Group 1 - Korn/Ferry reported revenue of $712.05 million for the quarter ended April 2025, a year-over-year increase of 3.1% [1] - The EPS for the same period was $1.32, compared to $1.26 a year ago, representing a surprise of +4.76% over the consensus estimate [1] - The reported revenue exceeded the Zacks Consensus Estimate of $688.94 million by +3.35% [1] Group 2 - Total Executive Search fee revenue was $227 million, surpassing the estimated $206.26 million, reflecting a year-over-year increase of +14.2% [4] - Overall fee revenue was $712.05 million, compared to the average estimate of $688.94 million, indicating a +3.1% change year over year [4] - Digital fee revenue was $91.63 million, slightly below the average estimate of $91.65 million, with a year-over-year change of +0.4% [4] - Consulting fee revenue was $169.36 million, exceeding the estimated $167.62 million, but showing a year-over-year decline of -7% [4] Group 3 - Korn/Ferry's shares have returned -3.3% over the past month, while the Zacks S&P 500 composite increased by +0.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Group 1: Earnings Performance - Korn/Ferry reported quarterly earnings of $1.32 per share, exceeding the Zacks Consensus Estimate of $1.26 per share, and showing an increase from $1.26 per share a year ago, representing an earnings surprise of 4.76% [1] - The company posted revenues of $712.05 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 3.35%, compared to year-ago revenues of $690.8 million [2] - Over the last four quarters, Korn/Ferry has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Korn/Ferry shares have declined about 1% since the beginning of the year, while the S&P 500 has gained 1.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $1.18 on revenues of $671.85 million, and for the current fiscal year, it is $4.65 on revenues of $2.71 billion [7] Group 3: Industry Context - The Staffing Firms industry, to which Korn/Ferry belongs, is currently ranked in the bottom 15% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - Resources Connection, another company in the same industry, is expected to report a significant decline in earnings, with a projected EPS of $0.03, reflecting a year-over-year change of -89.3% [9]

FY'25 Q4 Earnings Call Presentation JUNE 18, 2025 | © 2025 Korn Ferry Korn Ferry – A Global Organizational Consulting Firm The leading brand in Talent and Organizational Consulting ~ 9,200 colleagues strategically positioned in more than 50 countries Balanced capital allocation and excellent M&A track record Proven management team Proprietary and scaled IP and data: • Driving an expanding suite of digitized products • Enabling the delivery of scaled, integrated talent and organization solutions • "Brand Per ...

Financial Performance - Korn Ferry reported Q4 FY'25 fee revenue of $712.0 million, a 3% increase year-over-year, and full year fee revenue of $2,730.1 million, a 1% decrease compared to FY'24[3]. - Net income attributable to Korn Ferry for Q4 FY'25 was $64.2 million with a margin of 9.0%, while full year net income was $246.1 million, reflecting a margin increase of 290bps from FY'24[10]. - Adjusted EBITDA for Q4 FY'25 was $121.1 million, with a margin of 17.0%, up 70bps year-over-year; full year adjusted EBITDA was $463.9 million, also with a margin of 17.0%, an increase of 220bps[11]. - Total revenue for the year ended April 30, 2025, was $2.761086 billion, a decrease of 1.2% from $2.795505 billion in 2024[49]. - Consolidated net income for the three months ended April 30, 2025, was $64,244 million, representing a margin of 9.0%, compared to $65,189 million and a margin of 9.4% for the same period in 2024[61]. - For the year ended April 30, 2025, consolidated net income was $246,062 million, with a margin of 9.0%, compared to $169,154 million and 6.1% in 2024[61]. Segment Performance - Executive Search segment achieved Q4 FY'25 fee revenue of $227.0 million, a 14% increase year-over-year[3]. - Consulting fee revenue decreased to $169.4 million in Q4 FY'25, down 7% year-over-year, primarily due to a shift towards larger engagements[16]. - Digital segment fee revenue was $91.6 million in Q4 FY'25, essentially flat year-over-year, with an adjusted EBITDA margin increase to 31.1%[21]. - Fee revenue in the Professional Search & Interim segment for Q4 FY'25 was $130.7 million, a slight increase of 1% from $129.2 million in Q4 FY'24[27]. - RPO fee revenue for Q4 FY'25 was $93.3 million, representing a 4% increase from $89.5 million in Q4 FY'24[31]. - North America executive search revenue for the three months ended April 30, 2025, was $143,014 million, with a margin of 27.3%, compared to $125,468 million and 26.4% in 2024[61]. Capital Allocation and Investments - The company repurchased 232,000 shares for $15.0 million and paid dividends totaling $25 million during the quarter[3]. - Korn Ferry invested $44 million in an acquisition and $62 million in technology platforms and product enhancements during FY'25[3]. - The company maintained a balanced capital allocation approach, returning $89 million through share repurchases and $84 million through dividends in FY'25[3]. Future Outlook - The company expects Q1 FY'26 fee revenue to be in the range of $675 million to $695 million[38]. - Q1 FY'26 adjusted diluted earnings per share is projected to be between $1.18 and $1.26[35]. Consultant Metrics - The company reported a total of 560 consultants at the end of FY'25, an increase from 542 in FY'24[24]. - New engagements in the Executive Search segment totaled 1,738 in Q4 FY'25, compared to 1,586 in Q4 FY'24[24]. Adjusted Metrics - Adjusted net income attributable to Korn Ferry for the three months ended April 30, 2025, was $64.244 million, slightly down from $65.189 million in the same period last year[47]. - Adjusted EBITDA for the year ended April 30, 2025, increased to $463.866 million, compared to $408.204 million in 2024, reflecting a growth of 13.6%[53]. - The adjusted net income attributable to Korn Ferry for the three months ended April 30, 2025, was $70.109 million, up from $65.731 million in the same period of 2024, representing a 6.4% increase[56]. - Total adjusted EBITDA for the three months ended April 30, 2025, was $121,141 million, with a margin of 17.0%, up from $112,300 million and a margin of 16.3% in 2024[61].

