Core Insights - Korn/Ferry (KFY) is expected to report quarterly earnings of $1.13 per share, reflecting a year-over-year increase of 5.6% [1] - Revenue is anticipated to be $648.47 million, which represents a 3% decline from the same quarter last year [1] - There have been no revisions in the consensus EPS estimate over the last 30 days, indicating stability in analysts' forecasts [1] Revenue Estimates - The consensus estimate for 'Fee Revenue - Total executive search' is projected to be $197.74 million, indicating a year-over-year decrease of 0.8% [4] - The overall 'Fee revenue' is expected to reach $648.52 million, reflecting a 3% decline year-over-year [4] - 'Fee Revenue - Digital' is estimated at $88.61 million, showing a year-over-year change of -1.9% [4] - 'Fee Revenue - Consulting' is projected to be $151.80 million, indicating a significant year-over-year decrease of 9.1% [5] Stock Performance - Korn/Ferry shares have decreased by 6.8% over the past month, compared to a 4.1% decline in the Zacks S&P 500 composite [6] - The company holds a Zacks Rank of 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [6]

Group 1 - Korn Ferry (NYSE: KFY) is currently operating in a different environment compared to the end of the hiring frenzy during COVID-19 [2] - The Value Lab offers members a portfolio with real-time updates, 24/7 chat support, global market news reports, feedback on stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions [2] - The Valkyrie Trading Society consists of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns [3]

Financial Performance - Total revenue for the three months ended October 31, 2024, was $681,960, a decrease of 4.5% from $712,447 in the same period of 2023[7] - Fee revenue for the six months ended October 31, 2024, was $1,349,311, down 3.8% from $1,403,192 in the prior year[7] - Operating income for the three months ended October 31, 2024, increased significantly to $87,476 compared to $22,816 in the same period of 2023[7] - Net income attributable to Korn Ferry for the three months ended October 31, 2024, was $60,800, a recovery from a loss of $1,711 in the same period of 2023[7] - Basic earnings per share for the three months ended October 31, 2024, was $1.16, compared to a loss of $0.04 in the same period of 2023[7] - Net income for the six months ended October 31, 2024, was $126,599 thousand, compared to $47,229 thousand for the same period in 2023, representing a significant increase[14] - Comprehensive income attributable to Korn Ferry for the three months ended October 31, 2024, was $65,159, compared to a loss of $27,113 in the same period of 2023[10] - Adjusted EBITDA for the three months ended October 31, 2024, was $117,027, an increase of 18.7% from $98,542 for the same period in 2023[64] - Adjusted EBITDA for Q2 FY'25 was $117.0 million, with an Adjusted EBITDA margin of 17.4%, a 340bps increase compared to the year-ago quarter[82] Assets and Liabilities - Total current assets decreased to $1,482,447 as of October 31, 2024, from $1,674,160 as of April 30, 2024[5] - Total assets decreased to $3,526,653 as of October 31, 2024, from $3,678,869 as of April 30, 2024[5] - Total liabilities decreased to $1,743,788 as of October 31, 2024, from $1,941,544 as of April 30, 2024[5] - Cash and cash equivalents decreased to $694,850 as of October 31, 2024, from $941,005 as of April 30, 2024[5] - Total stockholders' equity as of October 31, 2024, was $1,782,865 thousand, up from $1,660,500 thousand as of October 31, 2023[12] - Cash and cash equivalents at the end of the period were $694,850 thousand, compared to $620,836 thousand at the end of the same period in 2023[14] Stock and Dividends - The company paid dividends of $39,262 thousand to shareholders during the six months ended October 31, 2024, an increase from $19,289 thousand in the same period of 2023[14] - A cash dividend of $0.37 per share was declared on December 4, 2024, with a payment date of January 15, 2025[73] - The quarterly dividend was increased by 83% to $0.33 per share as of December 5, 2023, following a 20% increase to $0.18 per share on June 26, 2023[136] Stock Repurchase - The company repurchased common stock totaling $56,153 thousand during the six months ended October 31, 2024, compared to $9,527 thousand in the same period of 2023[14] - The company repurchased approximately $32.6 million of its common stock under the share repurchase program during the second quarter of fiscal 2025[152] - A total of 461,141 shares were repurchased during the quarter ended October 31, 2024, at an average price of $71.44 per share[152] - The approximate dollar value of shares that may yet be purchased under the repurchase program is $149.7 million as of August 31, 2024[152] Operational Efficiency - The company reported integration/acquisition costs of $3,896 for the three months ended October 31, 2024, down from $5,030 for the same period in 2023[64] - The company reported restructuring charges of $0.576 million for the three months ended October 31, 2024, significantly lower than $63.53 million in the same period of 2023[91] - Total compensation and benefits expense decreased by $16.5 million, or 4%, to $437.4 million in the three months ended October 31, 2024, from $453.9 million in the year-ago quarter[97] - General and administrative expenses decreased by $1.2 million, or 2%, to $64.5 million in the three months ended October 31, 2024, compared to $65.7 million in the year-ago quarter[100] Revenue Breakdown - Korn Ferry's core solutions include Organizational Strategy, Assessment and Succession, Leadership and Professional Development, Total Rewards, and Talent Acquisition, addressing nearly every aspect of employer-employee engagement[16] - Revenue is primarily derived from talent and organizational consulting services, with consulting fee revenue recognized as services are rendered, measured by total hours incurred[19] - Digital fee revenue is generated from IP-based software products, recognized as services are delivered, with revenue from product subscriptions recognized over the contract term[21] - The company’s fee revenue from the Industrial sector was $208.0 million for the three months ended October 31, 2024, accounting for 30.9% of total fee revenue[58] - The digital segment contributed $92.89 million in fee revenue for the three months ended October 31, 2024, consistent with $97.09 million in the same period of 2023[88] Tax and Interest - The provision for income tax was $24.9 million for the three months ended October 31, 2024, with an effective tax rate of 28.5%, compared to $2.3 million and an effective tax rate of 98.2% for the same period in 2023[61] - Interest expense, net decreased to $5.6 million in the three months ended October 31, 2024, compared to $6.6 million in the year-ago quarter[110] Market and Economic Conditions - The company has evolved from a mono-line to a diversified business model, enhancing opportunities for consultants to engage with clients[16] - The company is focused on leveraging its integrated go-to-market strategy with over 340 marquee and regional accounts[79] - Korn Ferry's vision is to become the premier organizational consulting firm, capitalizing on the demand for upskilling and reskilling in a rapidly changing world[79] Miscellaneous - The company recognized no credit losses for available-for-sale debt securities during the three and six months ended October 31, 2024 and 2023[26] - Goodwill is tested for impairment annually, with the most recent test indicating no impairment as of February 1, 2024[30] - The company maintains cash and cash equivalents primarily in money market funds, with no losses experienced in such accounts[23] - The company has no off-balance sheet arrangements and no material changes in contractual obligations as of October 31, 2024[140]

