Caldwell Partners International (TSX: CWL) Interview with CEO Christopher Beck

0:00Hey listeners, it's Paul Andreola here. When I join our community at Small Cap Discoveries, where we offer our members direct access to some of the best microcap investment opportunities available, our members are getting access to premium microcap financing, research reports, and direct access to management. Sign up today at www.smallcapdiscoverys.com. Hi everyone, welcome to the Small Cap Discovery's conference call. Today is February 19th, 2026. And today on our call, we have the CEO Chris Beck from Caldwell Partners. Caldwell trades on the TSX Exchange under the symbol CWL. And it also trades on the OTC under CWLPF. The company is currently trading at 96 cents with about 29 million shares of standing. We're about a $28 million market cap. I'd now like to hand it over to Paul Andreola. Hey, thanks a lot Trevor. Chris, great to have you here. We're just trying to reflect back and see if you'd ever presented to us before in terms of you haven't.

1:00But your predecessor did quite a while ago. So instead of doing a sort of an update, we'd love to hear the full pitch from you. So you've got your deck ready to go. So why don't I just hand it over to you? That's great, Paul. Thanks. Appreciate you having me on, you and Trevor. And yeah, my first time on your show, so I did just figure if I could tee up a little bit of who we are, where we're going, the strategy type of conversation. I'll start probably a lot of people do. My CFO would be very disappointed if I didn't display that I actually know what's going to happen in advance. But I'll try to be accurate. So a little bit about Caldwell, where we've been, where we're going, we are a talent acquisition services firm. So we are broadly known in Canada as an executive search firm. That's about 91 or over 90% of our, about 90% of our business. And then we have a separate segment IQ talent. That's about 10%. So the lion's share of what we do is retained executive search.

2:04So finding C-suite executives on a fully retained model within that, and we have that branded as Caldwell. Within that business, we also have our Caldwell Analytics team, which leverages behavioral and cognitive assessments against the executives that we place at our candidates. And we also do a small amount of organizational consulting around assessing teams and integrating people into their new platform. IQ talent is different in that it's an hourly on-demand model. Think of it more like a staffing firm of recruiters. So completely separate business. But they're providing candidate research or name generation. We call it sourcing, which means reaching out to candidates to see if they're interested, or full life cycle search at the lower level, all build hourly that you can turn on or off. So we find that these two businesses complement themselves a lot. We acquired IQ talent about five and a half years ago

3:07to broaden the business out. Executive search has maintained our core business. But we do try to have a reason to be in our clients other than episodic search work outside of the Fortune 500. Do you know there could be several years where there aren't executive searches available to fill in a company? And so this just keeps us present with their talent acquisition team a little more broadly. And you can see the range of compensation, Caldwell. We have a minimum fee of $75,000 at Caldwell. So our model is we generally charge one-third of a placed executives compensation. So people making 200 and above is where we target. And our average place compensation is around $400,000. But certainly can go up into the millions. And that is that executive search piece itself is about 90 million of that 91 million, just showing you the concentration of the business in what we're strongest in. So we've been around for over 50 years, actually 55 years now.

4:10Last year we did about 600 executive searches at the C-suite. And I'm focusing mostly on Caldwell now, since it's the lion's share of our business. Publicly traded since 1989. And we're known by many people having evolved out of placing one at ads in the globe going back in the day. So along legacy in Canada, our average search fee is about $125,000 Canadian in Canada. It's about the same in US dollars in the US. When you pull that through in the currency translation, our average fee on a consolidated basis turns out to be north of 170,000 Canadian. We've got about 50 executive search partners, 51, as of today to be precise doing these executive searches. So you can see that's about 12 searches per partner per year. 23 global locations, we were headquartered in Toronto. And that is our legacy. And that's still our headquarters. We have three offices in Canada, about 14, 15 years ago,

5:13we started branching out into the US and opened up our first US location. And I've spent a lot of time since then just building out the US, we entered into the London market in 2014 with a small boutique acquisition. And just this past September, we opened up a location in Dubai, where we hired one partner to start that business. We have another partner relocating this week from our London office to Dubai. And then we have a third partner starting in April, sitting out on Garden Leibh right now. So we'll have three partners in Dubai come April, which we're very excited for. Our growth strategy around that has really been to focus on where our clients are taking us. So largely focused initially Canada than the US, really leveraging that English speaking platform and culture to the UK. And then Dubai, again, just following our clients, we do have a lot of clients starting to branch out there, doing work in financial services, private credit.

6:15We do work for companies like Maztech in the US who are now getting into the data center buildouts in the Middle East. So making our growth not to plant flags all over the world, we are not all things to all people, but really trying to gain share at our clients and leverage those relationships as we methodically reach out to other geographies. And our revenue breakdown you can see of that 91 million executive search revenue of 72% to US, 18% Canada, and about 10% to the UK as far as the breakout. Dubai wasn't open yet, our fiscal year ends August 31st. So these are full year results ended August 31st. And we do have a relationship, I should note with the firm Johnson Partners, a referral arrangement where we team with them on search work in Australia and New Zealand, where they're quite strong and they push us business for work where we are. So team up, oh, I wanna present sort of what our strategy is and where we sit in the marketplace,

7:16but just two things I wanted to highlight for everyone is who may not be familiar with the executive search business itself. It's a pretty straightforward business model, right? You have for every firm out there, you've got the number of executive search partners you have, you've got the average fee we charge per search and you have, sorry, the number of search per partner and the number of partners. And that's what our revenue equals. So what we do, I'll talk to our initiatives on how we're trying to improve in each of these areas and drive revenue, but that's the business model for the industry. The other important thing to understand within the business that doesn't get a whole lot of attention sometimes is a topic called off limits. And what off limits refers to is what is an executive search firm's ability to go out into the marketplace and approach candidates at different clients for positions. So there's two big limiting factors around this. One is for every executive search that we do and this is standard across the whole industry, we'll agree to protect that company

