Please stand by. We're about to begin. Good afternoon, ladies and gentlemen, and welcome to the Heidrick & Struggles Q1 2022 Earnings Conference Call. Just a reminder, today's call is being recorded. At the end of today's prepared remarks, we will have a question-and-answer session. To ask a question, please press star one. Now I'd like to turn things over to Suzanne Rosenberg, Vice President, Investor Relations. Thank you, and welcome to our 2022 first quarter conference call. Also on today's call is our President and CEO, Krishnan Rajagopalan, and Chief Financial Officer, Mark Harris. We've posted our first quarter slides on the IR homepage of our website at heidrick.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. A reconciliation between GAAP and Non-GAAP financial 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 contained in today's press release. Krishnan, I'll now turn the call over to you. Thank you, Suzanne. Before I begin my prepared remarks on our results and outlook, I wanted to take a moment to pause in order to share our sentiments about the conflict continuing between Russia and Ukraine. As a firm, Heidrick has condemned the war, and we have ceased our operations in Russia. This includes no longer continuing to serve any Russian-headquartered clients. As a global team, we continue to provide support to our colleagues, clients, and their loved ones who've been impacted, offering resources to help secure their safety and provide comfort. Our firm is also contributing to organizations providing humanitarian assistance to the people of Ukraine, and we will continue to provide further support when and where we are able to do so. Moving on to Heidrick's performance and our strategic progress. First, I'd be happy to share some highlights from our first quarter and the success of Heidrick & Struggles' differentiated strategy that is unfolding organically and inorganically as we anticipated. We like our expanding position with its unique and targeted focus on the top-end marketplace needs for talent, leadership, and human capital across industries and geographies. I'll talk a bit about our three businesses, the exceptional productivity of our Executive Search business, the critical advisory work of Heidrick Consulting, and the high trajectory growth from our On-Demand Talent segment. Then briefly touch on digital product research and development. We're on track to deliver strategic diversification in business mix over the long run. Finally, before handing the call over to Mark, I'll close with thoughts about how each of our three lines of business purposefully and powerfully reinforce and contribute to the growth and success of the others, thereby making the value of the whole greater than its parts in a perpetuating multiplier effect here at Heidrick. First, stepping back for a moment, I'd like to say that this is an incredibly exciting time for our company. On a macro level, it's a time of tremendous change and fast-moving decision-making for our clients around the world. I call it a season of more, where the job of leadership for boards and CEOs is getting tougher and more complex. More is at stake as companies emerge from the pandemic with larger scopes of responsibilities in more places. More is uncertain as the velocity of change increases exponentially. Boards and leaders are navigating through constantly shifting priorities, navigating crises, and addressing larger issues much faster than ever before. More is expected of leadership with increased accountability to get it right across more time zones and with greater speed and agility. As we continue to build out our exceptional suite of products and services, Heidrick is front and center with our clients, advising them on how to meet the challenges of these new imperatives of more. I'm proud of how the Heidrick team has delivered on the more that's been asked of them, and it's gratifying to be able to report out on our excellent results from our first quarter 2022 and share our near-term outlook. Today, we announced consolidated net revenue of $284 million, 47% higher year-over-year, a record for the first quarter and the second highest quarter in our company's history, exceeding expectations. Executive Search, our largest contributor in absolute terms, had net revenue of $243 million for the quarter, 35% higher than last year, a remarkable achievement. We believe we continue to gain market share with an outstanding trailing 12-month productivity of $2.5 million per consultant. We're still running at 100 miles per hour with the team delivering tremendous efficiency to the company and its shareholders and to clients. Exceptional business acumen. Also, in Q1, our Executive Search set a new quarterly record for confirmation volume, which was 16% higher than the previous high-water mark achieved just last quarter. This was the best confirmation quarter for our Executive Search business in our history across every region in nearly every practice. Expanding and strengthening our geographic footprint is a high priority at Heidrick. For example, we just announced new Executive Search partners and principals who have joined the Heidrick team in several international markets, including São Paulo, Mexico