Korn Ferry(US:KFY)2020-07-02 22:10Financial Data and Key Metrics Changes - For the full year of fiscal '20, the company's fee revenue was $1.93 billion, essentially flat year-over-year [29] - Adjusted EBITDA for the full year was $301 million, with an adjusted EBITDA margin of 15.6% [29] - In Q4, fee revenue was $440.5 million, down 7.9% year-over-year at constant currency [30] - Adjusted EBITDA in Q4 was approximately $70 million, with a 15.8% adjusted EBITDA margin [30] - Adjusted fully diluted earnings per share in Q4 were $0.60 [30] Business Line Data and Key Metrics Changes - Executive Search fee revenue in Q4 was down 10% globally [30] - RPO and Professional Search fee revenue was down 9% year-over-year [30] - Consulting fee revenue decreased by 14% year-over-year [30] - Digital segment grew by 14% year-over-year, with Q4 fee revenue of $69 million [36] Market Data and Key Metrics Changes - In Q4, North America and EMEA Executive Search revenues were each down 10% year-over-year, while APAC was down 16% [40] - New business trends showed a decline of approximately 30% year-over-year in April, stabilizing to a 26% decline in June [22][43] Company Strategy and Development Direction - The company is focusing on reimagining its business model, moving from analog to digital delivery in its assessment and learning business [18] - Korn Ferry aims to maintain operational flexibility and has set a goal of at least neutral EBITDA during the COVID-19 crisis [23][34] - The company is committed to investing in recovery and has a strong balance sheet with $863 million in cash and marketable securities [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unprecedented impact of the pandemic on business operations and expressed optimism about future opportunities for growth [14][20] - The company is seeing signs of stabilization in new business, with June showing an 18% increase over May [22] - Management refrained from providing specific revenue and earnings guidance for Q1 FY '21 due to ongoing uncertainties [25] Other Important Information - The company has taken swift actions to reduce its cost base by approximately $300 million on a run rate basis [33] - Korn Ferry has seen an uptick in its diversity and inclusion consulting business amid the pandemic [51] Q&A Session Summary Question: Recent trends in the Consulting business - Management noted an uptick in diversity and inclusion services and indicated that June new business in Consulting was down about 29% [51][52] Question: Performance of recent acquisitions - Management stated that the integration of recent acquisitions has been successful, contributing positively to the business [62] Question: Breakdown of new business trends by geography and service line - Management provided insights that RPO new business was up 72% over the last four months, while Professional Search was down 36% [67] Question: Maintaining EBITDA neutrality - Management clarified that the goal is to maintain a minimum of EBITDA breakeven, with the timeline dependent on the resolution of the humanitarian crisis [81][86] Question: Impact of working from home on Consulting business - Management indicated that the shift to virtual delivery has significantly impacted the learning and development segments, which were previously reliant on in-person interactions [102][106]