Korn Ferry(US:KFY)2024-06-13 18:21Financial 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]