City, Tokyo, Dubai, Amsterdam, Stockholm, and London. We like our growing global footprint. Turning to Heidrick Consulting. Heidrick Consulting had $18 million in net revenue, a record for the first quarter. This was an impressive 28% higher than last year. This segment delivered another milestone in the quarter with its highest quarter ever of new business wins, while also setting record revenue backlog stats. We grew the value-added leadership advisory work performed by Heidrick Consulting, especially in the critical areas of leadership assessment, culture shaping, and leadership development. Our Heidrick Consulting colleagues are an important part of our company's success. From our newest segment, On-Demand Talent, we are seeing significant benefit from this adjacency acquisition we made last year. With first quarter 2022 revenue of more than $23 million, 66% higher than last year, Heidrick is the clear market leader in securing high-end project and interim on-demand talent. It's relatively easy to understand the incredible value add for our clients in need of interim executive talent for, say, an interim CFO or CIO. It's also impressive to share an example of the type of quality project work our On-Demand Talent business performed during the quarter. Project-based work represents the majority of the work we do in On-Demand. Take the case of a major energy company. Following a merger, this company's strategy and corporate development leaders faced a need for implementation of major cost reduction through changes in procurement, network optimization, and global supply chain program management. Heidrick's On-Demand Talent group delivered four seasoned experts to this client, a program manager to identify cost reduction opportunities, a logistics expert to renegotiate contracts, a supply chain optimization expert, and a transformation consultant to lead these four distinct work streams to successful completion. It's just this sort of high-value combination that creates a win-win for our clients, the independent consultants, and for Heidrick's On-Demand Talent business and our shareholders. While still on the topic of our On-Demand Talent business overall, just one year in from our acquisition of BTG in April of last year, I'd like to share the impressive fact that a remarkable 20% of the segment's Q1 revenue was referred to by our Executive Search and Heidrick Consulting colleagues. Our On-Demand Talent segment is now on a noteworthy annual revenue run rate of more than $90 million. We believe we will see growth here for the foreseeable future. All of this has us excited about Heidrick's overall future growth and opportunities for success. Following these record Q1 results, our guidance for a record second quarter reinforces our confidence in our strategy and in delivering for our shareholders. Our diversification strategy is underway at Heidrick & Struggles, and we are seeing the results. We do expect our Executive Search business, still more than 80% of our total net revenue today, to continue on a path of notable growth. At the same time, our non-search businesses, Heidrick Consulting, On-Demand Talent, plus other adjacencies still to come, are likely to grow even faster. We think this approach to the diversification of our business model will prove valuable to shareholders. As Mark will share in a moment, starting in the first quarter, we've given visibility to expense associated with innovative digital product research and development here at Heidrick. We've defined marketplace problems in the areas of, for example, mobility and succession planning that we think can best be solved by our development of unique digital products utilizing the latest in data analytics, AI, and machine learning. The first product should be ready for beta testing with clients in the coming months. It's gratifying to see the mutually reinforcing and complementary businesses were combined uniquely at Heidrick, where one business segment can provide performance accelerators for another segment. It's proving out in our strategic execution. We've said that when we can drive interconnectivity, such as leads on talent assessments on leaders, teams, and cultures, and new digital solutions, our overall success is redoubled. Valuable cross-collaboration at Heidrick is working. We're proud of the culture and professionalism making this happen. We think this sets Heidrick meaningfully apart from others in our talent and human capital sector. It's a powerful engine driving growth at Heidrick. In closing, the results we released today show the impact of our deliberate strategic focus on growth and diversification and the tremendous resiliency and professionalism of our team here at Heidrick amid an environment where the demand for our services and offerings is strong. I'm proud of the amazing agility and exceptional capacity of our professionals, and I want to thank the entire team for another outstanding quarter and for their individual and collective contributions to Heidrick's success to come. With that, over to Mark. Thank you, Krishnan, and good afternoon, everyone. Thank you for joining our 2022 first quarter earnings call. As Krishnan noted, we've delivered yet another record quarter, our fifth record-setting quarter