Group 1 - Korn Ferry is set to release its fourth-quarter earnings results on June 18, with expected earnings of $1.26 per share, unchanged from the previous year [1] - The projected quarterly revenue for Korn Ferry is $689.89 million, slightly down from $690.80 million a year earlier [1] - In the third quarter, Korn Ferry reported flat revenue year over year at $676.5 million, exceeding the consensus estimate of $650.4 million [2] Group 2 - Korn Ferry's fee revenue for the third quarter was $668.7 million, also flat year over year [2] - The company's shares fell by 3.2%, closing at $66.59 [2] - Recent analyst ratings include a Neutral rating from UBS with a price target cut from $75 to $74, a Buy rating from Truist Securities with a price target cut from $84 to $80, and an Outperform rating from Baird with a price target increase from $72 to $79 [6]

Core Insights - Korn/Ferry (KFY) is expected to report quarterly earnings of $1.26 per share, indicating no change from the previous year [1] - Analysts forecast revenues of $688.94 million, representing a decrease of 0.3% year over year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, reflecting analysts' reassessment of projections [1] Revenue Projections - Analysts estimate 'Fee Revenue - Total Executive Search' at $206.26 million, indicating a year-over-year increase of 3.8% [4] - The combined estimate for 'Fee Revenue' is projected to be $688.94 million, suggesting a decrease of 0.3% year over year [4] - 'Fee Revenue - Digital' is expected to reach $91.65 million, reflecting a change of 0.4% from the prior-year quarter [4] - 'Fee Revenue - Consulting' is anticipated to be $167.62 million, indicating a year-over-year decline of 8% [5] Market Performance - Over the past month, Korn/Ferry shares have recorded a return of 0.8%, compared to the Zacks S&P 500 composite's return of 3.6% [5] - Korn/Ferry holds a Zacks Rank 5 (Strong Sell), suggesting it may underperform the overall market in the upcoming period [5]

