Korn Ferry · NYSE:KFY
Korn Ferry — Q2 FY2022 Earnings Presentation
25 slides from Korn Ferry's earnings presentation, Dec 8, 2021
Slide 1: FY’22 Q2 Earnings Call
FY’22 Q2 Earnings Call December 8, 2021
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 • Deeper penetration with clients and 9,500 experts strategically positi
Slide 5: FY’22 Q2 Financial Results Continued to Improve
FY’22 Q2 Financial Results Continued to Improve Reaching New All-Time Highs for Revenue, Earnings & Profitability $639M 21.1% +$204M +47% YoY +590 bps YoY (1) Fee Revenue Adj. EBITDA Margin % (Non-GAAP) $135M $1.53 +$69M YoY +$0.99 YoY (7) (1) Adj. EBITDA Adj. Diluted EPS (Non-GAAP) (Non-GAAP) See d
Slide 6: Business Continues to be Highly Diversified Across Lines of Business, Geography and Industry
Business Continues to be Highly Diversified Across Lines of Business, Geography and Industry For the second quarter of FY’22 Fee Revenue by Lines of Business Fee Revenue by Geography Fee Revenue by Industry 3% 5% 14% 23% 17% 16% 37% 18% 54% 14% 20% 26% 26% 27% Executive Search Digital NAM APAC Consu
Slide 7: Diversified Mix of Revenue & Operating Efficiencies Continue to Drive Greater Earnings
Diversified Mix of Revenue & Operating Efficiencies Continue to Drive Greater Earnings ($M) FY’21 QTR. 2 FY’22 QTR. 1 FY’22 QTR. 2 $435 $85(8) $585 $148(8) $639 $161(8) 100% 100% 100% $75 $81 90% $89 $29 90% 90% $26 $23 80% 80% 80% $86 $139 $150 70% 70% $34 70% $36 $14 60% 60% 60% 50% $127 50% $148
Slide 8: Monthly New Business - YoY Growth (Excluding RPO)
(11) Monthly New Business* - YoY Growth (Excluding RPO) New Business Up Consecutively Each Month in the Quarter Peaking in October FY’22 July to FY’22 October New Business at a Record High 43% 41% 35% 36% FY'22 - July FY'22 - Aug. FY'22 - Sept. FY'22 - Oct. * Confirmations plus upticks and additiona
Slide 9: Monthly New Business - YoY Growth By Line of Business
(11) Monthly New Business* - YoY Growth By Line of Business (Excluding RPO) FY’22 July to FY’22 October KF Total* Executive Search* New Business at a Record High 43% 74% 41% New Business at a Record High 35% 36% 55% 49% 47% FY'22 - July FY'22 - Aug. FY'22 - Sept. FY'22 - Oct. FY'22 - July FY'22 - Au
Slide 10: Sustainable Fee Revenues and Strong Execution Driving Greater Earnings & Profitability
Sustainable Fee Revenues and Strong Execution Driving Greater Earnings & Profitability from Pre-Pandemic Period ($M) Pre-Pandemic Today FY’20 YTD QTR. 2 FY’22 YTD QTR. 2 ▪ Fee Revenue Up 25%from Pre- Pandemic Level to an All-Time High $1,225 $169 ▪ Growth Driven by the Co.’s Unique Set $977 of Solut
Slide 11: Consulting
Consulting 26% of Fee Revenue and 19% of Adj. EBITDA in FY’22 QTR. 2 Adj. EBITDA ($M) & Adj. EBITDA(2) Consultant + Execution Fee Revenue Fee Revenue ($M) Margin (%) (Non-GAAP) Staff Productivity 30% YoY $148 $165 15.9% 18.1% 18.2% Hours Worked 399K 426K $349 445K $371 Av g. Bill Rate (+11% Sequenti
Slide 12: Digital
Digital 14% of Fee Revenue and 18% of Adj. EBITDA in FY’22 QTR. 2 Adj. EBITDA ($M) & Adj. EBITDA(2) Subscription & License Fee Fee Revenue ($M) Fee Revenue Margin (%) (Non-GAAP) Revenue(9) ($M) $89 32.2% 18% YoY 30.8% 31.8% $81 $75 $28.6 $26 (+10% Sequentially) $24 $25.6 $23 $23.1 ▪ New Business - $
Slide 13: Executive Search
Executive Search 37% of Fee Revenue and 41% of Adj. EBITDA in FY’22 QTR. 2 Adj. EBITDA ($M) & Adj. EBITDA(2) Global Fee Fee Revenue ($M) Margin (%) (Non-GAAP) Consultant Productivity Revenue $235 28.4% 28.1% $1.59 $1.66 $217 $7 $66.1 59% YoY $7 $28 19.1% $1.4 $61.6 $29 $2.4 $8.2 $1.16 $42 $8.3 565 5