in a row in terms of top-line revenue growth delivered by all three businesses in all regions. Just as importantly, on a consolidated basis, this quarter also set records in all key underlying profitability measurements. As you will hear in my prepared remarks, our markets remain strong, and moreover, our teams are executing flawlessly within them. Thank you to everyone at Heidrick & Struggles for your continued hard work. Your accomplishments are astonishing to see. Krishnan spoke about our high-level achievements, execution, and vision, allow me to overlay that with some financial context around the first quarter figures we reported today. I'll start with a run-through of our financial results, make comments on a few balance sheet items, and share our second quarter outlook. Lastly, I will close with some important perspectives on valuing Heidrick, particularly given the transformation of our business model. Just taking a view from a consolidated basis, you'll see our net revenue in the quarter reached $283.9 million, which was an impressive 47% higher than in the prior year, which was a record on its own. Net revenue growth was driven by all regions and practices in Executive Search, the continued growth of our On-Demand Talent platform, and expansion in sale and execution of assignments in Heidrick Consulting. For more color on our performance, let's turn to the three business segments. In Executive Search, net revenue was $242.5 million in the first quarter of 2022, 35% higher than in the prior year. Looking at our search results geographically, all regions demonstrated growth. The Americas region was up by 40%, Europe was up 32%, and Asia grew by 19% when compared to the prior year quarter. All industry practices showed growth year-over-year as well, combining for an increase in billings of 37%. With all the regional and industrial sector success, we put a remarkable $2.5 million trailing 12-month productivity per search consultant on the board in the first quarter, a 56% increase compared to last year's trailing 12 months of $1.6 million. To reiterate a comment from last quarter, we do believe over the long run, we will modulate within a range between $1.8 million and $2 million productivity per consultant. This range is still outsized productivity and impressively higher than even our pre-COVID 2019 high water mark of $1.7 million productivity per consultant, mainly due to changes in our search process and digital enhancements. On-Demand Talent has exceeded expectations yet again with the first quarter revenue of $23.4 million. This was over 60% higher than last year when BTG was a standalone company. Trailing 12-month net revenue per client for our On-Demand Talent business was $367,000 in the first quarter, 25% higher than by that metric in the prior year. At an annualized revenue run rate of approximately $94 million, Heidrick & Struggles' On-Demand Talent business, which plays in the high-end level of talent, is the clear market leader in North America and appears to be gaining market share. Regarding Heidrick Consulting, their first quarter net revenue rose to $17.9 million, up 28% compared to the prior year quarter. Krishnan mentioned, like all three segments, Heidrick Consulting continues to benefit from the collaboration within the company, while also bringing new business opportunities to Executive Search and to our On-Demand Talent segment as well. Our greatest gains in the quarter were in the areas of leadership assessment, followed by culture shaping and leadership development. Heidrick Consulting continues to be very strong, with first quarter backlog up 58% compared to the prior year. We believe Heidrick Consulting's momentum has set them up nicely for this year and continues to build. Now let's turn to operating expenses. With record-setting quarter net revenue and higher volumes of work, naturally, this comes with higher compensation and other variable costs, which was expected and a positive when overlaid with our revenue performance. For example, we saw consolidated salary and benefit expense of $201.4 million in the quarter, 42% higher than the prior year, but somewhat lower as a percentage of net revenue at 71% in the first quarter of 2022 versus 73% for the same period last year. While these increases were driven by bonus accruals pertaining to our revenue gains, we are getting scale in Executive Search but would temper this with the expectations that the war on talent will continue to be a systemic pressure as we move through 2022. When looking at general and administrative expenses, we saw $29.8 million in the first quarter, a modest increase compared to $27.4 million in the prior year quarter. As a percentage of net revenue, G&A expense were 10.5% for the quarter, which was solid improvement over the 14.1% shown in the prior year quarter. Most of the increase of the $2.4 million was related to travel expenses and some other expenses around our upcoming May global conference, which we have not had in three years due to COVID. Expect an increase in G&A expense in the second quarter of around $4 million. Turning to cost of services, we saw an increase to $18 million in the first quarter, compared with $1.5 million in the previous quarter, which was