Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases. Taking a l ...

Executive Search and Client Loyalty - Approximately 80% of executive searches in fiscal 2024 were for board level, chief executive, and other senior executive positions, with over 3,700 search engagement clients[66] - More than 85% of assignments in fiscal 2024 were for repeat clients from the previous three fiscal years, indicating strong client loyalty[66] - Over 75% of revenues were generated from clients utilizing multiple lines of the company's business[66] Financial Performance and Revenue - Fee revenue for fiscal 2024 was $2.76 billion, a slight decrease from $2.84 billion in fiscal 2023[72] - Net income attributable to Korn Ferry for fiscal 2024 was $169.2 million, down from $209.5 million in fiscal 2023[72] - Adjusted EBITDA for fiscal 2024 was $408.2 million, with an Adjusted EBITDA margin of 14.8%, excluding $68.6 million in restructuring charges and other costs[72] - Fee revenue decreased by $72.7 million (3%) to $2,762.7 million in fiscal 2024 compared to $2,835.4 million in fiscal 2023, primarily due to decreased demand for permanent placement talent acquisition offerings[74] - Consulting fee revenue increased by $18.0 million (3%) to $695.0 million in fiscal 2024, driven by higher demand for organizational strategy and assessment & succession solutions[74] - Digital fee revenue increased by $12.0 million (3%) to $366.7 million in fiscal 2024, driven by higher demand for organizational strategy, leadership development, and total rewards sales[74] - Executive Search North America fee revenue decreased by $55.2 million (10%) to $506.9 million in fiscal 2024, with an 11% decrease in engagements billed[74] - Executive Search EMEA fee revenue decreased by $2.5 million (1%) to $184.5 million in fiscal 2024, with a 7% decrease in engagements billed[74] - Executive Search Asia Pacific fee revenue decreased by $9.7 million (10%) to $85.9 million in fiscal 2024, with a 15% decrease in engagements billed[74] - Adjusted EBITDA decreased by $49.1 million (11%) to $408.2 million in fiscal 2024 compared to $457.3 million in fiscal 2023, driven by lower fee revenue and higher cost of services, partially offset by reduced compensation and benefits expenses and increased other income from marketable securities[79] - Consulting Adjusted EBITDA increased by $5.8 million (5%) to $114.3 million in fiscal 2024, driven by higher fee revenue, partially offset by increased compensation and benefits expenses and cost of services[79] - Digital Adjusted EBITDA increased by $11.2 million (11%) to $108.7 million in fiscal 2024, driven by higher fee revenue and lower compensation and benefits expenses, partially offset by increased cost of services[79] - The company's fee revenue for 2024 was $2,762,671 thousand, a decrease from $2,835,408 thousand in 2023 and an increase from $2,626,718 thousand in 2022[183] - Total revenue for 2024 was $2,795,505 thousand, compared to $2,863,836 thousand in 2023 and $2,643,455 thousand in 2022[183] - Net income attributable to Korn Ferry for 2024 was $169,154 thousand, down from $209,529 thousand in 2023 and $326,360 thousand in 2022[183] - Earnings per common share (diluted) for 2024 was $3.23, compared to $3.95 in 2023 and $5.98 in 2022[183] - Net income for 2024 decreased to $172.56 million from $213.05 million in 2023 and $330.85 million in 2022[185] - Comprehensive income attributable to Korn Ferry for 2024 was $154.25 million, down from $208.95 million in 2023 and $285.99 million in 2022[185] Workforce and Restructuring - The company initiated a workforce reduction plan affecting approximately 8% of employees, resulting in $68.6 million in restructuring charges for fiscal 2024[68] - The company recorded restructuring charges of $68.6 million in fiscal 2024 to eliminate excess capacity due to macroeconomic challenges[78] Expenses and Cost Management - Compensation and benefits expense decreased by $57.0 million (3%) to $1,844.2 million in fiscal 2024, driven by an 8% decrease in average headcount[75] - General and administrative expenses decreased by $9.5 million (4%) to $259.0 million in fiscal 2024, primarily due to lower impairment and integration costs[76] - Cost of services expense increased by $61.5 million (26%) to $300.0 million in fiscal 2024, driven by higher interim services from acquired companies[77] Income and Taxes - Other income, net increased to $30.7 million in fiscal 2024 from $5.3 million in fiscal 2023, primarily due to greater gains from the increase in the fair value of marketable securities[80] - The provision for income tax decreased to $50.1 million in fiscal 2024 from $82.7 million in fiscal 2023, reflecting a lower effective tax rate of 22.5% compared to 28.0%, partly due to a $9.7 million non-recurring tax benefit[81] - Cash used to pay income taxes decreased to $72.12 million in 2024 from $134.74 million in 2023[188] Cash Flow and Liquidity - Cash and cash equivalents increased to $1,195.4 million as of April 30, 2024, compared to $1,067.9 million in 2023, with $393.8 million held in foreign locations[109] - Marketable securities totaled $254.4 million as of April 30, 2024, including $219.9 million in equity securities, with $202.5 million classified as non-current[109] - Cash provided by operating activities decreased to $284.0 million in fiscal 2024 from $343.9 million in fiscal 2023, primarily due to lower cash inflows[109] - Cash used in investing activities decreased to $53.8 million in fiscal 2024 from $323.5 million in fiscal 2023, mainly due to no acquisitions in 2024 compared to $254.8 million spent in 2023[109] - Net cash provided by operating activities in 2024 was $283.96 million, down from $343.89 million in 2023 and $501.66 million in 2022[188] - Cash and cash equivalents at the end of 2024 increased to $941.01 million from $844.02 million in 2023[188] Debt and Financing - The company completed a private placement of $400.0 million Notes in December 2019, with a $4.5 million discount, maturing December 15, 2027, and used $276.9 million to repay prior revolving credit facility[108] - The company amended its Credit Agreement in June 2022, extending the maturity date to June 24, 2027, and established a $1,150.0 million senior secured