Korn Ferry(US:KFY)2024-12-05 11:50Financial 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]