Financial Data and Key Metrics Changes - The company reported consolidated fee revenue of approximately $674 million for Q2 FY 2025, which is down 4% year-over-year but flat sequentially [18] - Adjusted EBITDA margin improved for the sixth consecutive quarter to 17.4%, up 340 basis points year-over-year [14][23] - Adjusted fully diluted earnings per share increased to $1.21, up 25% year-over-year [23] Business Line Data and Key Metrics Changes - Consulting fee revenue decreased by 6% year-over-year and remained flat sequentially at $167 million [26] - Digital fee revenue was $93 million, down 4% year-over-year but up 5% sequentially, with digital subscription and license fee revenue growing by 7% year-over-year [25] - Executive search fee revenue grew by 1% year-over-year to $206 million, while interim fee revenue decreased by approximately 17% year-over-year [19][30] Market Data and Key Metrics Changes - The interim market demand remained challenging, with interim fee revenue down approximately 17% year-over-year [21] - New business growth for Executive search and digital was strong, up 4% and 11% year-over-year respectively [15][22] - Recruitment process outsourcing (RPO) saw $101 million in new business, including $41 million from renewals and extensions [23] Company Strategy and Development Direction - The company is focusing on diversifying its business and investing in proprietary data assets, including the launch of the Korn Ferry Talent Suite [9] - The acquisition of Trilogy International aims to expand interim professional offerings in EMEA and North America [10] - The company is committed to maintaining profitability while investing in consultant additions and capital investments for future growth [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining current profitability levels despite uncertainties in the operating environment [13] - The company anticipates fee revenue for Q3 FY 2025 to range from $635 million to $665 million, with adjusted EBITDA margin expected to remain between 16.5% and 17.3% [34] - Management noted that the current labor market is unusual, with expectations of continued challenges in the interim market [76][84] Other Important Information - The company repurchased $33 million of stock and paid a quarterly dividend of $0.37 per share during the second quarter [16] - The investable cash position at the end of Q2 was $537 million, up 16% year-over-year [24] Q&A Session Summary Question: Expectations for revenue trends by segment in Q3 - Management indicated a seasonal decline in Q3 revenue, estimating a potential impact of $30 million to $40 million due to fewer working days [40][41] Question: Confidence in the Trilogy acquisition and interim business opportunities - Management expressed optimism about the Trilogy acquisition, highlighting its potential to tap into the large interim market in EMEA [46] Question: Stability of demand and revenue guidance - Management acknowledged stable demand but noted the impact of fewer working days on revenue expectations [51][53] Question: Trends in the digital business and year-over-year decline - Management attributed the decline in digital revenue to a shift towards subscription agreements, with confidence in future growth [61][62] Question: Impact of larger contracts on consulting revenue - Management noted that larger contracts are leading to longer implementation times, affecting revenue trends [66][70] Question: Labor turnover and its impact on services - Management indicated that the current labor market dynamics are unusual, with optimism for future demand despite challenges [76][78] Question: Sources of margin improvement amid revenue declines - Management highlighted cost management, strategic decisions made over a year ago, and a focus on profitable work as key drivers of margin improvement [89][91]