mostly due to the acquisition of our On-Demand Talent business. As a reminder, this line item is where we expense the payments to independent consultants who perform high-level projects and interim work in On-Demand Talent, which is a percentage of revenue. Thus, as revenue continues to grow, so will cost of services. As Krishnan noted earlier, this quarter we showed a new category of expense, research and development, which captures costs associated with the new digital product development Heidrick is working on. We logged $4.4 million on this line item for the first quarter of 2022, representing 1.6% of net revenue. We expect this to grow modestly over the next several months to around a $20 million annual run rate in 2022, with some capitalization in accordance with generally accepted accounting principles. That capitalization will amortize upon product introduction into the market. We're pleased to report Q1 operating income of $30.2 million, 54% higher than operating income in the prior year, an operating margin of 10.7%. When accounting for the first time R&D expense to see a more comparable operating income and margin to the previous quarter, you will note our operating income would be $34.6 million and 12.2% margin compared to $19.6 million and 10.1% margin. That's a 77% increase in operating income and just over 200 basis points of margin expansion on a like-for-like basis. Speaking of profit metrics and margins, adjusted EBITDA in the first quarter was $35.7 million, and adjusted EBITDA margin was 12.6%. Again, when accounting for R&D, our comparable adjusted EBITDA was $40.1 million and EBITDA margin of 14.1%, which compares to adjusted EBITDA of $29.9 million and adjusted EBITDA margin of 15.4% in the previous year's quarter. I'm very pleased with the $10.2 million growth in EBITDA generated by our core business verticals. Remind all that we expect EBITDA margin compression as our On-Demand Talent business EBITDA margin is 1.5% will be low during their high-growth cycle, which is a good trade given the revenue gains in 2021 and 2022. We finished the first quarter with the benefit of a slightly lower effective tax rate of 33.7% compared to the prior year quarter, leading to net income of $18.5 million and diluted earnings per share of $0.90. However, to make consistent with R&D expense, our net income was $21.4 million and diluted earnings per share of $1.05, which is higher by 45% and 42% respectively from the prior year quarter. This demonstrates our core business is performing very well and surpassing expectations. On the balance sheet at March 31st, we ended the quarter with cash and cash equivalents of $268 million, which is almost $84 million more than at the same time last year. As we've discussed before, the company's cash position typically builds through the year as employee bonuses are accrued. Employee bonuses are paid out in the first quarter, along with their associated tax and related costs. Our balance sheet, coupled with our renewed and expanded Heidrick credit facility of $200 million, shows that we have the strength and flexibility to meet our future investment objectives and to pursue continued growth. We ended the quarter with nearly $470 million of liquidity, giving Heidrick significant dry powder for organic and inorganic growth. Now let me turn to our second quarter 2022 guidance. Given the continued strong Executive Search project volumes and effective productivity, we are seeing so far, coupled with growth expectations from both our On-Demand Talent business and Heidrick Consulting, we believe our second quarter net revenue will be in the range of $290 million-$300 million. This would be a quarterly record for Heidrick, while further establishing solid momentum for the first half of 2022. Please be reminded, our guidance can be impacted by unanticipated inflation responses by central banks, continued and escalating global conflicts, and deepening supply chain challenges. This management team will continue to monitor those situations and ensure that we're agile and plot the best long-term course through any challenge. Before concluding, last quarter, I spoke about our value drivers in that our core business, namely executive search and Heidrick Consulting. Our historical business has been valued on an adjusted EBITDA and adjusted EPS multiples. When using these methods, our on-demand business will be severely undervalued. For example, using Heidrick's market EBITDA multiple of around 6.5x today, and given our on-demand EBITDA of $0.3 million in the first quarter of 2022, we'd see a value of approximately $8 million for a business generating annualized $94 million of revenue. The methodology used for on-demand companies are valued between 1x and 2x revenue multiples, given their growth cycles and reinvestment of liquidity. Thus, this would put our on-demand valuation around $140 million. In short, the difference in valuation methods creates a valuation gap of $132 million. We believe that until the On-Demand Talent market matures, the proper way to view our diversified strategy is a sum of the parts method, as this would more accurately capture the full value of our businesses. Let me conclude that while we're still in the race with many miles