Korn Ferry(US:KFY)2025-03-11 10:50Financial Performance - Q3 FY'25 fee revenue was $668.7 million, flat year over year, with a 2% increase on a constant currency basis[4] - Net income attributable to Korn Ferry was $58.4 million, with a margin of 8.7%, a decrease of 10bps compared to the previous year[8] - Adjusted EBITDA for Q3 FY'25 was $114.5 million, with an adjusted EBITDA margin of 17.1%, an increase of 190bps year over year[4] - Korn Ferry reported total revenue of $676.5 million for the three months ended January 31, 2025, a slight decrease of 0.05% compared to $676.9 million for the same period in 2024[43] - The company's net income attributable to Korn Ferry for the three months ended January 31, 2025, was $58.4 million, compared to $59.1 million in the same period last year, reflecting a decrease of 1.2%[43] - Adjusted EBITDA for the nine months ended January 31, 2025, increased to $342.725 million, compared to $295.904 million for the same period in 2024, reflecting a growth of 15.8%[49] - Consolidated net income for the three months ended January 31, 2025, was $58,414, representing a margin of 8.7%, compared to $59,071 and a margin of 8.8% for the same period in 2024[57] - Korn Ferry's net income attributable for the nine months ended January 31, 2025, was $181,818, with a margin of 9.0%, compared to $103,965 and a margin of 5.0% in 2024[57] Segment Performance - Fee revenue in the Consulting segment decreased by 5% year over year to $158.7 million, primarily due to a decline in organizational strategy and total rewards offerings[12] - Digital segment fee revenue was $90.8 million, essentially flat year over year, with a 3% increase at constant currency[16] - Executive Search segment fee revenue increased to $204.6 million, up 2.7% from the previous year[19] - In the Professional Search & Interim segment, fee revenue was $130.0 million in Q3 FY'25, essentially flat compared to $130.9 million in Q3 FY'24[23] - RPO fee revenue increased to $84.7 million in Q3 FY'25, a 4% increase from $81.2 million in Q3 FY'24, attributed to new client wins and increased demand[27] - Consulting revenue for the three months ended January 31, 2025, was $158,704, with an EBITDA margin of 17.7%, compared to $161,382 and a margin of 16.7% in 2024[57] - Digital revenue for the nine months ended January 31, 2025, was $271,896, with an EBITDA margin of 31.0%, compared to $275,395 and a margin of 29.3% in 2024[57] - North America executive search revenue for the three months ended January 31, 2025, was $128,264, with a margin of 29.0%, compared to $129,889 and a margin of 24.2% in 2024[57] - Total executive search revenue for the nine months ended January 31, 2025, was $619,205, with an EBITDA margin of 24.5%, compared to $607,540 and a margin of 20.7% in 2024[57] - Professional search and interim revenue for the three months ended January 31, 2025, was $129,957, with a margin of 21.0%, compared to $130,854 and a margin of 18.2% in 2024[57] - RPO revenue for the nine months ended January 31, 2025, was $260,789, with an EBITDA margin of 14.6%, compared to $264,653 and a margin of 10.8% in 2024[57] Shareholder Returns and Capital Management - The company repurchased 237,000 shares for $17.9 million during the quarter[4] - Cash and cash equivalents decreased to $779.3 million as of January 31, 2025, down from $941.0 million at April 30, 2024[47] - Total assets as of January 31, 2025, were $3.650 billion, a slight decrease from $3.679 billion at April 30, 2024[47] - Korn Ferry's weighted-average diluted shares outstanding increased to 52.4 million for the three months ended January 31, 2025, compared to 51.3 million in the same period last year[43] Future Outlook - The company anticipates opportunities arising from a labor supply/demand imbalance, requiring organizations to reimagine their workforce strategies[3] - For Q4 FY'25, consolidated fee revenue is expected to be in the range of $680 million to $700 million[34] - Q4 FY'25 adjusted diluted earnings per share is projected to be between $1.22 and $1.30[31] - The company anticipates continued growth driven by disciplined cost management and increased consultant productivity[21] - The acquisition of Trilogy, effective November 1, 2024, is expected to positively impact future fee revenue despite current industry-wide demand slowdowns[24] Adjusted Metrics - Adjusted diluted earnings per share for Q3 FY'25 were $1.19, compared to $1.07 in the previous year[5] - The adjusted net income attributable to Korn Ferry for the three months ended January 31, 2025, was $63.263 million, up from $55.776 million in the same period of 2024, representing a 13.4% increase[49] - The adjusted diluted earnings per share for the nine months ended January 31, 2025, were $3.57, compared to $3.03 for the same period in 2024, indicating a 17.8% increase[52] - Total fee revenue for the nine months ended January 31, 2025, was $2,018,040, with an adjusted EBITDA margin of 17.0%, compared to $2,071,871 and a margin of 14.3% for the same period in 2024[57] Restructuring and Charges - The company reported a restructuring charge of $1.3 million for the three months ended January 31, 2025, compared to $4.6 million in the same period last year[43] - Integration/acquisition costs for the three months ended January 31, 2025, were $2.127 million, down from $3.899 million in the same period of 2024[49] - Restructuring charges for the three months ended January 31, 2025, were $1.316 million, significantly lower than $4.612 million in the same period of 2024[49] - The company incurred $2.452 million in impairment of right-of-use assets during the three months ended January 31, 2025, compared to no impairment in the same period of 2024[49] Non-GAAP Measures - Adjusted EBITDA for Q3 FY'25 was $51.2 million, up from $43.4 million in the same quarter last year, with an Adjusted EBITDA margin increase of 320bps to 25.0%[21] - Adjusted EBITDA for the quarter was not explicitly stated, but management emphasized the importance of non-GAAP measures for evaluating ongoing operations[40]