Korn Ferry · NYSE:KFY
Korn Ferry — Q4 FY2024 Earnings Presentation
25 slides from Korn Ferry's earnings presentation, Jun 13, 2024
Slide 1: FY’24 Q4 Earnings Call
FY’24 Q4 Earnings Call June 13, 2024
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
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
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
Slide 5: FY’24 Q4 Earnings and Profitability Grew Sharply Both YoY and Sequentially
FY’24 Q4 Earnings and Profitability Grew Sharply Both YoY and Sequentially as Revenue Continued to Stabilize with Early Signs of Improving Market Demand for Permanent Talent Acquisition Fee Revenue was Seasonally Strong with Stable Consulting and Digital Revenue Complementing Sequentially Improvin
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 fourth quarter of FY’24 Fee Revenue by Lines of Business Fee Revenue by Geography Fee Revenue by Industry 3% 7% 13% 19% 12% 29% 15% 18% 13% 28% 57% 18% 13% 26% 29% Executive Search Digital NAM APAC C
Slide 7: Diversified Mix of Revenue & Earnings ($M)
Diversified Mix of Revenue & Earnings ($M)(3) Consolidated Adj. EBITDA up Both YoY and Sequentially Driven by Strong Cost Management FY’23 QTR. 4 FY’24 QTR. 3 FY’24 QTR. 4 $731 $127(3) $669 $132(3) $691 $146(3) 100% 100% 100% $91 $90 $91 90% $24 90% $27 90% $28 80% 80% 80% $152 $131 $129 70% $27 70%
Slide 8: Quarterly New Business - YoY Growth (Excluding RPO)
Quarterly New Business* - YoY Growth (Excluding RPO) (7) New Business was Relatively Stable YoY Despite Challenges in the Near-Term Economic Outlook 0% 0% (2%) (3%) QTR. 3 FY'24 QTR. 4 FY'24 Constant Currency Actual F/X Rates * Confirmations plus upticks and additional placements See detailed explan
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 4% 0% 0% 0% 3% 2% 2% (1%) QTR. 3 FY'24 QTR. 4 FY'24 QTR. 3 FY'24 QTR. 4 FY'24 Executive Search* Professional Search & Interim* 9% 9% 1% 1% (6%) (6%) (12%)(12%) QTR. 3 FY
Slide 10: Consulting
Consulting 26% of Fee Revenue and 22% of Adj. EBITDA in FY’24 QTR. 4 (1) FY’24 Fee Revenue = $695M (+3% YoY) Q4 Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) Consultant + Execution 4% YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Staff Productivity Hours Worked 381K 417K (+5% at CC) $182 450K $438 $437
Slide 11: Digital
Digital 13% of Fee Revenue and 19% of Adj. EBITDA in FY’24 QTR. 4 (1) FY’24 Fee Revenue = $367M (+3% YoY) Q4 Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) Subscription & License Fee Flat YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Revenue(4)($M) (+1% at CC) 30.3% 30.7% $33 $33 Q4 New Business = $104M
Slide 12: Executive Search
Executive Search 29% of Fee Revenue and 31% of Adj. EBITDA(1) in FY’24 QTR. 4 FY’24 Fee Revenue = $806M ((8%) YoY) Q4 Global Fee Revenue Adj. EBITDA ($M) & Adj. EBITDA(1) (7%) YoY Fee Revenue ($M) Margin (%) (Non-GAAP) Consultant Productivity ((6%) at CC) 21.8% 22.9% NAM (7%), EMEA (2%), APAC $213 2
Slide 13: Professional Search & Interim
Professional Search & Interim 19% of Fee Revenue and 19% of Adj. EBITDA(1) in FY’24 QTR. 4 FY’24 Fee Revenue = $541M (+7% YoY) Professional Search & Interim New Adj. EBITDA ($M) & Consultant Business (12%) YoY Adj. EBITDA(1) Margin (%) Productivity Interim Fee Revenue ($M) (Non-GAAP) (Professional S
Slide 14: Recruitment Process Outsourcing
Recruitment Process Outsourcing 13% of Fee Revenue and 8% of Adj. EBITDA(1) in FY’24 QTR. 4 FY’24 Fee Revenue = $354M ((17%) YoY) RPO New Business(7) = $128M Adj. EBITDA ($M) & ($67M of New Logo Clients and Fee Revenue Adj. EBITDA(1) Margin (%) New Business(7) ($M) Under Contract(6) ($M) Fee Revenue