to go to the finish line of our long-term strategic vision, we're very proud of both the quality and differentiated products and services Heidrick & Struggles expects to continue to deliver to our clients each and every day. As Krishnan and I have noted, we're very pleased with our performance, and we are successfully delivering against the diversified strategy we embarked upon several years ago, has shown tremendous year-over-year growth. With that, Krishnan and I would be happy to take your questions. Thank you, Mr. Harris. Ladies and gentlemen, at this time, if you do have any questions or comments, simply press star one, and we'll pause for just one moment to assemble our queue. We'll take our first question this afternoon from Mr. Marc Riddick at Sidoti & Company. Hi, good afternoon, everyone. Hi. Hey, Mark. I wanted to start with just a couple of questions on the referrals and the pace of those and maybe what some of that might look like. Can you give a little more color as to what you saw there and maybe where it came from? Was it similar to revenue mix or industry verticals or how should we think about sort of the progress that was made there with the referrals there? Sure. You're talking. It's Krishnan here. Mark, you're talking about the referrals. Yes ... between to On-Demand and into Heidrick Consulting. Correct. Yeah, great. Look, what we're beginning to see in there is a broadening really in terms of the number of consultants getting involved as they're engaging and understanding the service offerings. With on-demand, we had a core group in the middle parts of last year, and we've expanded that significantly. That's what you're seeing. It tends to follow areas where there is some demand, by the way. Healthcare life sciences is an opportune spot for us over there. Consumer is as well. We're seeing some demand in there and consultants who are following that. Okay, great. Maybe if we could shift gears as to the adding of talent across the globe. Just wondering if you could talk a little bit about sort of what we might see there through the year and maybe whether it's from a competitive advantage standpoint or just opportunity of services and how we should think about those ads across the globe. Yeah. So, we've got a pretty strategic hiring plan for the year. We're very mindful of the markets, okay? We're not trying to get ahead of that, but there are pockets where we believe Heidrick is still underserved, and we tend to focus on those first. That's where you see some of the geographic hires that we've done. We see those to be wide-open opportunities for us. We're gonna continue on a cadence that looks like that. Culture matters an awful lot as well in terms of how we think about the team that we're attracting, and we're really happy with the new hires from that perspective. You'll probably see it at a similar pace to what you've seen it in the beginning of the year, and that's what we'll moderate throughout the year on our hiring plan. Okay, great. The last one for me, when you look at the productivity that you're seeing and you're expecting a moderation at some point to slightly lower levels, but I was wondering if you could talk a little bit about the amount of time it takes to ramp up new consultants to company average historically, and then what we might expect from that going forward, given how productive everybody is right now. Thank you. Yeah. I mean, that's a great question, and I think we're seeing the beneficiaries of that already, a little bit. Often, when we promote a new class, you don't see the productivity in aggregate go up. We see it go down. What you've seen is that it's actually ticked up a little bit for us this year, which is reflective of the market. It's reflective of some fantastic people we've promoted and the ability for us to onboard them into the consultant ranks and see their productivity. I do expect that it's gotten better, not just because of the market, but because of some things we're able to do as well in terms of assigning them to accounts and how we operate with them. There's good news there. Excellent. Thank you very much. Thank you. Thank you. Just a reminder, ladies and gentlemen, star one for questions. We go next now to Kevin Steinke at Barrington Research. Hey, good afternoon. As you were just discussing, you know, really the productivity in the search business continues to be very impressive. You talked about some of the long-term growth drivers for you in the market. It doesn't appear that you've really seen any slackening in the pace of demand going into the second quarter here, given your guidance. You again referenced how you expect productivity to gradually trend down to levels that would still be above pre-COVID levels. I think, you know, on last quarter call, you mentioned maybe some moderation in search, just the pace of the search business in the second half of this year. Is that something you would still anticipate? You know, has the momentum here kinda shifted as we move into the second quarter? Just maybe any commentary on any sort of visibility you might have over the next few quarters here? It's Krishnan. Let me go, and then Mark, why don't you augment what I'm gonna say here. Look, I think as we look ahead to the