Korn Ferry (KFY) FY Conference Summary Company Overview - **Company**: Korn Ferry - **Industry**: Staffing and Human Capital Services - **Event Date**: June 04, 2025 - **Key Speakers**: Bob Rozek (CFO), Tiffany Louders (VP of Investor Relations) Core Points and Arguments Business Transformation - Korn Ferry has evolved from primarily an executive search firm (80-85% of revenue) to a diversified organizational consulting firm, with executive search now representing only 29% of the business [5][8] - The company has developed capabilities in organizational strategy, talent acquisition, leadership development, and total rewards [7][8] Financial Performance - FY 2024 fee revenue was $2.76 billion, with a trailing 12-month revenue of $2.71 billion, reflecting a slight decline of 1% year-over-year [11] - Adjusted EBITDA increased by nearly $50 million, with a margin improvement of 200 basis points [11] - Digital business revenue, including subscriptions and licenses, grew by 200 basis points [11] Client Base and Market Position - Korn Ferry works with 97% of the S&P 500 and 75% of the best companies identified by Fortune magazine [12] - The addressable market for Korn Ferry's services is estimated at $450 billion, driven by demographic changes [17] Strategic Focus - The company emphasizes integrated client engagements, aiming to present itself as a unified entity rather than a collection of services [25][46] - Korn Ferry's growth strategy includes a balanced approach to capital allocation, focusing on reinvestment in the business, M&A, dividends, and share buybacks [36][39] M&A and Growth Strategy - M&A has contributed approximately 40% of Korn Ferry's growth, with significant acquisitions like PDI and Hay Group enhancing its capabilities [27] - The company aims to pursue transformational opportunities at the intersection of talent and strategy [27] Talent and Retention - Korn Ferry has a strong retention rate of over 99% for senior client personnel, highlighting its focus on talent management [29] - The company is developing a "talent suite" to integrate various solutions and improve client engagement [30] Margin Improvement - Korn Ferry has seen margin increases despite challenging market conditions, with a current margin of 17% and a target range of 16-18% [54][58] - Cost management strategies include reducing real estate expenses and proactively managing underperforming staff [56][58] Additional Important Insights - The executive search business has shown positive growth due to factors like workforce turnover and changing work preferences [50][53] - Korn Ferry's integrated approach aims to eliminate silos within the organization, enhancing collaboration and client service [46][48] - The company has a disciplined approach to M&A, focusing on strategic alignment, financial viability, and cultural fit [39][40] This summary encapsulates the key points discussed during the Korn Ferry FY Conference, highlighting the company's strategic direction, financial performance, and market positioning.

Korn Ferry (KFY) Conference Summary Company Overview - Korn Ferry is recognized as the largest executive search firm globally, evolving into a talent consulting organization [1] Key Insights Business Strategy - The company aims to break down silos between different business lines (executive search, consulting, digital) to present a unified Korn Ferry brand to clients [8][9] - The focus is on becoming a comprehensive talent partner for clients, addressing all aspects of their talent and business issues [9] Revenue and Client Management - The Marquee and Diamond program includes 350 top clients, contributing approximately 40% of consolidated revenue, up from 30% six years ago [10][11] - The program generates over $1 billion in fees from a total of $2.7 billion to $2.8 billion in fee revenue [11] - Leadership is taking personal responsibility for key accounts to enhance client relationships and drive growth [12][13] Financial Performance - Korn Ferry maintains an EBITDA margin range of 16% to 18%, currently at 17% [21] - In a mild recession, margins may drop to low double digits; in a severe recession, they could fall to mid-single digits but are expected to recover [21][60] Cost Management - The company has reduced real estate costs by 35% and moderated spending on business development [23] - Korn Ferry is actively weeding out low performers to optimize workforce efficiency [25] Capital Allocation - The company prioritizes reinvesting in the business, including hiring and technology investments, while also returning cash to shareholders through dividends and buybacks [28][29] - Current dividends are approximately $1.92 per share, yielding about 2.5% [30] M&A Strategy - Korn Ferry has focused on acquiring companies that align with its core competencies, particularly in finance, accounting, and IT [32][33] - The interim business is positioned to leverage executive search capabilities for cross-selling opportunities [37] Digital and AI Initiatives - The company is developing a single sign-on repository to streamline client access to various services and data [40][56] - AI initiatives are aimed at improving efficiency in consulting services and back-office operations [63][64] Market Outlook - The retirement of baby boomers is expected to create a slight uptick in executive search demand over the next three to five years [41] - The company anticipates a gradual recovery in the market as clients adapt to current economic conditions [74] Long-term Aspirations - Korn Ferry aims to be the leading name in human capital and talent strategy, akin to how McKinsey and BCG are viewed in business strategy [76] Additional Important Points - The company is focused on enhancing its digital capabilities and leveraging its intellectual property for consulting engagements [46][54] - Korn Ferry is committed to maintaining a strong balance sheet and generating free cash flow [28]