8:16from us taking anyone else out for a period of time, usually a year. So by us doing a search for small cap discoveries, you would have protections from us taking someone out for generally speaking a year. At the same time, every candidate that we have on your search for a chief revenue officer, let's say, we, and this is again, standard across the industry, we will not put that candidate on any other search that we have going on as long as they're on my search for you as a potential candidate. And you could have anywhere from 20 to over 100 candidates on a search. You're doing thousands and thousands of executive searches, placing people at that many companies a year and you've got thousands and thousands of executive searches open, you're effectively blocking off a lot of the candidate pool of executives out there to approach for a position. And so this really comes into play when I frame up where we're trying, where we are in the marketplace

9:16and where we're trying to go. So this is sort of a serviceable addressable market for the executive search industry in North America, which is the majority of our business between the US and Canada. So this is really what we focus on a lot. That market, if you look at the top 50 search firms, they've got North American revenues of about 4.7 billion and the top 20 of those top 50 are 4.1 billion of that. So pretty concentrated. And when you get below 50, you're really talking sort of almost sole practitioners and not a lot of market concentration there. So if I plot out for everyone, this sort of bubble chart on how big each company is based on, again, that search model I showed you, which is the number of searches per partner times the average fee gives me my revenue per partner on the vertical access. And then going across as the scale or the number of partners, you can plot out where each of our firms are concentrating their business.

10:16So in the upper right hand quadrant, you've got the bulge tier. And I don't mind saying my competitor's names because you all know them, but that's Spencer, Hyderick, Russ Reynolds, Aegon's Ender, and Corn Ferry. We call them the Shrecks. And they make up about 2.6 billion of this 4.7 billion dollar market. And they're the giants in the industry. They have very, very experienced people. They do very high quality search work. They're good competitors. But there are limitations because of their size. So specifically, I referenced to you how that off-limits works. And I told you, callable does about 600 searches a year. Well, if you're Corn Ferry or one of these five firms doing 10 to 15,000 searches per year, it completely constricts and gums up your ability to access the market. So and that's where we're of a much smaller scale and can, along with these other firms, and deliver more candidates to the client. Also, if you're a partner at those search firms,

11:17it becomes quite restrictive and sharp elbows kick in because everybody starts to know everybody. And you can only have so many partners in your SaaS, your tech practice within your SaaS group before the market's saturated. So this is how I position against the bigger firms, whether I'm speaking to partners, we're trying to hire or whether I'm talking to a client. So it's that restriction on the marketplace and sort of the sharp elbows and the bureaucracy that comes by that. But again, I give them high marks, super qualified recruiters there and they're doing great search work. Then in the lower half of this group of people, I call it the pack. These are what we refer to as headhunters, which to call well, that's a four letter word, but these are transactional, not transformational firms. So there will be some very fantastic search practice learners within these boutiques, but as a general statement, their revenue per partner is lower because they're either doing fewer searches per partner because they don't really have market presence on the business development side,

12:18or they're doing work that's really sort of outside the C-suite so that average fee is lower. So because of that, they're doing lower volume, lower average fee. They recruiters, but they're not business partners or advisors, whereas at those larger firms, when you have a higher revenue per partner, you're doing 11, 12, 14, 16 searches per partner. You see a lot more about what's going on in the industry, what competitors are doing to you, and we can talk more knowledgeably about how to position yourself within that group of competitors you have. So what that leaves is what we have framed as our strategy, which is the elite quadrant, and there's essentially no one in this quadrant but us, and that's really where revenue taps up, revenue per partner taps up about $1.3, $1.4 million in above, where you're really doing a large number of search works at a high average fee inside the C-suite, and you don't have the limitations of those larger firms in terms of the candidate pool, the access for your clients,

13:20but you've got a lot of room to grow, and so we pull most of our partners have come from those big five firms, where they like what those firms were 20 years ago when they weren't quite so large. And so we present ourselves as having the caliber of those bigger firms above the pack, but without the restrictions of the bigger firms that the pack also doesn't have. And so all that comes together really to what we present, most importantly to the clients is often there's a perception that hiring one of the biggest firms is the safest thing to do for a client, that we position from a risk perspective, it's actually hiring Caldwell, where you're getting that expertise, but without those candidate blockages. So our goal is not to be the biggest, it's the best, and we're not just chasing scale, we are very methodically going up market relentlessly in terms of the caliber partner we're hiring, and you can see the path that we're trying to go to over the upcoming years without becoming that next big firm. And I would last note on the market comment that,

14:22I mentioned those big five firms have 2.6 billion, that's about 55% of the market, 55 divided by five, they each have about 11%, really none of them above 15% because there is this sort of absolute constriction, and that's the pressure they face when you've seen their strategies, which have started to diversify into other business lines because you can only get so big in executive search. So that's our strategy, is the focus on the elite quadrant, keep bringing in high caliber partners and drive fuel our growth that way. We've lined up our purpose this way as well, which we position against our competitors at Caldwell, our purpose is your mission. So for every new search that we take on, we pull that client's mission statement and we distribute it to everyone in our firm with every new search announcements, so we know what we're working towards. And we're definitely not focused on single searches, we'd be happy to take a CFO search if you have one, but we're really about teaming with clients to build extraordinary leadership teams, and we take pride in the fact that we're changing the world

15:25through the work we do with our placements. And so the vision for our firm really is to be the largest, most reputable elite quadrant executive search firm. We do phrase out elite, but not elitist. We are not arrogant. We listen to our clients, and it's not just all about sort of later, and in executive search, the more tenured you are, as it takes years to build up your personal reputation, generally the higher your revenue production, but we also are focused on who are tomorrow's market makers. So pulling out the very season people from our competitors, as well as in promoting from within, and getting that sort of next-generation partner from our competitors as well, as they transitioned from a principle to a partner role. We're focused at the next stage of reflection in the sort of two to three hundred million dollar range, about 125 to 150 partners, compared to the 50 partners we have now. I'll talk in a little bit about the path and the speed that we think that we can get there,

16:26but that will take us some time, and at that point, we'll do another reflection point on how are we tracking, because at some point you will become one of the next ball's tears. And we are very focused right now on the driver of our growth, being primarily the executive search business. I mentioned this IQ talent, which I'll speak to a little bit still, but really, with 90% of our business as executive search, we're finding in this elite quadrant, being a pure play provider resonates with clients because we know what we're best at. A little bit of our history, if you look back to 2008, we are absolutely a cyclical firm to the hiring trends in markets and economies. So we had the financial crisis in 2009, we had the pandemic in 2020, coming out of the pandemic, the entire industry just literally took off and exploded with hiring demands, so we were operating at well above our average metrics in terms of search as a partner, not just called well, but our competitors too.