credit facility, including a $650.0 million revolving credit facility and a $500.0 million delayed draw term loan facility[108] - No amounts were outstanding under the Credit Facilities as of April 30, 2024[117] - Interest rates for loans under the Amended Credit Agreement fluctuate between Term SOFR plus 1.125% to 2.00% per annum[117] - Quarterly commitment fees on the unused Revolver range from 0.175% to 0.300% per annum based on the consolidated net leverage ratio[117] Shareholder Returns and Stock Repurchases - The company increased its quarterly dividend from $0.10 per share in 2014 to $0.37 per share in June 2024, reflecting a 270% increase over the period[108] - The company repurchased $52.5 million and $93.9 million of its stock during fiscal 2024 and 2023, respectively, with $182.7 million remaining available for repurchases as of April 30, 2024[108][109] - Dividends paid to shareholders in 2024 increased to $54.39 million from $32.97 million in 2023 and $26.79 million in 2022[187] - Repurchases of common stock decreased to $53.16 million in 2024 from $95.46 million in 2023[188] Foreign Currency and Risk Management - Foreign currency losses recorded in fiscal 2024, 2023, and 2022 were $4.5 million, $2.0 million, and $1.2 million, respectively[116] - A 10% fluctuation in foreign exchange rates could result in a foreign exchange gain or loss of $11.9 million based on exposed balances as of April 30, 2024[116] - The company utilizes foreign currency forward contracts to mitigate foreign exchange risks, not for trading or hedging purposes[116] - The company's exposure to foreign currency exchange rates involves 13 major currencies, including the U.S. Dollar, Euro, and Japanese Yen[116] - The company's foreign subsidiaries' operations are measured in local currencies, with assets and liabilities translated into U.S. dollars at reporting period-end rates[116] - The company's foreign currency risk management program primarily focuses on offsetting risks associated with currency exposures[116] - Foreign currency forward contracts are used to offset risks from foreign currency exposures, with fair value changes recorded in the consolidated statements of income[144] Accounting and Financial Controls - The company's disclosure controls and procedures were effective as of April 30, 2024, with no material changes in internal control over financial reporting during the fourth fiscal quarter[93] - The company's internal control over financial reporting was effective as of April 30, 2024, with no material weaknesses identified[137] - The company adopted new accounting standards in fiscal 2023 and 2024, with no material impact on consolidated financial statements[113][114][115] - The company's expected credit loss allowance for accounts receivable is based on historical collection experience, current and future economic conditions, and customer account status[163] - Revenue recognition for consulting services is based on total hours incurred as a percentage of total estimated hours at completion[173] - Digital fee revenue is recognized as services are delivered and the company has a legally enforceable right to payment[173] - Executive and professional search fee revenue is generally one-third of the estimated first-year cash compensation of the placed candidate[173] - RPO fee revenue is recognized over the period that the related recruiting services are performed, with both fixed and variable fees[173] Balance Sheet and Equity - Total stockholders' equity as of April 30, 2024, was $1.74 billion, compared to $1.65 billion in 2023 and $1.55 billion in 2022[187] - Retained earnings as of April 30, 2024, were $1.43 billion, up from $1.31 billion in 2023 and $1.13 billion in 2022[187] - Accumulated other comprehensive loss as of April 30, 2024, was $107.67 million, compared to $92.76 million in 2023 and $92.19 million in 2022[187] - Noncontrolling interest as of April 30, 2024, was $4.27 million, down from $4.93 million in 2023 and $5.24 million in 2022[187] - Total assets grew to $3.68 billion in 2024, up from $3.57 billion in 2023[195] - Total liabilities increased slightly to $1.94 billion in 2024 compared to $1.92 billion in 2023[195] - Stockholders' equity rose to $1.74 billion in 2024 from $1.65 billion in 2023[195] - Retained earnings increased to $1.43 billion in 2024 from $1.31 billion in 2023[195] Marketable Securities and Investments - The company's marketable securities are recorded at fair value and classified as either equity securities or available-for-sale debt securities[165] - No credit loss was recognized for the company's available-for-sale debt securities during fiscal 2024, 2023, and 2022[165] - The company held assets measured at fair value, including cash equivalents, accounts receivable, marketable securities, and foreign currency forward contracts, with fair values based on quoted market prices or third-party valuations[143] - Cash equivalents as of April 30, 2024, included money market funds and commercial paper with initial maturities of less than 90 days[164] COLI Contracts and Death Benefits - Total death benefits payable, net of loans under COLI contracts, were $447.3 million as of April 30, 2024, compared to $444.1 million as of April 30, 2023[86] - The net cash value of COLI policies was $219.0 million as of April 30, 2024, compared to $198.0 million as of April 30, 2023[86] - Total outstanding borrowings against the CSV of COLI contracts were $77.0 million as of April 30, 2024, compared to $77.1 million as of April 30, 2023[86] - Borrowings against the CSV of COLI contracts were $77.0 million and $77.1 million as of April 30, 2024, and 2023, respectively[117] Stock-Based Compensation and Equity Transactions - Stock-based compensation for 2024 was $39.08 million, up from $35.43 million in 2023 and $28.36 million in 2022[187] - Purchase of stock in 2024 amounted to $63.22 million, compared to $116.14 million in 2023 and $117.30 million in 2022[187] - Issuance of stock in 2024 was $9.27 million, slightly higher than $8.45 million in 2023 and $7.69 million in 2022[187] Contractual Obligations - The company has contractual obligations totaling $745.7 million, including $400.0 million in long-term debt and $233.5 million in operating lease commitments[111]