Core Insights - The article emphasizes the importance of the Zacks Rank in identifying strong stocks through earnings estimates and revisions, while also acknowledging the diverse strategies investors may adopt [1] - Value investing is highlighted as a favored strategy that seeks to identify undervalued companies based on traditional valuation metrics [2] - The Style Scores system is introduced, particularly the "Value" category, which helps investors find stocks with high value grades and strong Zacks Ranks [3] Company Analysis: KornFerry International (KFY) - KornFerry International currently holds a Zacks Rank of 2 (Buy) and an A for Value, indicating strong investment potential [4] - The stock is trading at a P/E ratio of 12.74, significantly lower than the industry average P/E of 15.62, suggesting it may be undervalued [4] - Over the past 12 months, KFY's Forward P/E has fluctuated between 11.84 and 15.53, with a median of 13.73, further supporting its valuation appeal [4] - KFY has a P/CF ratio of 10.96, which is favorable compared to the industry's average P/CF of 12.26, indicating strong operating cash flow [5] - The P/CF for KFY has ranged from 10.19 to 15.39 over the last year, with a median of 13.77, reinforcing its undervaluation status [5] - Overall, KFY's strong value metrics and positive earnings outlook position it as an attractive value stock at this time [6]

Financial Data and Key Metrics Changes - Fee revenue in Q3 was $669 million, a 2% year-over-year increase at constant currency [17] - Adjusted EBITDA increased 13% year-over-year to $114 million, with an adjusted EBITDA margin of 17.1%, up 190 basis points year-over-year [18] - Adjusted EPS increased 11% year-over-year to $1.19 [18] - Total company new business grew 13% year-over-year at constant currency, including $210 million of RPO new business, with 65% generated from new clients [18] Business Line Data and Key Metrics Changes - Consulting new business was $159 million, up 3% at constant currency, with larger engagements (over $500,000) representing 41% of new business [23] - Digital fee revenue was $91 million, up 3% at constant currency, with an adjusted EBITDA margin of 31.3%, up 100 basis points year-over-year [24] - Executive Search fee revenue grew 4% at constant currency to $205 million, with consultant productivity increasing 7% year-over-year [25] - RPO fee revenue grew 6% to $85 million, with an adjusted EBITDA margin of 15%, up 360 basis points year-over-year [26] Market Data and Key Metrics Changes - New business in EMEA showed particular strength, contributing to overall growth [19] - Fee revenue under contract accelerated to $752 million, with about 42% expected to be recognized in the next four quarters [27] Company Strategy and Development Direction - The company is focusing on larger addressable markets and aligning capabilities to drive sustainable, large-scale client engagements [11][12] - The diversification of services is evident, with marquee and diamond accounts representing 39% of total consolidated fee revenue [19] - The company is committed to becoming a leader in powering organizational performance for talent [14] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment for consulting services has been challenging, but the company's strategy is proving effective [9] - Management expects fee revenue in Q4 to range from $680 million to $700 million, with adjusted EBITDA margins around 16.8% to 17% [28] - There is a significant supply-demand imbalance in the labor market, presenting opportunities for the company [41] Other Important Information - The company is increasing its quarterly dividend by 30%, marking the sixth increase in the last five years [10][22] - The company has invested approximately $45 million in the Trilogy acquisition and repurchased over 1 million shares year-to-date [22] Q&A Session Summary Question: What areas have seen the most success in driving productivity? - Management noted that there is still room for productivity improvement, with rates per hour increasing significantly in both Consulting and Interim solutions [34][35] Question: What drove the growth in RPO new business? - The growth was attributed to a combination of new logos, marquee accounts, and sectors like healthcare and life sciences [40] Question: What caused the decline in digital new business? - The decline was due to tough comparisons from significant deals in the previous year, particularly in licensing the compensation database [46] Question: What are the expectations for hiring activity amid economic uncertainty? - Management does not expect hiring activity to pull back significantly, citing demographic trends and the need for companies to reskill their workforce [50][52] Question: Can you elaborate on recent large engagements? - The company is focusing on high-impact engagements that involve organizational design and leadership development, with a consulting backlog at an all-time high [62] Question: What would indicate a need for contingency planning? - Management indicated that a significant worsening of the cost of living crisis would be a key factor to monitor [87] Question: How should we think about margin expansion in '26? - The company targets margins of 16% to 18%, balancing earnings growth with investments in the business [107]