Korn Ferry · NYSE:KFY

Korn Ferry — Q2 FY2025 Earnings Presentation

25 slides from Korn Ferry's earnings presentation, Dec 5, 2024

  1. Slide 1: FY'25 Q2 Earnings Call

    FY’25 Q2 Earnings Call | © 2024 Korn 5, 2024 DECEMBER Ferry

  2. Slide 2: Safe Harbor Statement

    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 diff

  3. Slide 3: Advancing our Strategy to Become the Preeminent Global Organizational Consultancy

    Advancing our Strategy to Become the Preeminent Global Organizational Consultancy Diversifying offerings into fully Advancing Korn Ferry as a premier integrated, scalable and sustainable career destination: client engagements: Attracting and retaining top talent by investing in initiatives Intention

  4. Slide 4: A Compelling Investment Opportunity, At a Critical Moment, in a Critical Sector

    A Compelling Investment Opportunity, At a Critical Moment, in a Critical Sector Strong, Durable Relevant Solutions Aligned Poised for Foundation With Macro Trends Sustainable Growth • Recognized industry leader with • Rapid emergence of remote work and • Focus on durable, scalable ~ 9,500 experts st

  5. Slide 5: Earnings and Profitability Continued to Grow in FY'25 Q2

    EARNINGS AND PROFITABILITY CONTINUED TO GROW IN FY’25 Q2 OUR SIXTH CONSECUTIVE QUARTER OF PROFITABILITY IMPROVEMENT  Fee Revenue was Essentially Flat Quarter Sequential Across All LOB’s  For Talent Acquisition, Executive Search Grew 1% YoY, and Trends Improved for RPO and PS&I – Permanent Placemen

  6. Slide 6: Business Continues to be Highly Diversified

    Business Continues to be Highly Diversified Across Lines of Business, Geography and Industry For the second quarter of FY’25 Fee Revenue by Lines of Business Fee Revenue by Geography Fee Revenue by Industry 4% 6% 13% 18% 13% 14% 30% 19% 13% 56% 17% 27% 14% 25% 31% Executive Search Digital NAM APAC C

  7. Slide 7: Diversified Mix of Revenue & Earnings ($M)

    Diversified Mix of Revenue & Earnings ($M) (3) Consolidated Adj. EBITDA Up YoY and Sequentially Driven by Consultant and Execution Staff Productivity and Disciplined Cost Management FY’24 QTR. 2 FY’25 QTR. 1 FY’25 QTR. 2 $704 $132(3) $675 $143(3) $674 $150(3) 100% 100% 100% $97 $88 $93 90% $29 90% $

  8. Slide 8: Quarterly New Business - YoY Growth (Excluding RPO)

    Quarterly New Business* - YoY Growth (Excluding RPO) (7) New Business Growth Trends Are Improving Despite On-Going Uncertainties (1%) (1%) (2%) (2%) (3%) (3%) QTR. 4 FY'24 QTR. 1 FY'25 QTR. 2 FY'25 Constant Currency Actual F/X Rates * Confirmations plus upticks and additional placements | © 2024 Kor

  9. Slide 9: Quarterly New Business - YoY Growth By Line of Business

    Quarterly New Business* - YoY Growth By Line of Business (7) (Excluding RPO) Constant Currency Actual F/X Rates Consulting Digital 11% 10% 0% 7% (1%) 5% 4% (2%) 3% (3%) (3%) (4%) QTR. 4 FY'24 QTR. 1 FY'25 QTR. 2 FY'25 QTR. 4 FY'24 QTR. 1 FY'25 QTR. 2 FY'25 Executive Search* Professional Search & Int

  10. Slide 10: Consulting

    Consulting 25% of Fee Revenue and 19% of Adj. EBITDA in FY’25 QTR. 2 (1) Q2 Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) Consultant + Execution (6%) YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Staff Productivity (Flat Sequentially) Hours Worked 431K 395K 398K $178 17.5% Avg. Bill Rate 16.3% 17.5% $4

  11. Slide 11: Digital

    Digital 14% of Fee Revenue and 19% of Adj. EBITDA in FY’25 QTR. 2 (1) Q2 Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) Subscription & License Fee (4%) YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Revenue(4)($M) (+5% Sequentially) 31.4% 29.9% 30.2% Q2 New Business = $105M (+11% $97 $35 $93 $34 YoY) $88

  12. Slide 12: Executive Search

    Executive Search 30% of Fee Revenue and 34% of Adj. EBITDA(1) in FY’25 QTR. 2 Q2 Global Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) +1% YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Consultant Productivity 24.9% 23.7% (Essentially Flat Sequentially) $1.52 19.6% $51.4 $1.48 NAM (2%), EMEA +9%, APAC +1

  13. Slide 13: Professional Search & Interim

    Professional Search & Interim 18% of Fee Revenue and 18% of Adj. EBITDA(1) in FY’25 QTR. 2 Q2 Fee Revenue Adj. EBITDA ($M) & Consultant (13%) YoY Adj. EBITDA(1) Margin (%) Productivity Interim Fee Revenue ($M) (Non-GAAP) (Professional Search) Productivity (Flat Sequentially) 21.1% 22.5% Driven by In

