lease liabilities
2,367
2 %
1,749
2 %
(618)
(26 %)
Trade payables
12,719
11 %
9,913
10 %
(2,806)
(22 %)
Reverse factoring
1,483
1 %
278
0 %
(1,205)
(81 %)
Other short-term liabilities
3,814
3 %
3,255
3 %
(559)
(15 %)
Total short-term liabilities
29,623
27 %
20,630
21 %
(8,993)
(30 %)
Long-Term Liabilities
Financial debt
51,566
46 %
50,042
51 %
(1,524)
(3 %)
Lease liabilities
1,550
1 %
1,007
1 %
(543)
(35 %)
Employee benefits
101
0 %
148
0 %
47
47 %
Deferred income tax
12,950
12 %
13,741
14 %
791
6 %
Total liabilities
95,790
86 %
85,568
87 %
(10,222)
(11 %)
EQUITY:
Capital stock
8,201
7 %
8,060
8 %
(141)
(2 %)
Retained earnings
(15,836)
(14 %)
(17,171)
(17 %)
(1,335)
(8 %)
Other comprehensive income
23,015
21 %
21,786
22 %
(1,229)
(5 %)
Total equity
15,380
14 %
12,675
13 %
(2,705)
(18 %)
Total liabilities and equity
1,11,170
100 %
98,243
100 %
(12,927)
(12 %)
TOTAL PLAY TELECOMUNICACIONES, S.A.P.I. DE C.V.
Consolidated Statements of Cash Flows
(Millions of Mexican pesos)
3M 25
3M 26
$
$
Operating activities:
Loss before income tax provision
(2,115)
(1,371)
Items not requiring the use of resources:
Depreciation and amortization
4,320
4,548
Employee benefits
9
10
Items related to investing or financing activities:
Accrued interest income
(56)
(30)
Accrued interest expense
1,770
1,581
Other financial transactions
1,122
(27)
Unrealized exchange (gain) loss
(89)
262
4,961
4,973
Resources (used in) generated by operating activities:
Customers and unearned revenue
315
134
Other receivables
–
2
Related parties, net
53
(104)
Taxes to be recovered
353
260
Inventories
292
400
Advance payments
(76)
(179)
Trade payables
(906)
(1,092)
Other payables
299
434
Cash flows generated by operating activities
5,291
4,828
Investing activities:
Acquisition of property, plant and equipment
(2,601)
(2,425)
Other assets
(234)
75
Collected interest
56
31
Cash flows used in investing activities
(2,779)
(2,319)
Financing activities:
Capital repayments
–
–
Loans (paid) received
4,312
(58)
Leasing cash flows
(822)
(449)
Restricted Cash in Trusts
(488)
(371)
Reverse factoring
(107)
(80)
Derivative financial instruments
265
–
Interest payment
(1,895)
(1,541)
Cash flows used in financing activities
1,265
(2,499)
Net increase in cash and cash equivalents
3,777
10
Cash and cash equivalents at the beginning of the year
3,355
4,332
Cash and cash equivalents at the end of the year
7,132
4,342
View original content:https://www.prnewswire.com/news-releases/total-play-announces-revenue-of-ps11-177-million-and-ebitda-of-ps4-849-million-in-the-first-quarter-of-2026–302752403.html
SOURCE Total Play Telecomunicaciones, S.A.P.I. de C.V.
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