17:27And then that eased tremendously back down during fiscal 23 and 24, again, these are calendar years ending August. And we saw a very strong rebound this past year, where we saw a 22% growth. So taking the cycles into context, we've just taken a very methodical growth, fairly low risk approach to hiring and growing, and it's really proven out over the years to be a very stable model, despite the cycles that we absolutely will continue to have. And I like to point out to people that our first quarter of fiscal 26, which ended November 30th, 2025, was the largest in our history, 26.1 million in revenues. So as of now, we're tracking above $100 million for the current fiscal year, and historically and importantly, the back half of our fiscal year, meaning May through August, has traditionally been 20 to 25% higher than the first half. So there is for sure some seasonality

18:28because of our fiscal year and the holidays, US Thanksgiving, Canadian Thanksgiving, the Christmas holidays. And so that plays into the timing of our business to a notable extent. So we're feeling very good with where we're sitting now in that Q1 performance that we had. Going back on what we're doing to drive the business, already showed how the industry's business model worked. We're focused on driving the number of searches for partner in our average fee per search with multiple initiatives in the firm that the largest one being strategic accounts and trying to go, continue to go up market in terms of our client size. We have some beautiful Fortune 500 logos where we've done C-suite searches and we take great pride in those, but at our heart, most of our search work is for clients in the sort of the 200 million to two to four billion dollar revenue range. And so because of that, there's good work at those clients, but there's not as much recurring work.

19:29I talked about the smaller the client, the more episodic and executive searches, as well as facts or faxes, a chief executive officer or a CFO makes more dollars of compensation at a Fortune 500 company. And the industry's pricing model is based on basically one third of the placed executives first year compensation. So the higher revenue your client is, as a general statement, the larger search fee that you're getting from placing that candidate. So again, those big firms have the benefit of being more present in the Fortune 500 companies. And so as we continue to go up market, it sort of becomes a multiplier impact, right? There's more search work to have at those firms and it's a higher fee. And so our build up for that or other big initiative is just partner growth. Certainly retention is a big component, but hiring qualified elite caliber partners is where we're spending a lot of our time and internal efforts right now. And that continued build out also benefits

20:32the number of searches in the average fee because as you fill in open space on your search offerings, the Fortune 500 doesn't want to work with 27 different search firms. They'll work with more than one, but to the extent you can cover more of their search needs across both industries and functions, you become easier to use for more searches. And so that's how we're growing into building our firm. When you look at our metrics and where we've performed over the last decade, this is a 10 year history up to our trailing 12 months and in November 30th, our average fee has continued to rise over time. Again, as we've upped our game in terms of the level of search work we're doing and again, the caliber of partners that we've hired, the number of assignments per partner per year fluctuates tremendously on those economic cycles that I referenced. So this was the pandemic hitting in fiscal 20 and that big bounce back and then that ease back I mentioned. And now we have basically fully rebounded to our historical norm marks

21:32and we're looking ideally to crest over 12 searches per partner on a minimum in terms of what our goals are. And then the number of partners, we haven't been tremendously fast in growing that number but it's been consistent and methodical. And so you multiply those together for our average revenue per partner. And again, outside of that huge post pandemic surge, we've continued a methodical growth pattern there so that right now we're just under 2 million Canadian in terms of our average revenue per partner. I do wanna just highlight a few of my team members because it is a team effort and one of the, well not one of the biggest initiative we put in this place was the formation of a recruitment committee where we had been a bit more opportunistic in our partner hiring before. We've become extremely focused. So we have a team of six seasoned partners. These are all still market facing partners and practice leaders or office managing partners within the firm with 20 plus years of experience. We are now proactively doing our own outreach

22:35in a very more focused and strategic manner. We've solicited each of our practice leaders for where they would be stronger as a search practice if we could fill XYZ gaps. And what we've gotten back is a list of 50 areas, 50 partner requests from our practice leaders where we would be stronger today if we could just fill in these gaps. So basically looking to double that 50 to 100 before we even start thinking about are we starting to sort of run into each other or face these sort of size issues that I spoke about. In terms of where we're focused on the hiring and where we currently operate, we are a financial services weighted firm, almost 45% of our revenue is in financial services. And I further broke that out, which represents 40 million. So you could see, although that's an overweight from a percentage basis, we're very well diversified within that. Generally speaking, we do have gaps

23:36that we're still trying to fill out. Like I mentioned, real estate being one of those areas where we want to be much larger, but not one single area of financial services being at risk. Industrial between 25 to 30% of our business so our second largest practice. And then really fairly equal weight between 5 to 10% on the other practice areas, consumer tech, professional services, life sciences, not for profit. So when I talk about going from 50 partners to 150, this is why it's not a scary proposition for our partners and worrying about sharp elbows. It's really becoming more market facing to the clients and filling in gaps that we can't currently service right now. And then just as an investor note, I do always like there is a price to operating in this elite quadrant and we don't shy away from it. Our compensation plan is designed for this elite quadrant. So at the lower level of productions, think less than a million dollars per partner,

24:37we actually don't pay as much as most of the other firms out there. So somewhere between one to 1.5 million dollars per partner is where we are very competitive and above that 1.5 million dollars. We, there's always someone who will pay you more but we believe we have a market leading compensation plan. And this has allowed us to use it as both an attraction and a retention device. We have extremely low retention from people leaving who are over a million dollar producers. Under a million dollar producers, there is sort of a self counseling out that can happen in that if you're not building more than $500,000, you can definitely make more money elsewhere. So it becomes sort of a self managing group. And I also note that for new hires, it does take sort of 18 to 24 months to fully ramp up to your potential in that you generally are coming out of one of these other larger firms with some non solicitation restrictions

25:38as well as your clients have to get used to another brand. So this is what we're building it on and why if you compare us on a profitability perspective, our, or look at our sort of common size P&L, you'll see that our compensation expense is 8 to 10 percentage points higher than Hydroker corn and I list them as our only two public competitors although Hydro just exited the public market. But our profit is about 5 percentage points lower because of that we've got a very tightly managed GNA but we just can't hit those same margins that the larger firms can at this point in our scale. So just to wrap it that up maybe. So this partner growth is our number one internal initiative that is newly developed. We just launched that May of 2025. So it's only been about nine months and we have developed a very nice pipeline of partners to bring in new executive search bookings.