FY'25 Q2 Earnings Call © 2024 Korn Ferry | DECEMBER 5, 2024 SAFE HARBOR STATEMENT FORWARD-LOOKING STATEMENTS Statements in this presentation that relate to goals, strategies, future plans and expectations are based on Korn Ferry's current expectations. You are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from those currently expected because of a number of risks and uncertainties. For a detailed description of many of those risks and uncert ...

Core Viewpoint - Korn/Ferry reported quarterly earnings of $1.21 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.97 per share a year ago [1]. Group 1: Earnings Performance - The company has surpassed consensus EPS estimates three times over the last four quarters [2]. - Korn/Ferry's revenues for the quarter ended October 2024 were $674.37 million, exceeding the Zacks Consensus Estimate by 0.50%, but down from $704 million year-over-year [2]. - The current consensus EPS estimate for the upcoming quarter is $1.16, with expected revenues of $670.5 million, and for the current fiscal year, the estimate is $4.84 on $2.72 billion in revenues [8]. Group 2: Stock Performance - Korn/Ferry shares have increased approximately 32.5% since the beginning of the year, outperforming the S&P 500's gain of 27.6% [4]. - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [7]. Group 3: Industry Outlook - The Staffing Firms industry is currently ranked in the bottom 47% of over 250 Zacks industries, suggesting potential challenges for stock performance [9]. - Resources Connection, another company in the same industry, is expected to report a break-even quarterly EPS, reflecting a year-over-year change of -100% [10].