second quarter, there's tons of momentum heading into the second quarter. We certainly do expect that, between some of the conflicts that are happening, Ukraine, Russia, supply chain inflation, that there will be some moderation that we should expect to see in the second half of the year as a result of all that. What does that mean? As I believe I said this before, I don't think, you know, we're running 100 miles an hour. We're gonna be maybe running 85 miles-95 miles per hour. This is not a slowdown that we are seeing typical to what we may have seen before. That's kind of our outlook right now for the second half of the year. A little bit of a slowdown, but nothing that significant. Yeah. I would only kind of pepper in that. Remember, when we did the Q1, we were expecting a slowdown because that's typically when we do a lot of our promotionals, so it's more of a denominator on an inflection, so to speak. There are two things that kinda help offset that. I think the two offsets were, one, first quarter was obviously a very good quarter in terms of our performance, and you can see that in our operating metrics and obviously our revenue number. And then two, when you kind of promote into the consultant ranks- Within a strong market, they actually came with a very good book of business in and of their own. It was one of those where we didn't see as much of an impact on it. As Krishnan rightly points out, as we kinda roll into the second half, I would imagine the ability to sustain the first half into the second half is going to be challenging. I don't think it's gonna be a monster drop-off. I just think it's going to be a little bit of a slower pace that kind of will feel a little bit slower but certainly be a heck of a lot higher than what you've ever seen historically in 2018 and 2019. All right, understood. Thanks. Are you hearing anything from clients in terms of, you know, how they're thinking about or planning in, you know, an environment where interest rates are expected to go up and, you know, any concerns about maybe a hard landing? Do you think that's factoring into clients' expectations currently in terms of how they're thinking about, you know, some of the work they're doing with you or, you know, their hiring plans? Yeah. I mean, I think everybody's trying to figure out exactly if and when the slowdown occurs and what that timing begins to look like. There are lots of conversations, and each and every day you see volatility in the equity markets as well. There's a lot of moving parts to this. I think everybody feels like they're all running pretty fast. There isn't anybody that we're speaking with who thinks that there is a steep fall to this right now. That doesn't mean that if you don't look longer term out there, that we might see something like that, but that's what we're hearing from clients right now. Okay. Thanks. Yeah, I just wanted to try and get my arms around this, the R&D expense category that you introduced here in the first quarter. I know you've been talking about your digital product development efforts over the last few quarters and just trying to get a sense as to what has caused you to have to break out that expense separately now. Is it just large enough to where it has to be done, and there wasn't any significant expense on that front in previous quarters? Or just maybe a little more color on, you know, how that is required to be factored into the numbers now. It's a great question, Kevin. Let me try to answer it for you. I think the first aspect was, as you rightly pointed out, we've been speaking to this for quite some time in terms of investing ourselves into the future digitization of a lot of our different verticals. That includes on-demand, executive search and Heidrick Consulting. We have really done an internalization of an initiative that really creates a core group of team members that are really helping us out. We made the comment, I believe it was last quarter, with Eightfold AI and the partnership, and that was good indication in terms of how we were really trying to rethink, our transformational process on this. Given that we are very dedicated to this as being our future and our growth, and the numbers, as you rightly point out, are significant. Last quarter, as you can see, we don't have anything. It was very de minimis, as we start up this side of our cycle. We will be investing our excess cash, if you will, into this business. It's something we feel very passionately about in terms of how we need to restructure ourselves for the future. I think, you know, as we develop the products and they come to market and you start to see them, I think that's really gonna resonate quite well with our investor base in terms of where we're going, in a very interesting direction. It is not a change from what we do today. It is a complete enhancement of what we do today and makes us, I think, much more into the views of our clients, making sure that we're there at all times. That's the reason we broke it out. We think it's important for our investors to see it. It was de minimis last quarter as we ramp up into it. It is basically a combination, as you can imagine, of selling benefits in G&A, so to speak, but real focus obviously on our investment