Slide 15: Maintaining a Balanced Approach to Capital Allocation
Maintaining a Balanced Approach to Capital Allocation Deployed $172M of Cash in FY’24 Investing $47M in *CAPEX, $18M in Debt Service and Returned $107M to Shareholders in Combined Dividends and Share Repurchases Cash & Marketable Securities ($M) FY’24 Capital Allocation ($M) Strong Liquidity with $6
Slide 16: Footnotes
Footnotes (1) Earnings Before Interest, Taxes, Depreciation & Amortization Adjusted to Exclude Restructuring Charges, Acquisition / Integration Costs, Impairment of Fixed Assets (Leasehold Improvements & Capitalized Software) and the Impairment of Right-of-Use Assets, when applicable. (2) Adj. Dilut
Slide 17: Appendix: Reconciliations of Non-GAAP Financial Measures to U.S. GAAP
Appendix Reconciliations of Non-GAAP Financial Measures to U.S. GAAP Financial Measures Earnings Conference Call June 13, 2024
Slide 18: Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’23 Q4; FY’24 Q3; FY’24 Q4 YoY Sequential FY'23 FY'24 FY'24 Incr. / (Decr.) Incr. / (Decr.) Qtr. 4 Qtr. 3 Qtr. 4 $/% % $/% % Net Income Attributable to Korn Ferry $47.5 $59.1 $65.2 $17.7 37% $6.1 10% Net Income Attributable to
Slide 19: Reconciliation of Net Income & Diluted EPS (GAAP) to Adjusted Net Income & Adjusted Diluted EPS
Reconciliation of Net Income & Diluted EPS (GAAP) to Adjusted Net Income & Adjusted Diluted EPS (Non-GAAP) ($M) FY’23 Q4; FY’24 Q3; FY’24 Q4 YoY Sequential FY'23 FY'24 FY'24 Incr. / (Decr.) Incr. / (Decr.) Qtr. 4 Qtr. 3 Qtr. 4 $ % $ % Net Income Attributable to Korn Ferry $47.5 $59.1 $65.2 $17.7 37%
Slide 20: Reconciliation of Consolidated Net Income & Operating Income to Adjusted EBITDA (FY’23 Q4)
Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’23 Q4 FY'23 Q4 Executive Search North Asia Latin Total Exec. Prof. Sch. Consulting Digital America EMEA Pacific America Search RPO & Interim Corp. KF Fee Revenue $175.3 $91.5 $135.3
Slide 21: Reconciliation of Consolidated Net Loss & Operating Income to Adjusted EBITDA (FY’24 Q3)
Reconciliation of Consolidated Net Loss & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’24 Q3 FY'24 Q3 Executive Search North Asia Latin Total Exec. Prof. Sch. Consulting Digital America EMEA Pacific America Search RPO & Interim Corp. KF Fee Revenue $166.9 $90.3 $121.4 $
Slide 22: Reconciliation of Consolidated Net Income & Operating Income to Adjusted EBITDA (FY’24 Q4)
Reconciliation of Consolidated Net Income & Consolidated Operating Income (GAAP) to Adjusted EBITDA (Non-GAAP) ($M) FY’24 Q4 FY'24 Q4 Executive Search North Asia Latin Total Exec. Prof. Sch. Consulting Digital America EMEA Pacific America Search RPO & Interim Corp. KF Fee Revenue $182.2 $91.3 $125.5
Slide 23: Reconciliation of Cash & Marketable Securities to Investable Cash ($M)
Reconciliation of Cash & Marketable Securities to Investable Cash ($M) FY’23 Q4; FY’24 Q3; FY’24 Q4 YoY Sequential FY'23 FY'24 FY'24 Incr. / (Decr.) Incr. / (Decr.) Qtr. 4 Qtr. 3 Qtr. 4 $ % $ % Cash $844.0 $736.8 $941.0 $97.0 11% $204.2 28% Marketable Securities 223.9 250.1 254.4 30.5 14% 4.3 2% Cas
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'24 Q4 vs. FY'23 Q4 Reported Const. Curr. $M % Grth. % Grth. Executive Search North America $125.5 (7%) (7%) Europe 45.6 (2%) (3%) Asia / Pacific 20.7 (11%) (8%) Latin America 6.9 (11%) (12%) Total Exec. Search $198.7
Slide 25: Thank You
Thank You y «4 KORN FERRY