26:39We just released earnings a week ago or so and that has remained robust at the mid to lower end of the market where IQ talent operates. We haven't seen a same rebound and you hear people talking about the K economy which becomes almost numbing but it does seem to be true and that executive hiring has continued at Caldwell and our peer group but sort of that mid level hasn't seen the same strength that the executive level has. I didn't speak a lot about IQ talent again it's 10% of our business. We acquired that with a view that it would grow 25 to 30% organically per year. It radically exceeded that it's first two years here growing over a hundred percent per year became crashing down in that cycle I spoke about. And it's been nicely stable if that's a positive for the last sort of 24 months but we have not been successful in driving that revenue up until about the last three to six months.

27:40So our first quarter and our fourth quarter from last year were quite strong but we're still watching that growth because that is why we acquired it is to see that and we haven't been able to drive that growth in this market just yet and we are working on it. Everyone talks about AI I can leave some of that to the questions if there's questions around it Paul but I do like to just note that I feel executive search is professional services will be impacted by AI no question. Full stop but executive search is far better positioned I personally believe because of two factors really one is our very business model which again it's outcome oriented not time and labor oriented. So one challenge we have at IQ talent is we have been successful leveraging AI tools more and more making us more efficient but we build on an hourly basis so we're building our clients less. So the clients are the ones winning because of those efficiencies.

28:41So we're working on evolving that hourly business model right now but executive search and the whole industry is already built on this sort of percentage of place comp so that's less subject to disruption and not needing to change the entire business model. And the other thing that the other area that I believe helps insulate us is really this we are trusted advisors and talent brokers you know that the acting as the in between between the client and the candidate if Coca-Cola wants a new CDO it's awkward for them to call up the CEO of Pepsi it just doesn't work that way so it's that neutral talent broker to have in the mix that helps protect what the service is we offer. We're gonna continue to embrace this elite quadrant our partners internally like it the partners we're talking about hiring like it and I think it positions us uniquely based on that market map. We have parted with seven or so partners over the last six months as we fully embrace that model

29:43who weren't quite of the caliber that we needed not culturally they were great people but just you know revenue per partner does need to be here to fit the model and we are focused on profitable growth our margins have not been as high as we liked especially during that down cycle they are ticking up now on a trend and so we are very focused on not just growth for growth sake but on profit and certainly we are focused on capital allocation as much as we are growing at a hyper speed so we did implement a dividend I should know but I don't know the exact number of quarters Paul about about a year ago and we top that up coming into this fiscal year so right now we've got a one cent per share per quarter dividend which is about a 4% yield at our current share price we are very focused on trying to keep that dividend growing as we continue to grow the firm but certainly not losing sight of I've said our single most important initiative being the partner hiring and each partner hire

30:45can be like a miniature acquisition and that there can be a leave behind them out coming from one of these bigger firms right we all have tail end of the year weighted programs and so pulling some away you always have some amount of retention we are not writing acquisition level multiple checks but it's just a commercial reality that you need to do something to sort of if not make whole at least acknowledge that a lot of these partners are leaving significant financial incentives at their prior firm and we did we do look at small boutique acquisitions all the time and we've done a few of them still very much interested in looking at those as part of our plan and when I say small maybe like two to five partners larger acquisitions are extremely difficult to integrate in this industry the cultural fits are very nuanced and most large acquisitions in this space do not work out

31:45so that is not a primary focus of ours at a large scale perhaps one day a purchase and a geography we're not in where you wouldn't have the sort of the disruption but not looking for a large acquisition but we also did implement a normal course issue or bid about a year ago and we have been as active as we basically can with that but you know we're a micro cap and you know what that comes with it is those these normal course issuer bids are limited to what your average daily trading volume is and ours is honestly not very high so the amount we can buy back per day is only like two to four thousand shares and we've been quote aggressive in trying to do that but even with that aggression we have not been able to buy much more than a hundred thousand shares back over the last year that we do anticipate keeping that active as well as considering possible block purchases where they to come to our attention so that's sort of what I wanted to go over Paul

32:46I'm kind of long-winded so you can give me the hook anytime but I'll stop sharing my screen I listen Chris I think that was perfect, perfect timing yeah for those that are use of this you guys if you have questions please just a chat function and I'll ask Chris the questions we do have some questions at all I'll sort of wait until I get mine answered first look at a Q3 or sorry Q1 that you just reported it was a solid quarter good growth maybe let's break it down a little bit more what what happened in that order to be able to drive that kind of revenue growth here yeah you know it is you know it can get sometimes tiring to hear companies say this but we had a good top line and really our our compensation base is extremely variable Paul so you know our partner compensation makes up about 52% of our PNL just to the partners and so over you know about 75%

33:50relative the entire tire comp so most of that's very variable but we still do have 25% of our business that's fixed costs so when you you know see this revenue growth with existing partners that's where we can see you know a lot of drop coming from that that compensation plan I showed you that you know we pay higher at the high end it's a a a blessing in the down cycles because it really does act as a big shock absorber but in the up cycles it also sort of you know gives gives more back to the the employees in terms of their compensation but so in Q1 we had the benefit of the very fair favorable revenue performance for Caldwell I forget the exact percent Paul someone up but we were up over 40% I believe you're over year in terms of our first quarter on the executive search piece of the business and then IQ talent as I mentioned it hasn't done what I wanted to but we had a very successful quarter at IQ talent and it dropped several hundred thousand dollars of operating profit as well as on a very