in it. That's what we're trying to do. Okay. You know, I know it's still early days here, but how do you think about or how should we kinda think about perhaps the revenue and profitability model for some of the digital products you're working on, and do you view those products as kind of a cross-sell along with, you know, your existing consultant engagement, for example, or something that's embedded along with other engagements you're working on? Just maybe some color around the business model and the financial model, as you're kinda envisioning it going forward. Yeah. Let me start with that a bit. Look, I think that as we're thinking about the financial model, 2023 is when we're, you know, hoping to see some revenue that emerges from there as a result of all the beta and work that we're gonna be doing with clients. So that's, you know, just putting it out there. I think that's sort of the timeframe to think about that. I think it's a little bit of all of the above with on how that gets embedded with clients. I mean, it's like we do that with on-demand as an example, okay? So, we're working through the Heidrick channels, and we've got an independent channel that we do that, and we're gonna do exactly the same with this set of products as well. Our Heidrick Consulting, Heidrick Search, all of our core accounts, we'll be exposing them to those through that process. There'll be other opportunities as well that we think. That sits outside of that, so those will be a different sales force that we'll have to build. That's kinda what we expect to be doing over the course of the remainder of this year and probably more into next year really in terms of building that team. It'll be proof of concept for the next six months or so. That's right. I would also add to that, Kevin. It's a decision that we as management team really felt like we needed to make. We could have not invested and returned at $1.05 of EPS like I made comments around. Our decision was this is something that we feel is gonna pay very large dividends down the road for us. We decided to make that investment. From a core business point of view, throwing off $1.05 obviously was very important, which is why I wanted to make sure we had that conversation embedded in the remarks. We do wanna take this time to really reinvest in our strategy on the digitization side of it. We think it's well worth it. Thank you. We'll take our next question now from Tobey Sommer at Truist Securities. Thanks. A couple of questions aside from the digitization effort, then I'd like to revisit that, also follow up. You cited a pretty good rate of growth, I think, in the backlog. I don't know if backlog is the right term, but kind of bookings for consulting. Is that measure of almost 60% growth a useful tool in modeling future quarters, or is that the duration of kinda those bookings? You know, are there any other factors we need to consider that would not make that sort of a good modeling factor? No, I think it. Tobey, it's Mark. It's a good modeling factor, right? What that should tell you, and I know what it tells me, is that we've got a great book of closed business that we're still executing on. For the most part, Heidrick Consulting is on a revenue recognition percentage of completion. If you think of the backlog being much higher, it's in there, it's being worked on, it'll come to the P&L. It gives a lot of stability in terms of the variability of the revenue, which is why you've seen some pretty good stabilization on a quarter-on-quarter basis in the revenue side for Heidrick Consulting. I think there's that one element. I think the other element is hopefully we hope to build upon that base, and to continue. Obviously, execution will still be important, but the more we can kinda build and have that kind of going through, the P&L, I think it gives a nice level of confidence. As you kinda see us in Q1 and maintaining kinda that pace or potentially higher pace into Q2, as we kinda go through that backlog, I think is a nice indication, which is, you know, kind of what you saw last year when we were 20% up. Is there any kind of particularly scalable element to that? Or in order to kinda get that kind of growth, would you have to have, you know, pretty rapid internal headcount growth to accompany it, you know? Well, there's two answers to that question. I think the first answer is on the organization that attains that revenue. Obviously, you need a little bit of scale to kind of go and engage into our clientele. I think the other one is the delivery element of it, which you'll see sometimes some fluctuation in cost of services pertaining to Heidrick Consulting, which again, if we have a lot of work and we have lack of capacity, we're going to have to use external parties to help us deliver on those services, which will, you know, again, bite a little bit on the margin side of it. Nonetheless, the right thing to do as we hire, as hopefully we drive that number down, which really shows what I would call the self-sustainability of the revenue that is being serviced by our core team that kind of work with Heidrick. It's a little bit of both is the answer, depending on which side of the equation you wanna look at it from. Yeah, we continue to tech enable