Kevin Steinke: Good afternoon. If you could just touch on the choppy environment you’re seeing in Asia and Europe a bit more and what’s leading to that choppiness? And it sounds like at this point you expect Americas to be strong, but I guess you’d kind of be on that to look out to have that also start to impact Americas, but just any thoughts on the overall environment overseas and the U.S. and globally?
Tom Monahan: We’re incredibly well-positioned with great teams in those regions. So, we — and we’re very, as you would guess, very close to clients and what’s gone on there. And there’s some real economic shop around the world right now, safety obvious, you have geopolitical events. You have macroeconomic factors that are swinging around a lot, and those are hitting some markets more than others. We feel great about our position in those markets. We feel great about the teams on the ground. And we are going to compete for and drive value even in choppy markets. So — but I’d say on balance, the macro drops a little higher outside the U.S. than it is inside the U.S. right now. Mark, anything you want to add there?
Mark Harris : No. Nothing to add. That’s great.
Kevin Steinke: Okay. I may have missed it, but maybe an update on progress with Heidrick Navigator and in addition to that, the kind of the development road map for additional digital products and services in the future.
Tom Monahan : That’s a great way. That’s exactly how we think about the question, which is Navigator is a terrific platform, which on its own, obviously, lots to intersect tightly with key client workflows. And it’s built to be a platform on which other digital products can be launched. So an easy example that Mark talked about was the Enterprise assessment platform. We are — we now have the ability to start to do assessment at scale, bring our IP to life regularly across broader populations, and that’s really, really a great tool. So beyond that, we’re going to — like anyone else, we probably can introduce new products faster than we can get them in front of our clients. So we’re going to be thoughtful and measured around delivering that road map.
But right now, we feel very good about the value props we’re able to put in front of clients and we’re tight. It’s great because it’s very consistent with what they expect of us that links us more tightly to their everyday work.
Kevin Steinke: Okay. Great. And Mark, just on the cost of services line, you talked about that being tied to on-demand talent. And just at what point do you think you can maybe start to get some expense leverage on that line? Or what would be the catalyst to do so?
Mark Harris : So we started to get a little bit on that, Kevin. So we started to see that it used to be $0.70, that’s kind of come down to $0.65. Atreus really kind of helps us achieve, I think, they’ve done some really interesting stuff. I think, the question on the table really is, look, how can you really make a meaningful change, move the needle, especially as it pertains to increasing margins of the business, so to speak. And my commentary there is scale is going to help considerably on the bottom line of things, trying to get that EBITDA up in the double digits. And I think the technology is the other angle, I don’t think people should discount that. The more we can evolve both in terms of their CRM and how we can integrate that across everything that we do and make it one CRM because right now, it’s been through acquisitions, so we still need to do that.
That’s what you’re starting to see in some of that R&D line item is really going to change the pace for us. We’ve got great vision on Tom Monahan, Tom Murrin, myself, the team, Sunny Ackerman et cetera, really start to sit down a footprint on paper on what we think that’s going to have to look like as well as Heidrick consulting as well as in other parts of our business is to come to one platform, one Heidrick, and I think that’s going to be important. I think that’s going to get us there. And I don’t think it’s — I don’t think it’s as far as a way as people would anticipate. I mean, again, when you do something like this, you’d expect a couple of years, two, three years of really getting all the bugs worked out, et cetera, and making sure it’s up and running and it’s been a shame that we want.
And hopefully, it’s got a really cool AI component to it. That’s the other element that we’re trying to think through. So I think that all comes together right away, because that’s where you’re going to see a meaningful shift in that number.
Kevin Steinke: Okay. Thank you. And Tom you articulated a vision of growing the business more quickly and expanding margins consistently. And you had mentioned the phrase client-led growth. I know early days, but any thoughts on how that all ties together over the longer term?
Tom Monahan: Sure. I mean, I expect, our goal is to grow all our businesses. So I think, obviously, we have a maintaining our status as the most trusted partner to the Board and C-suite is really important. And that means growing search, and tightly linking that to our executive assessment businesses. Those are top of the house businesses, and we see huge opportunities to grow our On-Demand Talent and our Heidrick Consulting offerings. There’s a lot going on there. The big simple headline is the client needs, we have massive client need. I’ve never heard a company in my career and business say, we have all the right leaders and all the right roles, doing all the right stuff. I thought, I’ve never heard any CEO articulate out loud.
And when they look at the drivers of performance, they lend invariably on people being the most important elements of great performance. So there’s huge market demand. We have exceptional team globally. We have incredible IP and our job in leadership is to just more routinely and reliably make it easy for clients to access more and more of that — of our great talent, great advice and great IP as they build their own businesses. And there’s as I said through clarifying where exactly we’re going to play, simplifying our work. So our people can do their jobs more effectively and then amplifying our great stories, we think we can really drive growth in all our businesses.
Kevin Steinke: Okay. Well, thank you for the insight. I will turn it back over.
Operator: Your next question comes from the line of Marc Riddick with Sidoti. Please go ahead.
Marc Riddick: Hey, good evening.
Mark Harris: Hello? Hi, Marc.