34:52what I would call a very respectable revenue performance for that business so we really saw both business units operating quite strongly and the big sort of flags we put in there in terms of negatives or draw downs or higher expense items where you know we do have a notable component of compensation that's based on tied to share price not with the partners but on the corporate team and so as the share price goes up it can if it goes up quickly that can have an outsized impact on a single quarter and we did see our share price increase you know close to 50% I think it was over that quarter so that had sort of a pull down meaning increased GNA expense as well as we flagged that there were and I believe that was you know three three hundred plus thousand dollars and then we did flagged that we had some startup costs for that Dubai office in terms of legally setting it up getting in place benefit plans compensation plans

35:52recruiting costs to bring some of these employers on some of those non-recurring and we flagged those as about three hundred thousand dollars and then some you know I do anticipate we'll still have a bit of a draw just from an operating perspective where again we brought the one partner in we fired the staff underneath and I mentioned I don't think it will take this person 18 months to come up to speed but it will take them some time as their restrictions run their course and Chris do you look at are you planning on new geographies to do some similar yeah right now so we always are contemplating something perhaps in like Singapore you know that's been on our talking track for a few years now so it's not we're not aggressively looking at that Paul but being strategically opportunistic sort of in that area but most of our growth we really are focused on I showed you where we're underweighted on those practices

36:52relative to our practice waiting and there's and it's in these these needs from our practices the needs are more driven by I need this area in my practice I'll use industrial as the example I'd love a chemicals person to bolster our chemicals team more so than I need an industrial person in Germany per se you know in terms of what's in terms of magnitude what's most important to our practice leaders are still filling out industry or functional gaps not the geography gaps Gotcha so the factors that sort of gave you a strong q1 do you see those sort of trends or those factors still in place now is it is it kind of lumpy a quarter by quarter basis or do the trends sort of supersede a quarter yeah um so we the industry can move pretty quickly quarter to quarter actually you know hiring demand and and you know

37:54think when stock markets move quickly like down that's not good for for my business when the VIX uncertainty goes up real real fast that's not good so the whole industry can move actually relatively quickly a quarter to quarter I have the benefit we just released earnings like a week or so ago like I said so the comments you know I made then or tried doing that in the press release really were yeah like through through mid-February that earnings release date bookings had remained very nice relative you know to I would say certainly the prior year but also just nicely favorable to sort of just the industry the industry is in a good spot right now it seems that hiring demand keeps going call well is is even more susceptible to volatility quarter to quarter I will say because we just have fewer partners still and you know at even at 50 sometimes we have a better quarter than another just because this collective group of people 50 people

38:56each had a good quarter or you know so so as we grow I think we'll smooth out we had a much percentage wise none of our peer none of our public reporting peers were up nearly what we worked for over quarter but I acknowledge a year ago we were down more than they were so a little bit of that but as of right now hiring demand has maintained a good pace and I I do always like to reference back you know a good good quarter bad quarter we try to manage more year to year than quarter to quarter just because of that back half waiting so you you almost oh not always but almost always we'll see lower KPI metrics revenue per partner etc in those first two quarters September through February then you do may through August okay interesting um you know you you mentioned uh what you mentioned you pay a dividend um share by back um I mean doesn't seem like you have a lack of capital but is there is there a potential circumstance where you would go to

39:57market to raise money like an a larger acquisition or or some other uh event yeah so so it's it's a great question and one of the ones that I struggle with a lot Paul and that owner who asked that um the challenge is um there are gaps I want to fill in and I mentioned absolutely look at these sort of these these boutique acquisitions um my ROI I mentioned there there can be a sign on with partners but it's not a multiple of revenue or a multiple of their their incremental EBITDA you know so it's less than that so my my biggest ROI in my opinion is organic partner hiring and gaining scale that way in terms of the aspect of accessing the public markets um I haven't actively tried in the last six months uh and I haven't actively tried really anytime recently but but just given our size and our you know

40:59and our and where our share price is we don't have we are public but we don't have you know ready access really you know to raise substantial capital just because of the value of our share price and and we myself the boards you know feeling is that um if we are successful in implementing on our business plan over the next you know 12 to 24 months uh I like to think we will see some continued share price movement and so issuing shares right now isn't the most attractive we believe just based on what our valuation is being uh given by the market um um uh fully understand um what what's the insider position like how much uh how much this company is owned by technically insiders right now would you say roughly yeah so technical and i i don't know the right word actual a setty insiders like

42:01you know defined insiders uh is about 20 percent so the board and management own about 20 percent of the firm uh of the other 80 percent i don't have full visibility obviously because a lot of it's you know obos uh so it's held in brokerages and i don't know but i i do have visibility in a some and i do know shareholders who used to need to report under setty who over the years have fallen off of that and aren't required but uh i believe that about 30 percent of the firm uh so 20 percent true you know insiders i think another 30 percent is held by a a pretty small group of people uh you know who just have held on to their stock for for many years and then that leaves sort of that other 50 close to 50 percent that would in theory be actively i don't know what any individuals goals are but you know more more open to

43:02trading sure sure gotcha okay perfect um okay listen let's let's jump on some of the questions that have come in here um let's see we'll start with Curtis uh Curtis says who's your biggest competition and how is the churn rate of the executives uh he says more churn equals more money for called well or last um what two parts so who would you define as your biggest competition you did mention a couple names earlier yeah so it's for sure the big five Spencer Hygurus Aegon corn for sure like we're you know uh that's who we see um and then there are a few of the uh boutiques who um by industry you know the boutiques you'll see maybe for a specific industry so there's one search firm who it has a a very strong and they're a very good search firm but they're primarily technology so yes we will see them in on the technology side but our our primary day-to-day

44:04competitors are those big five on that and the uh the other question uh was about executive churn i guess yeah yeah how does that work i'm curious as well like um you know it's not necessarily bad for you if if somebody's you know moving around a lot but uh also there must be some sort of conditions around how long uh a client has uh you know an executive before he you know i guess you you have to i don't know compensate again or whatever the the terms are yeah yeah i mean it's a um the best churn is when someone we placed for tires right missus so so that's the that's the perfect situation and we get called right back up uh the worst situation would be right we place someone and that person doesn't work out we do provide uh guarantees for search work for a period of time so we do stand behind that we'll re-perform the search that's another common industry it's not everybody but most people in the industry will