Core Viewpoint - Korn Ferry has experienced significant stock growth of over 35% in the past year, prompting an analysis of its potential for further upside [1] Financial Performance - Total revenue for the three months ended April 30, 2024, was $699.923 million, down 5.2% compared to the prior year quarter [6] - The Consulting segment showed growth of 3.9%, with revenue reaching $182.177 million for the same period [2][6] - The Executive Search segment experienced a decline in revenue, with a decrease of 6.5% to $198.703 million [2][6] - Adjusted diluted earnings per share increased to $1.26 from $1.01 in the prior year quarter, but decreased from $4.94 to $4.28 on a year-end basis [2] Segment Analysis - The Consulting segment is currently the second-highest in fee revenue and has shown consistent growth across all quarters in 2024 [20][22] - The Executive Search segment has faced challenges, attributed to a decline in engagements due to adverse economic conditions, with revenues down 7.9% year-over-year [2][23] - The Professional Search & Interim segment saw a significant decline of 14.9% in the most recent quarter [2] Market Position and Outlook - Korn Ferry was ranked by Forbes as the top executive recruiting firm in the U.S. for seven out of the last eight years, indicating strong market positioning [23] - The company’s quick ratio improved from 1.49 to 1.63, suggesting sufficient liquidity to meet current liabilities [10][22] - The forward P/E ratio for Korn Ferry is similar to its peers, indicating that the stock is fairly valued [11][24] Future Growth Prospects - The growth in the Consulting segment is encouraging, but a rebound in the Executive Search segment is necessary for overall revenue growth [23][25] - Current labor market conditions, including low job openings and reduced hiring activity, are impacting demand for Executive Search services [23]

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments. Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, ...

Group 1 - Korn/Ferry (KFY) is currently outperforming the Business Services sector with a year-to-date return of 11.4%, compared to the sector's average return of 5.8% [4] - Korn/Ferry holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, with the consensus estimate for full-year earnings having increased by 3% over the past quarter [3] - The Staffing Firms industry, to which Korn/Ferry belongs, has seen a decline of approximately 15.9% year-to-date, highlighting KFY's relative strength within this group [5] Group 2 - The Business Services sector ranks 4 in the Zacks Sector Rank, which includes 16 different groups ranked by the average Zacks Rank of individual companies [2] - Outbrain Inc. (OB), another stock in the Business Services sector, has a year-to-date return of 5.9% and also holds a Zacks Rank of 2 (Buy) [4][5] - The Technology Services industry, which includes Outbrain Inc., has performed well with an increase of 18.8% since the beginning of the year [6]

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers. Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by th ...