Slide 14: RPO & Professional Search
RPO & Professional Search 23% of Fee Revenue and 22% of Adj. EBITDA in FY’22 QTR. 2 Adj. EBITDA ($M) & Adj. EBITDA(2) Fee Revenue New Business ($M) Fee Revenue ($M) Margin (%) (Non-GAAP) 76% YoY 24.4% 24.1% $195 $150 $139 $36.3 (+8% Sequentially) $34.0 $165 $59 $54 $150 $52 16.1% ▪ RPO New Business
Slide 15: Cash & Marketable Securities
Cash & Marketable Securities Strong Liquidity with $591M of Investable Cash(10) Investable Cash(10) Cash & Marketable Securities ($M) $133M $997 29% YoY $904 $747 $290 $406 Repurchased $289 184K shares ($13.6M) FY’22 YTD $614 $591 Dividend Payments $458 $14M FY’22 YTD FY'21 Q2 FY'22 Q1 FY'22 Q2 Inve
Slide 16: Footnotes
Footnotes (1) Earnings Before Interest, Taxes, Depreciation & Amortization Adjusted to Exclude Acquisition/Integration Costs, Impairment of Fixed Assets (Leasehold Improvements) and the Impairment of Right-of-Use Assets and Restructuring Charges. (2) Earnings Before Interest, Taxes, Depreciation & A
Slide 17: Appendix: Reconciliations of Non-GAAP Financial Measures to U.S. GAAP
Appendix Reconciliations of Non-GAAP Financial Measures to U.S. GAAP Financial Measures Earnings Conferenc e Call December 8, 2021
Slide 18: Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP)
Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’21 Q2; FY’22 Q1; FY’22 Q2 YoY Sequential FY'21 FY'22 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 2 Qtr. 1 Qtr. 2 $/% % $/% % Net Income Attributable to Korn Ferry $27.8 $74.8 $75.8 $48.0 173% $0.9 1% Net Income Attributa
Slide 19: Reconciliation of Net Income & Diluted EPS to Adjusted Net Income & Adjusted Diluted EPS
Reconciliation of Net Income (Loss) & Diluted EPS (GAAP) to Adjusted Net Income (Loss) & Adjusted Diluted EPS (Non-GAAP) ($M) FY’21 Q2; FY’22 Q1; FY’22 Q2 YoY Sequential FY'21 FY'22 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 2 Qtr. 1 Qtr. 2 $ % $ % Net Income Attributable to Korn Ferry $27.8 $74.8 $
Slide 20: 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 $42.4
Slide 21: Reconciliation of Consolidated Net Income & Operating Income to Adjusted EBITDA (FY’22 Q1)
Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’22 Q1 FY'22 Q1 Executive Search North Asia Latin Total Exec. RPO & Consulting Digital America EMEA Pacific America Search Prof. Search Corp. KF Fee Revenue $148.5 $80.7 $138.7 $42.7
Slide 22: Reconciliation of Consolidated Net Income (Loss) & Operating Income (Loss) to Adjusted EBITDA (FY’21 Q2)
Reconciliation of Consolidated Net Income (Loss) & Consolidated Operating Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’21 Q2 FY'21 Q2 Executive Search North Asia Latin Exec. RPO & Consulting Digital America EMEA Pacific America Search Prof. Search Corp. KF Fee Revenue $126.7 $75.0 $91.
Slide 23: Reconciliation of Cash & Marketable Securities to Investable Cash
Reconciliation of Cash & Marketable Securities to Investable Cash ($M) FY’21 Q2; FY’22 Q1; FY’22 Q2 YoY Sequential FY'21 FY'22 FY'22 Incr. / (Decr.) Incr. / (Decr.) Qtr. 2 Qtr. 1 Qtr. 2 $ % $ % Cash $553.1 $649.3 $725.4 $172.3 31% $76.1 12% Marketable Securities 194.3 255.0 271.5 77.2 40% 16.6 6% Ca
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 Q2 vs. FY'21 Q2 Reported Const. Curr. $M % Grth. % Grth. Executive Search North America $158.2 73.5% 72.9% Europe 42.4 34.2% 32.6% Asia / Pacific 28.3 35.8% 33.9% Latin America 6.6 47.5% 46.0% Total Exec. Search $
Slide 25: Thank You
Thank You «7 KORN FERRY