Financial Performance - Q2 FY'25 fee revenue was $674.4 million, a year-over-year decrease of 4%[4] - Operating income increased to $87.5 million with an operating margin of 13.0%, up 980bps year-over-year[3] - Net income attributable to Korn Ferry was $60.8 million, compared to a net loss of $1.7 million in Q2 FY'24[6] - Adjusted EBITDA for Q2 FY'25 was $117.0 million, with an adjusted EBITDA margin of 17.4%, an increase of 340bps year-over-year[6] - Total revenue for the three months ended October 31, 2024, was $681.96 million, a decrease of 4.3% compared to $712.45 million for the same period in 2023[35] - Fee revenue for the six months ended October 31, 2024, was $1.35 billion, down 3.8% from $1.40 billion in the same period last year[37] - Adjusted net income attributable to Korn Ferry for the three months ended October 31, 2024, was $60.80 million, compared to a net loss of $1.71 million in the same period last year[35] - Basic earnings per share for the three months ended October 31, 2024, was $1.16, compared to a loss of $0.04 per share in the same period last year[35] - For the six months ended October 31, 2024, total revenue was $1.36 billion, a decrease of 2.7% from $1.42 billion in the same period of 2023[41] Segment Performance - Consulting fee revenue was $166.8 million in Q2 FY'25, a decrease of 6% year-over-year[8] - Fee revenue for Executive Search in Q2 FY'25 was $206.0 million, an increase of $3.0 million or 1% compared to the year-ago quarter[14] - Fee revenue for Professional Search & Interim in Q2 FY'25 was $121.1 million, a decrease of $17.3 million or 13% year-over-year[16] - Fee revenue for Recruitment Process Outsourcing (RPO) in Q2 FY'25 was $87.6 million, essentially flat compared to the year-ago quarter[19] - The Professional Search & Interim segment reported a fee revenue decline of 12.5% for the three months ended October 31, 2024, compared to the same period in 2023[37] - The company reported a fee revenue of $340.15 million for consulting in the six months ended October 31, 2024, down from $351.75 million in the same period of 2023[41] Adjusted Metrics - Adjusted EBITDA for Consulting was $29.1 million, with an adjusted EBITDA margin of 17.5%, up 120bps year-over-year[8] - Adjusted EBITDA for Q2 FY'25 was $29.2 million, with an adjusted EBITDA margin of 31.4%, an increase of 150bps year-over-year[11] - Adjusted EBITDA for Executive Search was $51.4 million in Q2 FY'25, with an adjusted EBITDA margin of 24.9%, up 530bps year-over-year[14] - Adjusted EBITDA for Professional Search & Interim was $27.2 million in Q2 FY'25, with an adjusted EBITDA margin of 22.5%, an increase of 400bps year-over-year[16] - Adjusted EBITDA for RPO was $12.9 million in Q2 FY'25, with an adjusted EBITDA margin of 14.7%, an increase of 460bps year-over-year[19] - Adjusted EBITDA for the six months ended October 31, 2024, was $228,236 thousand, up from $194,200 thousand in the prior year, reflecting a growth of approximately 17.5%[40] - Adjusted EBITDA for Q4 2024 was $117.03 million, representing an adjusted EBITDA margin of 17.4%, down from 14.0% in Q4 2023[41] - Adjusted EBITDA for the six months ended October 31, 2024, was $228.24 million, with an adjusted EBITDA margin of 16.9%[41] Shareholder Returns - The company repurchased 456,250 shares for $32.6 million during the quarter[3] - A quarterly dividend of $0.37 per share was declared, payable on January 15, 2025[3] Future Outlook - Q3 FY'25 fee revenue is expected to be in the range of $635 million to $665 million[21] - Q3 FY'25 diluted earnings per share is expected to range between $1.02 to $1.16[21] - The company expects continued challenges due to inflationary pressures and geopolitical uncertainties affecting future performance[28] Balance Sheet Highlights - Total current assets decreased to $1,482,447 thousand from $1,674,160 thousand, a decline of approximately 11.5%[39] - Total liabilities decreased to $1,743,788 thousand from $1,941,544 thousand, a reduction of about 10.2%[39] - Total stockholders' equity increased to $1,782,865 thousand from $1,737,325 thousand, reflecting a growth of approximately 2.6%[39] - Cash and cash equivalents decreased to $694,850 thousand from $941,005 thousand, a decline of approximately 26.2%[39] Restructuring and Expenses - The company incurred restructuring charges of $576,000 for the three months ended October 31, 2024, compared to $63.53 million in the same period last year[35] - Korn Ferry's total operating expenses for the three months ended October 31, 2024, were $594.48 million, down from $689.63 million in the same period last year[35]

Core Viewpoint - Korn/Ferry (KFY) is expected to report quarterly earnings of $1.21 per share, reflecting a 24.7% increase year-over-year, while revenues are forecasted to decline by 4.7% to $671 million [1] Group 1: Earnings and Revenue Estimates - The consensus EPS estimate for the quarter has remained unchanged over the past 30 days, indicating analysts' reassessment of their projections [1] - Analysts predict 'Fee Revenue- Total executive search' to reach $202.31 million, a decrease of 0.3% from the previous year [4] - The overall 'Fee revenue' is estimated at $671 million, showing a decline of 4.7% year-over-year [4] - 'Fee Revenue- Digital' is forecasted to be $91.19 million, down 6.1% from the year-ago quarter [4] - 'Fee Revenue- Consulting' is expected to reach $170.12 million, indicating a year-over-year change of -4.3% [5] Group 2: Market Performance - Korn/Ferry shares have increased by 10.9% over the past month, outperforming the Zacks S&P 500 composite, which rose by 3.5% [6] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near future [6]

Since my previous Hold rating on Korn Ferry (NYSE: KFY ), the global organizational consulting firm, its stock has gained 17.5%. However, I do consider the majority of these gains to be largely speculative and leadingOliver Rodzianko is an investment analyst specializing in the technology sector, grounded in timeless value principles. His expertise spans AI, semiconductors, software, and renewable energy, with a focus on companies that demonstrate resilient management and lasting competitive advantages. A t ...

Korn Ferry (KFY) FY 2024 Annual General Meeting September 25, 2024 11:00 AM ET Speaker0Good morning, and welcome to the twenty twenty four Annual Meeting of Stockholders. I'm Jerry Lehman, chair of the board of directors. It is 8AM, and I now call a meeting to order. I will act as chair of today's meeting, and Jonathan Quai, our general counsel and corporate secretary, will act as secretary. Also with us are members of our board of directors, our CEO and fellow board member, Gary Burnison Russ Hagee, a nomi ...