45:05stand behind that via a guarantee so really the churn you know sort of that churn uh if it's too short and they think that we're responsible for just not finding someone right then yeah that would be negative but generally speaking executive turnover that is a positive for us it's more search work for the whole industry um and also when you bring in a CEO especially a CEO uh or when um a private equity firm acquires a company and they bring in the usually they nice usually a lot of times they'll be a focus on the CFO role but between the CEO and the CFO like if you can get that search right then often that person will look to build a team in their own vision versus the one that's already there so uh you know the the way i think about churn is you know how can we follow the churn that comes out from the

46:07the the CEO or CFO around building out the platform and like that was that sort of the theme you know we're very focused on building teams happy to do just your you know chief marketing officer uh but but would really love the CEO role so we can help you know design your whole organization yeah no gotcha so you mentioned AI earlier um the question is how does AI impact the business but i'm gonna tweak it a little bit like how how do you utilize AI uh in your business if at all yeah um so AI is a squishy word so i'll define it a little bit right we've got it we've got a tech stack i'll call it which is our email system our search database system uh you know just just our nuts and bolts we operate on this but that's not AI so that but we do have a tech stack uh and then we've got a tremendous number of

47:10database tools tools databases uh you know pitch book cap by q linked then board acts you know all of these tools uh that we leverage to do uh candidate research come up with you know candidates on top of that tech stack where we've got you know seven hundred thousand candidates in our own proprietary search database but we always supplement that um so the AI part of it and that's just big data i would say right that's doing a query on a big database uh the AI part of it it that's been evolving it we're involved with in a couple ways so there's two firms uh one is hello sky that we acquired about a four and a half percent interest in uh four years ago or so and it is an AI platform uh four talent acquisition and meaning it it's connecting dots uh like uh i need an executive who has proven scale by

48:13growing from a series b to a series d within x number of year like you know all of this it's it's it's putting that all together and then it's it's ranking recruitability scores well you know start AI starting to show if you've been if you've been somewhere three months you're you know you're not going to get pulled out of there probably if you've been there 20 years you may not get pulled out of there either but we're noticing back to the question on churn when does churn most likely happen so you can kind of get this AI ranking on on some of that so we own a four and a half percent and we do utilize that tool uh we also uh have an equity stake over 20 percent we spun out our software business from iQ uh which is now called hoot recruit and it's more of a uh lower level but you've put in a job spec and it'll instantly almost instantly give you back a um a candidate list and that's done through marrying a large language model uh with a fundamental

49:14search database on doing that so we're we're invested in these two areas not heavily by the way one was the five hundred thousand dollar investment the other was just the spin out of this business but some direct investment there and then um we are always reviewing new tools we're part of a consortium of search firms there's eight of us who meet once a month our tech teams do to sort of compare notes on what tools are we seeing out there uh what's working what isn't uh those big five are not part of that but but you know it's it's a collaborative approach to AI because it's just too big of a topic to have be entirely on but specific examples of what we are using outside of those two investments we have um we we are using a business development tool and i'll share it because i'm impressed by it if you're in professional services it's called REN REN and it you know really our partners load up all of their uh sort of tier one network base and it gives them daily updates on any any news or article findings and you can use you know

50:16that for outreach uh you know and conversations starting we've seen a tremendous result from that um and then we are in the process of um we're a chat GPT shop again i don't mind sharing that's the that's the model we've leaned into uh and uh we have married that to our internal search database with the six to seven hundred thousand candidates which is also all of our BD contacts it's our CRM uh and that all sits inside of our wall so it's an enterprise or isn't a chat right and and we're we're still in the process of building out what's called the middle layer uh so we've dumped all of our search database into a data lake we're building out this middle layer which uh is is the training part so what we're using it for are um you know i'm i'm going to meet with Paul uh tomorrow uh and uh i want to know who else in the firm has connection points with him and it'll

51:16instantly give you that from everything that's in our database or you know uh here's oh and i'm sorry it's part of that also we're also using a um a tool called quill that recently rebranded i forget the name just last month they rebranded but it it takes the transcription from your my candidate we do our interview it takes the transcription uh and we have search criteria and executive search you know here's the six to eight criteria that are most important in assessing an executive and we do very structured interviews so we're always assessing against the same criteria that could be P&L leadership it could be scaling it could be um growth and development whatever is important to your business we'll interview virtually to that and and the AI then we'll take that conversation and map it into all of those search criteria for a very rough i mean it absolutely needs to be curated but a rough draft of the candidate

52:19right up and that saves several hours of time for each interview that we do two to three hours of time save per interview for let's show the partner but you know the consultants and the associates doing that first first kind of interview um so we're starting to see real efficiencies the potential for them they haven't boiled up such that my KPIs have fallen yet on number of searches per uh raised i should say number of searches per consultant or associate but that's where we're looking sort of right now is how can we drive so far average um consultant or associate can handle eight searches at once how can we make that ten or twelve and that's where again if you can claw back two to three hours per interview that's a lot of time in my business so that's that's kind of different flavors for how we're seeing AI and i always do caveat what we're working on internally i'm open about it but that may or may not turn into something great you know that's kind of playing around uh with this uh stuff like everybody else yeah

53:19yeah no doubt uh perfect um okay one Pablo asks uh given the off-limits reality in c-suite search you mentioned uh where do you see the next leg of growth coming from once you've reached that point yeah so uh great question um hey i think we're a long way away from that you know i i put up those practice slides for that reason and at fifty partners like the next reflection point and where we need to have an answer for that is that sort of the hundred twenty five to hundred fifty partners two to three hundred million because i still have another couple hundred million to go but we got to be thinking about that before before we're there obviously so so right now we have got a tremendous amount of growth before we hit that that said and i get this question i'll just weave it in proactively but you know who who might be an acquirer of colwell right or what how where does this strategically go and and you know one of those big firms big five firms would not be a good acquirer for us and quite