those businesses. Fair comment. The tech enablement of those businesses allows us to find that leverage, allows us to work on larger projects as well. I think that's a real benefit to what we're trying to do there. Okay. In terms of like the guidance you have for the second quarter, does that include an assumption for a sequential decline in consultant productivity or stable? How do you think about that? I know you've got your longer-term view on where things settle, but what does the guidance assume? I would say that from an Executive Search point of view, we would expect that to be kind of where we're seeing it right now. There's not gonna be a tremendous differential in that, at least that's our expectation. Within Heidrick Consulting, we would expect it to be up a little bit in terms of their productivity side. As you know, On-Demand Talent, we really don't look at it in that regard. Okay. Now I'd like to switch to the digital platform, just ask a couple questions. Let's say you were done, or not done, but at a point where you're gonna kinda describe what you're doing and what customers are gonna buy from you and why it's great today. How much of a head start would you have on potential Executive Search competitors that would wanna replicate what you do or do it slightly differently but similarly? How much of a head start do you think you would have at that point? That's a great question. I'm gonna say that we would probably have a 6-9 months at least head start on most, maybe, you know, even a bit longer than that, in terms of that. I mean, what you gotta remember, I think one of the key things is, at Heidrick, we have a huge brand head start, I think, in terms of where we're operating, where we're trying to position these things. I think the technology can catch up, but the ability for the team to be able to engage and to be authentic with clients, to be able to talk about these things, that's where we have a pretty large head start as well. We've been talking to 50-plus clients about these ideas and trying to get a sense of whether they're important or not and how we're presenting them. Do they solve a real problem? I would tell you that overwhelmingly, incredibly positive response from our clients in terms of the sets of problems that we're trying to solve and how important that they are to them. We feel very positive about that. Okay. Yeah, I was just kinda curious about the head start because while $4 million in a quarter adds up to some nickels in terms of EPS in a quarter, it's, on an absolute basis, not a lot of money. Right. Okay. At what point throughout the year do you think we're gonna be in a spot to kind of have a bigger, more tangible reveal rather than talking around this initiative? It'll be towards the latter half of this year without any question. I mean, where we are right now is piloting, getting client feedback. That'll then go back into the product. It'll cycle one more time at least to go out of beta, and I think that's the point at which we'll be ready to have the bigger reveal, as you're saying over here. There are lots of little facets to the product suite and what we're working on that are very, very attractive and solve a set of different issues for clients as well. Look for it in the latter half of this year. Okay. If I could sneak one last one in. What are you seeing recently in your financial services vertical? I saw the slide, so I know what the growth was year-over-year. Since capital markets have slowed, IPOs, M&As slowed, any changes in the demand and compensation trends within that vertical? You know, that vertical has been quite strong for us, really, despite everything, okay? It's probably the one that we keep our eye on the most given all the pressures that we are seeing in the marketplace. I think, you know, we see a lot of private equity play still inside of there, so there's momentum with that. You're right, some of the more traditional things are probably a little slower, but fintech, payments, things like that, are on fire. It's a balancing act inside of there, and we've got a great team that's agile and we've got a sector focus to it, so we've got expertise that drives it as well. I think we're in a good spot to be able to pivot as needed, but it's clearly something we're keeping our eye on. Thank you very much. You're welcome. Thanks, Tom. Thank you. Ladies and gentlemen, just a final reminder today, star one for any further comments or questions. Ladies and gentlemen, it appears we have no further questions today. Mr. Krishnan Rajagopalan, I'd like to turn the conference back to you for any closing comments. Thank you everyone for joining our call today. Clearly the results that we announced today were impressive. We're working very hard to continue to deliver value to our Heidrick clients, our employees, and growth to Heidrick shareholders, all within the framework of our strategic vision. We look forward to updating you again in the next quarter. Thank you so much. Thank you. Ladies and gentlemen, that will conclude today's Heidrick & Struggles Q1 2022 earnings conference call. We'd like to thank you all so much for joining us and wish you all a great remainder of your day. Goodbye. Okay. Ms. Rosenberg, are you still there?