Korn Ferry · NYSE:KFY
Korn Ferry — FY2022 Q3 Earnings Presentation
25 slides from Korn Ferry's earnings presentation, Mar 9, 2022
Slide 1: FY’22 Q3 Earnings Call
FY’22 Q3 Earnings Call March 9, 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement FORWARD-LOOKING STATEMENTS Statements in this presentation that relate to future results and events 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 differ materially from thos
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 through continued Intentional shift t
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 Strengthened Solutions Lining Up to Poised for Foundation Macro Trends Growth • Recognized industry leader in with • Rapid emergence of remote work • Top-line durability - deeper 10,000+ experts strategically necessitati
Slide 5: Financial Results Continued to Improve in FY’22 Q3 with New Highs for Both Revenue & Earnings
Financial Results Continued to Improve in FY’22 Q3 with New Highs for Both Revenue & Earnings $681M 20.3% +$205M +43% YoY (1) Adj. EBITDA Margin % Fee Revenue (Non-GAAP) $138M $1.59 +$42M +43% YoY +$0.64 +67% YoY (2) Adj. EBITDA (1) Adj. Diluted EPS (Non-GAAP) (Non-GAAP) See detailed explanation of
Slide 6: Business Continues to be Highly Diversified Across Lines of Business, Geography and Industry
Business Continues to be Highly Diversified Across Lines of Business, Geography and Industry For the third quarter of FY’22 Fee Revenue by Lines of Business Fee Revenue by Geography Fee Revenue by Industry 3% 4% 14% 15% 18% 28% 35% 18% 55% 27% 19% 13% 24% 27% Executive Search Digital NAM APAC Consum
Slide 7: Diversified Mix of Revenue & Operating Efficiencies Continue to Drive Greater Earnings ($M)
Diversified Mix of Revenue & Operating Efficiencies Continue to Drive Greater Earnings ($M) FY’21 QTR. 3 FY’22 QTR. 2 FY’22 QTR. 3 $475 $116(3) $639 $161(3) $681 $167(3) 100% 100% 100% $76 $89 $90 $28 90% 90% $29 90% $27 80% 80% 80% $95 $150 $189 70% 70% $36 70% $44 $20 60% 60% 60% 50% $136 50% $165
Slide 8: Monthly New Business - YoY Growth (Excluding RPO)
Monthly New Business* - YoY Growth (Excluding RPO) (6) January New Business Rebounded Sharply From a Seasonal Low in December FY’22 November to FY’22 January 39% 37% 15% FY'22 - Nov. FY'22 - Dec. FY'22 - Jan. * Confirmations plus upticks and additional placements See detailed explanation of footnote
Slide 9: Monthly New Business - YoY Growth By Line of Business
Monthly New Business* - YoY Growth By Line of Business (6) (Excluding RPO) FY’22 November to FY’22 January KF Total* Executive Search* New Business at a New High 37% 39% 52% 51% 15% 11% FY'22 - Nov. FY'22 - Dec. FY'22 - Jan. FY'22 - Nov. FY'22 - Dec. FY'22 - Jan. Digital and Consulting Professional
Slide 10: Sustainable Fee Revenue and Strong Execution Driving Greater Earnings & Profitability from Pre-Pandemic Period
Sustainable Fee Revenue and Strong Execution Driving Greater Earnings & Profitability from Pre-Pandemic Period ($M) Pre-Pandemic Today FY’20 YTD QTR. 3 FY’22 YTD QTR. 3 Fee Revenue Up 28%from Pre- Pandemic Level to a New High $1,905 $260 Growth Driven by the Co.’s Unique Set of Solutions that Ad
Slide 11: Consulting
Consulting 24% of Fee Revenue and 17% of Adj. EBITDA in FY’22 QTR. 3 Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) Consultant + Execution 20% YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Staff Productivity Hours Worked Driven by Leadership Development $165 20.2% 372K 424K $163 18.2% 445K (+21%), Asses
Slide 12: Digital
Digital 13% of Fee Revenue and 17% of Adj. EBITDA in FY’22 QTR. 3 Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) Subscription & License Fee 19% YoY Fee Revenue ($M) Margin (%) (Non-GAAP) 35.8% Revenue(4)($m) 32.2% 31.2% New Business was $108M (+8% $29 $89 $90 YoY) – the fifth consecutive $26 $28.6 $2
Slide 13: Executive Search
Executive Search 35% of Fee Revenue and 40% of Adj. EBITDA in FY’22 QTR. 3 Global Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) 42% YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Consultant Productivity 28.1% 27.5% NAM +44%, EMEA +32%, 24.8% $1.66 $1.66 APAC +45% & LATM 67% $235 $239 $7 $66.1 $65.7 (Glo