54:20frankly any search firm with notable North American operations likely would not make a great acquirer image of these cultures are so hard to mesh our complex are different you know it's who owns what account coming into all that and so very very difficult when i think of complimentary services it's it's do you get this overused word of any synergy out of it and otherwise it's kind of why do it a bit but at IQ talent i can say that almost half of the revenue has come through referrals from colwell so i've proven out that there is a real business tie to these companies being together that said i have not seen really any executive search work come up from IQ talent because the relationship isn't with you know the CEO or generally the CHRO it's it's the manager director senior manager of talent acquisition for for that kind of work so it's not pushing executive

55:21search work up so and i apologize i'm along with it but so the question is what i think of services and what fits it's what out there could like help drive work into executive search also and not just this one way street because with the one way street there's a very strong trust level with my executive search partners with my IQ talent team but that took years to get coming with right and these my businesses what it is which is the partners are are sort of like hey i'm nervous about anything that might disrupt my relationship with my client or go badly right so you have to build the trust but there are offerings out there um you know sort of turn around firms uh that that are out there that have started to dip their toes into executive search so restructuring consulting type of thing those are consulting firms uh some of the insurance firms or diversified human capital firms have started to dip their toe into uh you know

56:24executive search so i do think that there are some evolving opportunities where service lines that that aren't the same same ones traditionally you know when i look at what my competitors are doing which are are things like coaching um you know coaching is just as hard to skills executive search so i'd rather focus on scaling executive search right now meaning coaching is the same high comp plan uh you know uh type of thing so uh it's it's more these other areas that are evolving that might be interesting and and i am still on a wait and see we're not bleeding edge people uh but you know there has been a fairly notable push by some of the larger firms especially in the interim executive space um but i just don't think we're big enough yet to necessarily be able to leverage the flow between so again when you're when you if i can double the size of my executive search business then all of

57:26these complimentary product offerings become even more attractive because there's more there's more flow yeah yeah yeah understood um okay uh Chris is what challenges and barriers do you see to meeting your growth targets um clearly partner recruitment i mean in the short run i'll say an economic cycle can hit us but it's gonna hit everybody so that's that's kind of just table stakes to the conversation it's really the the impediment would be uh the success of this partner recruitment and i explain how we have changed that over the last nine months and i you know it takes uh uh just like an executive church you you build a pipeline a lot of the partner hiring in this industry is similar to like law firms uh or investment banking where it's usually unless someone's angry somewhere it's usually not oh okay uh i'll join you tomorrow right it's a nurture it's a nurture and bill that you start the outreach uh and then you develop the relationship so uh again i am i am pleased

58:28with where my recruitment team is it has taken this and and how the pipeline continues to to grow and build and evolve and the the number of people we're talking to and as we've gotten bigger you know again rewind the clock eight years scale helps like too much scale hurts i've said that but some scale helps because you you are more known in the marketplace and and we are getting feedback now that yet we've peaked people's interest so so the whether you phrase it the positive way on what's the biggest push for us would be we we become viewed as sort of the uh destination hiring place for partners to join from other firms if we're not successful that would become kind of the the biggest impediment i think and and you know i think that there really is an interest for another prominent firm and we're known but we're not big five known uh you know if you if you look back in history there was a firm called

59:29CT partners a firm that i respected quite frankly and and they uh hit hit a few bumps and they actually went went bankrupt uh so again too much growth too fast on control is bad um but i think they they had a neat marketplace that if i had access to all their historical data i think it would have lined up into this elite quadrant uh that we're focused on um gotcha um how many partners are you targeting to add in the year going forward yeah if it is right now i think said give or take um what what's the cadence what would you expect to be able to hire an annual yeah so um i've been here 12 years not in this role for 12 years but we've averaged about 1.3 net partner hires per year so people do retire occasionally they leave not a lot but um and so we're really trying to drive that notably higher when i got the team together uh

1:00:31and i do know i will have one or two people retiring you know within the next nine to 12 months but so i got the team together we're really looking for for sort of like a net five build this year as just sort of a baseline and that was really i can't say overly strategic Paul or whoever asked the question but really it was like well that that would be 10% partner growth surely we can try to do something like that you know like that i would say if we could get a net 10 i would love it i also phrase at the current time a number like net 20 i don't think we'll see number one but that would be hard to absorb i keep mentioning culture that's almost like doing you know 20 different acquisitions and absorbing 20 different cultures along with this partner recruitment committee and i won't bore everyone with every initiative we're working on but we did put together a far more robust onboarding process through a whole separate committee because it's how can we get these partners i mentioned that 18 to 24 ramp time how can we

1:01:32shrink that how can we get people to collaborate more through trusting more because they're going on bd calls more together so really putting that framework in uh right now and over the next sort of six months so that we can accommodate a stronger growth growth rate of new partners behind that so i won't say it was overly ambitious we set certain with just with the recruitment team that's not necessarily a public like this was my guidance for but you know that that metric uh and then but i would love to do better but i i don't see as doing like net 20 better if that frames a drop yeah no perfect um okay Chris asks uh would you consider a mending conversation slash bonus plan so line them to profitability and ROI metrics instead of share price so our compensation plan really is pretty unique to us and and and that again is is we're in this quadrant um

1:02:34it's it's a sacred instrument in the firm right now so it would be you know my talent is incredibly portable those relationships are very portable uh so shifting the compensation plan structure much uh carries great risk uh with it and specifically what is magical about it when we go to market for partners and the people are here is those big five your compensation does angle directionally with your personal performance your revenue but it doesn't line up to it directly so here it's a grid system if you build this you make x if you build you if you build 500 you get this percentage if you build a million you get this if you build a million five you get this higher percentage back to dollar one so whether the year is good or bad it brings the partners great

1:03:37comfort that if I have a great year even in down cycle I'm still gonna get paid fairly based on my personal contribution and I really don't want to hear I know I'm talking to shareholders I know that but the partners I'm saying don't want to hear well oh we just we weren't profitable well I was just because everyone else wasn't I'm gonna be really pissed if you don't pay me my money right frankly so so that's the thesis that's been in there also within that is we're very well-known in Canada we're known in the US after 15 years of growth we're really not known in Dubai or or the UK to any extent now it takes time to build your brand and it comes with search by search by search so as we become bigger I do think that there is opportunity where the brand is carrying more weight so it's it's not a hundred percent of conversation on most of my partners we define as brands within the brands they could lead tomorrow and take