  14. Slide 14: Recruitment Process Outsourcing

    Recruitment Process Outsourcing 13% of Fee Revenue and 9% of Adj. EBITDA(1) in FY’25 QTR. 2 Adj. EBITDA ($M) & Q2 Fee Revenue Adj. EBITDA(1) Margin (%) Fee Revenue Flat YoY New Business(7) ($M) Under Contract(6) ($M) Fee Revenue ($M) (Non-GAAP) (Essentially Flat 14.1% 14.7% Sequentially) $141 $681 R

  15. Slide 15: Maintaining a Balanced Approach to Capital Allocation

    Maintaining a Balanced Approach to Capital Allocation Deployed $129M of Cash YTD FY’25 Investing $25M in *CAPEX, $9M in Debt Service and Returned $95M to Shareholders in Combined Dividends and Share Repurchases Cash & Marketable Securities ($M) FY’25 YTD Capital Allocation ($M) Strong Liquidity with

  16. Slide 16: Footnotes

    Footnotes (1) Earnings Before Interest, Taxes, Depreciation & Amortization Adjusted to Exclude Restructuring Charges, Acquisition / Integration Costs, Impairment of Fixed Assets (Software Costs) and the Impairment of Right-of-Use Assets, when applicable. (2) Adj. Diluted Earnings per Share Adjusted

  17. Slide 17: Appendix: Reconciliations of Non-GAAP Financial Measures to U.S. GAAP

    APPENDIX Reconciliations of Non-GAAP Financial Measures to U.S. GAAP Financial Measures Earnings Conference Call December 5, 2024

  18. Slide 18: Reconciliation of Consolidated Net Income / Loss (GAAP) to Adjusted EBITDA (Non-GAAP)

    Reconciliation of Consolidated Net Income / Loss (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’24 Q2; FY’25 Q1; FY’25 Q2 YoY Sequential FY'24 FY'25 FY'25 Incr. / (Decr.) Incr. / (Decr.) Qtr. 2 Qtr. 1 Qtr. 2 $/% % $/% % Net (Loss) / Income Attributable to Korn Ferry ($1.7) $62.6 $60.8 $62.5 3653% ($1.

  19. Slide 19: Reconciliation of Net Income & Diluted EPS (GAAP) to Adjusted Net Income & Adjusted Diluted EPS

    Reconciliation of Consolidated Net Income / Loss & Diluted EPS (GAAP) to Adjusted Net Income & Adjusted Diluted EPS (Non-GAAP) ($M) FY’24 Q2; FY’25 Q1; FY’25 Q2 YoY Sequential FY'24 FY'25 FY'25 Incr. / (Decr.) Incr. / (Decr.) Qtr. 2 Qtr. 1 Qtr. 2 $ % $ % Net Income / (Loss) Attributable to Korn Ferr

  20. Slide 20: Reconciliation to Adjusted EBITDA - FY'24 Q2

    Reconciliation of Consolidated Net Loss & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’24 Q2 FY'24 Q2 Executive Search North Asia Latin Total Exec. Prof. Sch. Consulting Digital America EMEA Pacific America Search RPO & Interim Corp. KF Fee Revenue $177.8 $97.1 $132.5 $

  21. Slide 21: Reconciliation to Adjusted EBITDA - FY'25 Q1

    Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’25 Q1 FY'25 Q1 Executive Search North Asia Latin Total Exec. Prof. Sch. Consulting Digital America EMEA Pacific America Search RPO & Interim Corp. KF Fee Revenue $167.9 $88.2 $134.8

  22. Slide 22: Reconciliation to Adjusted EBITDA - FY'25 Q2

    Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’25 Q2 FY'25 Q2 Executive Search North Asia Latin Total Exec. Prof. Sch. Consulting Digital America EMEA Pacific America Search RPO & Interim Corp. KF Fee Revenue $166.8 $92.9 $129.9

  23. Slide 23: Reconciliation of Cash & Marketable Securities to Investable Cash

    Reconciliation of Cash & Marketable Securities to Investable Cash ($M) FY’24 Q2; FY’25 Q1; FY’25 Q2 YoY Sequential FY'24 FY'25 FY'25 Incr. / (Decr.) Incr. / (Decr.) Qtr. 2 Qtr. 1 Qtr. 2 $ % $ % Cash $620.8 $633.4 $694.9 $74.1 12% $61.5 10% Marketable Securities 223.0 271.8 272.6 49.6 22% 0.8 0% Cash

  24. Slide 24: Fee Revenue Growth by Segment and Region – Reported vs. Constant Currency

    Fee Revenue Growth by Segment and Region – Actual Reported vs. Constant Currency ($M) FY'25 Q2 vs. FY'24 Q2 Reported Const. Curr. $M % Grth. % Grth. Executive Search North America $129.9 (2%) (2%) Europe 46.8 9% 5% Asia / Pacific 21.5 11% 9% Latin America 7.9 (2%) 9% Total Exec. Search $206.0 1% 1%

  25. Slide 25: Thank You

    THANK YOU

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