Slide 14: RPO & Professional Search
RPO & Professional Search 28% of Fee Revenue and 26% of Adj. EBITDA in FY’22 QTR. 3 RPO New Business = $135M ($74M of renewals/extensions and Adj. EBITDA ($M) & Adj. EBITDA(1) New Business ($M) Fee Revenue ($M) Margin (%) (Non-GAAP) $61M of new logo clients) Professional Search New $189 24.1% Busine
Slide 15: Cash & Marketable Securities
Cash & Marketable Securities Strong Liquidity with $592M of Investable Cash(5) Investable Cash(5) Cash & Marketable Securities ($M) $58M $997 $1,107 +11% YoY $897 $515 $406 $363 Repurchased 796K shares ($55M) FY’22 YTD $534 $591 $592 Dividend Payments $20M FY'21 Q3 FY'22 Q2 FY'22 Q3 FY’22 YTD Invest
Slide 16: Footnotes
Footnotes (1) Earnings Before Interest, Taxes, Depreciation & Amortization Adjusted to Exclude, when applicable, Acquisition / Integration Costs, Impairment of Fixed Assets (Leasehold Improvements), the Impairment of Right-of-Use Assets, Restructuring Charges and Separation Costs. (2) Adj. Diluted E
Slide 17: Appendix: Reconciliations of Non-GAAP Financial Measures to U.S. GAAP
Appendix Reconciliations of Non-GAAP Financial Measures to U.S. GAAP Financial Measures Earnings Conferenc e Call March 9, 2022
Slide 18: Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M)
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’21 Q3; FY’22 Q2; FY’22 Q3 YoY Sequential FY'21 FY'22 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 3 Qtr. 2 Qtr. 3 $/% % $/% % Net Income Attributable to Korn Ferry $51.3 $75.8 $84.1 $32.8 64% $8.3 11% Net Income Attributable to
Slide 19: Reconciliation of Net Income & Diluted EPS (GAAP) to Adjusted Net Income & Adjusted Diluted EPS
Reconciliation of Net Income & Diluted EPS (GAAP) to Adjusted Net Income & Adjusted Diluted EPS (Non-GAAP) ($M) FY’21 Q3; FY’22 Q2; FY’22 Q3 YoY Sequential FY'21 FY'22 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 3 Qtr. 2 Qtr. 3 $ % $ % Net Income Attributable to Korn Ferry $51.3 $75.8 $84.1 $32.8 64%
Slide 20: Reconciliation of Consolidated Net Income & Operating Income to Adjusted EBITDA (FY’21 Q3)
Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’21 Q3 FY'21 Q3 Executive Search North Asia Latin Total Exec. RPO & Consulting Digital America EMEA Pacific America Search Prof. Search Corp. KF Fee Revenue $136.3 $75.8 $106.0 $36.0
Slide 21: Reconciliation of Consolidated Net Income & Operating Income to Adjusted EBITDA (FY’22 Q2)
Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY'22 Q2 FY’22 Q2 Executive Search North Asia Latin Total Exec. RPO & Consulting Digital America EMEA Pacific America Search Prof. Search Corp. KF Fee Revenue $164.9 $88.6 $158.2 $42.4
Slide 22: Reconciliation of Consolidated Net Income & Operating Income to Adjusted EBITDA (FY’22 Q3)
Reconciliation of Consolidated Net Income (Loss) & Consolidated Operating Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’22 Q3 FY'22 Q3 Executive Search North Asia Latin Total Exec. RPO & Consulting Digital America EMEA Pacific America Search Prof. Search Corp. KF Fee Revenue $162.9 $90.
Slide 23: Reconciliation of Cash & Marketable Securities to Investable Cash ($M)
Reconciliation of Cash & Marketable Securities to Investable Cash ($M) FY’21 Q3; FY’22 Q2; FY’22 Q3 YoY Sequential FY'21 FY'22 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 3 Qtr. 2 Qtr. 3 $ % $ % Cash $694.1 $725.4 $846.5 $152.4 22% $121.1 17% Marketable Securities 203.0 271.5 260.7 57.7 28% (10.8) (4
Slide 24: Fee Revenue Growth by Segment and Region – Actual Reported vs. Constant Currency
Fee Revenue Growth by Segment and Region – Actual Reported vs. Constant Currency FY'22 Q3 vs. FY'21 Q3 Reported Const. Curr. $M % Grth. % Grth. Executive Search North America $152.6 44.0% 43.8% Europe 47.5 31.9% 36.5% Asia / Pacific 31.4 45.4% 47.4% Latin America 7.5 66.7% 78.6% Total Exec. Search $
Slide 25: Thank You
Thank You «7 KORN FERRY