1:04:38most of their vocal relationships with them or they could open up their sole practitioner shop you know and be successful they could go back to corn fairy and be successful so but as the brand becomes stronger there's more benefit from being here and I think that a lot lends itself to potentially compensating different and I don't know that I would take that to changing anything with like current partners but as we think about the evolution of the firm and if we're going to bring on you know think of it in tranches the next tranche of 25 the next tranche of 25 the next tranche of 25 perhaps phasing in something over time around that. Chris do you think being a public company helps or hurts you in this industry? You know it's it's fascinating so I think we've adapted to it I don't think it's a the the the negatives on it are financially it is expensive to be public given my size like I you know I you know

1:05:43hard costs it's over half a million dollars hard and soft costs it's a million dollars per year in terms of being public and that's that's far better than if we were listed on the NASDAQ or in the US so I'm not complaining per se but that that is a real cost that the firm bears and the shareholders bear for that so the negative is that the negative is gosh what I like to have like a bad quarter and not have to talk about it yes you know so there's there's that and when I not just talk about it but competitors use that for you or against you you know you call well they have that quarter you know so it's so it runs that way but the benefits are culturally one of the the main tenets is transparency here the compliance transparent everyone's on the same compliment everybody knows how they're going to get paid if they do what they say and and financially having our numbers out there uh is good because it's we can communicate all this openly within the firm there's nothing

1:06:43to hide from um in pitching work against our competitors and just you know uh talking to clients look we've got a real true governance structure here we're public we've been around for a bit we're go go look at our stock you know so so there are definite pros to it and I do think people you know there is a um a certain pride right ticker CWL and we release earnings and you know behind that whereas in a private company it's like I wonder what management is hiding from me that I don't know uh so it's it's really uh my predecessor used a word that I rarely try to use to emulate him but I'm ambivalent you know I mean I I would certainly uh uh yeah enjoy not having some the downsides of public what what I will say again in terms of we've been public since 1989 if we're going to be public another 30 years then my share price is clearly going to be need need to be higher and I'm going to need to be able to access those markets that I said I'm having difficulties with given our curtain size and share price

1:07:45or then it for sure doesn't work uh yeah so yeah gotcha well I mean question related to that a little bit uh Russell asked you have an end game is there uh I mean look out 10 years from now what does this business look like yeah and I'm just gonna be uh I went a little long which I'm fine I just want to uh okay thanks um sorry um so the end game so how to set an end game and I honestly and I'm not I'm gonna give an answer but not completely generic like that there is no um things are changing so fast right now right I think for any company to say this is the end game unless that end game is I so I don't have an end game that oh we're gonna grow this we're gonna grow this x percent in three years and then I'm gonna sell it to a PE firm or do something else like that so there's not a a hard-coded end game like that

1:08:46right now the focus is and again willing buyer willing seller the market dictates what we're worth I can't argue that but I still believe that we're very undervalued relative to the the structure we've put in place what I believe we can execute on we need to be successful in doing that but so the the the I keep reframing it as what's the next reflection point and that would be that two to three hundred million dollar search firm before we come up with okay this is the end of that phase of what we were going to try to do and the board with with the board I'm always analyzing strategy along with my leadership team and the partners but it's it's it's I think this this elite quadrant strategy should carry us there like I said it's a problem potentially if it carries us monolithically to be the next Shrack uh balls bracket because of the the constraints there and we would need to have a an answer on it well how are you going to keep

1:09:47driving value outside of executive search then so so I I don't have an end game other than I do have this the this reflection point you know are we making enough progress in a rapid and a time frame to justify continuing along that organically as a public company or if not then yes the conversation is what will unlock more value for you as shareholders on this call besides that and so my end game also is not just to be business as usual as it has been you know for the last you know 10 years mm-hmm gotcha um at Chris uh if you give some advice to investors what what sort of catalyst or what potential events do you think we should pay the most attention to uh to really understand the proper said business so uh again the I went over the business model right number of searchers per partner average fee number of partners the the the biggest flux point there is the number of partners so you you

1:10:48should manage that metric we put all of those KPIs in um in our quarterly MDNA so we we we stand behind them we talk to them each quarter uh I would focus the I would focus on all of those not quarter to quarter but on us for the 12-month period just it quarters are so spiky uh but those metrics are we are we increasing those metrics each year uh cycles aside we we know cycles will happen is is a shareholder they will I don't know when but another down cycle will come um but are we making progress especially around the number of partners because that's our biggest controllable the average fee the way that gets up is you know we we set minimum fees we've got uh guidelines where people the partner can make pricing decisions within the guideline and then that they have to come to the practice leader or myself but we can't make the market on the pricing right the the way the average fee goes up is the level of search work that

1:11:49we're doing i.e. the more executive the placements the more they're going to make and again the bigger the company generally is going to pay more so we make more bigger companies so uh again those metrics should be watched but those are uh not overnight metrics whereas if you hire a partner your partner kept one up by one overnight uh so right perfect good well listen we've come to the end i know we've taken up a lot of your time but um as we end this is there a key message you want to make sure everybody walks away with today uh you know just look i i i i am super i'm not proud for myself and really i know your shareholders what's what's my you know earnings potential but i i am very proud of what uh my entire employee team is doing with you know this purpose i think we're very aligned with our clients and the partners and my practice leaders uh and this elite quadrant and what

1:12:49we're building that i think is tangibly different in a in an industry where it is hard to differentiate yourself uh quite frankly it's because to a lot of clients searches the searches search will do it for the least amount but differentiating ourselves and i'm very optimistic with what we have as a platform and a strategy to deliver on and and the team to deliver on that strategy uh within that and uh i just look forward to uh you know spending most of my time on on implementing that fantastic uh we've been speaking with CEO Chris Beck of Caldwell Partners uh CWL on the TSX venture uh sorry on the TSX exchange um Chris great to have you here um thanks for the time you've given us today and i look forward to the next time we can catch up appreciate it thanks Paul thanks everyone you got it bye for now