Core Viewpoint - Korn/Ferry has demonstrated strong financial performance with consistent earnings surprises and positive growth expectations for the upcoming fiscal years [1][5]. Financial Performance - Korn/Ferry reported an EPS of $1.26 in its last earnings report, exceeding the consensus estimate of $1.13, and beat the revenue estimate by 0.77% [1]. - For the current fiscal year, Korn/Ferry is expected to achieve earnings of $4.86 per share on revenues of $2.75 billion, reflecting a 13.55% increase in EPS and a slight decrease of -0.41% in revenues [5]. - The next fiscal year projections indicate earnings of $5.41 per share on $3.02 billion in revenues, representing year-over-year changes of 11.52% and 9.91%, respectively [5]. Stock Performance - Korn/Ferry shares have increased by 12.4% since the beginning of the year, outperforming the Zacks Business Services sector's 5.2% gain and the Zacks Staffing Firms industry's decline of -15.6% [3]. - The stock recently reached a 52-week high of $70.78 [3]. Valuation Metrics - Currently, Korn/Ferry trades at 13.7X current fiscal year EPS estimates, below the peer industry average of 16.8X [9]. - On a trailing cash flow basis, the stock trades at 11.6X compared to its peer group's average of 7X, indicating it is not among the top value stocks [9]. Investment Ratings - Korn/Ferry holds a Zacks Rank of 2 (Buy) due to rising earnings estimates, and it has a Value Score of A, with Growth and Momentum Scores of D and A, respectively, resulting in a VGM Score of A [2][7][11].

Review Investment action KFY reported 4Q24 earnings yesterday, with FY24 total revenue coming in at $2.79 billion (pretty much in line with my FY24 estimates) and net income of $224 million (beat my estimate by $7 million). Although I welcome this beat, I have become less confident in the growth outlook for KFY as the macro conditions are not showing the signs of recovery that I was expecting. The bullish investors are probably celebrating the fact that KFY is seeing stabilizing labor market trends (as per ...

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of over $112 million in Q4, with a margin of 16.3%, up nearly 300 basis points year-over-year [116][121] - Adjusted fully diluted earnings per share were $1.26, reflecting a 25% increase year-over-year [10] - The company returned $107 million to shareholders through dividends and share repurchases in fiscal 2024 [8][24] Business Line Data and Key Metrics Changes - Consulting fee revenue grew 4% year-over-year to $182 million, reaching an all-time high for the segment [124] - Digital fee revenue was flat year-over-year at $91 million, with digital subscription and license fee revenue up 3% [45] - Talent acquisition solutions, including executive search and interim, saw a combined fee revenue decline of 10% year-over-year [120] Market Data and Key Metrics Changes - Executive search revenue was $199 million in Q4, down 7% year-over-year [11] - The permanent placement portion of Professional Search was down 10% year-over-year but up 7% sequentially [9] - Recruitment Process Outsourcing (RPO) new business totaled $128 million, with $67 million from new logos [48] Company Strategy and Development Direction - The company aims to enhance cross-line business referrals, which accounted for 25% of total fee revenue in FY '24 [20][17] - There is a focus on integrated solutions and larger multi-year deals, moving away from point solutions [57][84] - The company is committed to leveraging its data insights and enhancing its digital capabilities to drive growth [30][31] Management's Comments on Operating Environment and Future Outlook - Management noted stabilization in the talent acquisition market, with expectations for continued improvement in RPO [35][52] - The company anticipates fee revenue in Q1 FY '25 to range from $655 million to $675 million, with adjusted EBITDA margins between 15.8% and 16.2% [28] - Management expressed confidence in the long-term growth potential driven by demographic trends and the need for talent solutions [91][100] Other Important Information - The company repurchased approximately $23 million worth of stock in Q4, bringing total repurchases for FY '24 to about 930,000 shares [21] - The average hourly bill rate for consulting increased by 12% year-over-year to $437 [117] - The company is focused on maintaining profitability while making strategic investments for long-term growth [32][96] Q&A Session Summary Question: What trends are seen in cyclically sensitive businesses? - Management noted stabilization in RPO and improvement in professional recruiting, with profitability up 300 basis points [35][36] Question: How sustainable are the current margins? - Margins are expected to remain sustainable depending on the economic environment, with guidance for Q1 at 16% EBITDA margin [72][73] Question: What is the outlook for Executive Search? - Management indicated that while Executive Search is facing challenges, there is potential for growth if economic conditions improve [102][103]

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. View all Key Company Metrics for Korn/Ferry here>>> Korn/Ferry (KFY) reported $690.8 million in revenue for the quarter ended April 2024, representing a yearover-year decline of 5.5%. EPS of $1.26 for the same period compares to $1.01 a year ago. Here is how Korn/Ferry per ...