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Korn Ferry Announces Fourth Quarter and Full Year FY’24 Results of Operations

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Korn Ferry reported its Q4 FY’24 fee revenue at $690.8 million, a 5% decrease from the previous year, and full-year revenue of $2.76 billion, down 3%. Despite the revenue decline, the company saw improved profitability with Q4 net income of $65.2 million and adjusted EBITDA of $112.3 million. Consulting and Digital divisions posted record revenues, with Consulting reaching $695 million and Digital $366.7 million. The average bill rate in Consulting rose to $420 per hour. Korn Ferry repurchased 365,000 shares and increased its quarterly dividend to $0.37 per share. The company attributes its resilience to its diversified offerings amid a challenging economic environment.

Fourth Quarter and Full Year Highlights

  • Korn Ferry reports Q4 FY’24 fee revenue of $690.8 million, a year-over-year decrease of 5% in both actual and constant currency and full year FY’24 fee revenue of $2,762.7 million, a year-over-year decrease of 3% in both actual and constant currency.
  • Our full year FY’24 Marquee and Regional Account fee revenue generated slightly more than 37% of our consolidated fee revenue and grew 3% year-over-year at actual, and 2% at constant currency.
  • Net income attributable to Korn Ferry for the fourth quarter and full year of FY’24 was $65.2 million and $169.2 million, respectively, while diluted and adjusted diluted earnings per share were $1.24 and $1.26 in Q4 FY’24, and $3.23 and $4.28 for the full year, respectively.
  • Operating income in the fourth quarter was $83.5 million with an operating margin of 12.1%, while full year operating income was $212.9 million with an operating margin of 7.7%.
  • Fourth quarter Adjusted EBITDA was $112.3 million with an Adjusted EBITDA margin of 16.3%, our fourth consecutive quarter of improved Adjusted EBITDA margin. Full year Adjusted EBITDA was $408.2 million with an Adjusted EBITDA margin of 14.8%.
  • Consulting and Digital both posted full year record high fee revenue at $695.0 million and $366.7 million, respectively.
    • Subscription and License full year fee revenue increased 9% to $131 million.
    • Consulting’s full year average hourly bill rate increased 11% to $420, with an average bill rate of $437 in the fourth quarter.
  • The Company repurchased 365,000 shares of stock during the quarter for $22.9 million, bringing full year repurchases to 930,000 shares for $52.5 million.
  • On June 12, 2024, the Company increased its regular quarterly dividend to $0.37 per share, which is payable on July 31, 2024 to stockholders of record on July 3, 2024.

Los Angeles, June 13, 2024 –Korn Ferry (NYSE: KFY), a global organizational consulting firm, today announced its financial results for the fourth quarter and full fiscal year ended April 30, 2024. The company reported strong performance across its diversified portfolio, despite a challenging economic environment.

Fourth Quarter and Full Year Highlights:

  • Q4 FY’24 Fee Revenue: $690.8 million, a 5% decrease year-over-year.
  • Full Year FY’24 Fee Revenue: $2.76 billion, down 3% year-over-year.
  • Net Income for Q4 FY’24: $65.2 million.
  • Net Income for Full Year FY’24: $169.2 million.
  • Diluted Earnings Per Share (EPS) for Q4 FY’24: $1.24.
  • Adjusted Diluted EPS for Q4 FY’24: $1.26.
  • Diluted EPS for Full Year FY’24: $3.23.
  • Adjusted Diluted EPS for Full Year FY’24: $4.28.
  • Operating Income for Q4 FY’24: $83.5 million with an operating margin of 12.1%.
  • Full Year Operating Income: $212.9 million with an operating margin of 7.7%.
  • Q4 FY’24 Adjusted EBITDA: $112.3 million with a margin of 16.3%.
  • Full Year Adjusted EBITDA: $408.2 million with a margin of 14.8%.
  • Consulting and Digital Divisions: Achieved record high fee revenues of $695 million and $366.7 million, respectively.
  • Subscription and License Fee Revenue: Increased by 9% to $131 million.
  • Consulting Average Hourly Bill Rate: Increased by 11% to $420, with $437 in Q4.
  • Stock Repurchase: 365,000 shares for $22.9 million in Q4, totaling 930,000 shares for $52.5 million for the full year.
  • Dividend Increase: Regular quarterly dividend increased to $0.37 per share, payable on July 31, 2024.

CEO Comments: “I am pleased with our fourth quarter results, as we generated $691 million in fee revenue,” said Gary D. Burnison, CEO of Korn Ferry. “Earnings and profitability increased year-over-year and sequentially as we delivered $112 million of Adjusted EBITDA, at a 16.3% margin, which is our fourth consecutive quarter of profitability improvement.

“In an economic environment in which companies are fighting for growth and relevancy, our portfolio is performing as designed and the strategy is clearly working. Cyclically sensitive talent acquisition offerings are being buoyed by continued stability from our diversified offerings – particularly Consulting, complemented by Digital, which have generated solid performance. As we look to a new fiscal year, I have never been more proud of our organization – from our colleagues, expertise, IP and insights to the incredibly innovative and relevant solutions we offer to clients in a rapidly changing world.”

Detailed Financial Performance:

  • Consulting Division: Fee revenue for Q4 FY’24 was $182.2 million, up 4% year-over-year. Full-year revenue was $695 million, with an average bill rate increase to $420.
  • Digital Division: Q4 FY’24 fee revenue was $91.3 million, flat year-over-year. Full-year revenue was $366.7 million, with subscription and license fee revenue increasing by 9% to $131 million.
  • Executive Search: Q4 FY’24 fee revenue was $198.7 million, down 7% year-over-year. Full-year revenue was $806.2 million.
  • Professional Search & Interim: Q4 FY’24 fee revenue was $129.2 million, down 15% year-over-year. Full-year revenue was $540.6 million.
  • Recruitment Process Outsourcing (RPO): Q4 FY’24 fee revenue was $89.5 million, down 10% year-over-year. Full-year revenue was $354.1 million.

Outlook: For the first quarter of FY’25, Korn Ferry expects fee revenue to range between $655 million and $675 million, with diluted EPS expected to be between $1.05 and $1.15. On an adjusted basis, diluted EPS is expected to be between $1.07 and $1.17.

About Korn Ferry: Korn Ferry is a global organizational consulting firm. We help clients synchronize strategy and talent to drive superior performance. We work with organizations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people. Visit kornferry.com for more information.

Forward-Looking Statements: Statements in this press release that relate to our outlook, projections, goals, strategies, future plans, and expectations, including statements relating to expected demand for and relevance of our products and services, expected results of our business diversification strategy, and other statements of future events or conditions are forward-looking statements that involve a number of risks and uncertainties. Actual results may differ materially due to various risks and uncertainties, as detailed in Korn Ferry’s periodic filings with the Securities and Exchange Commission. Korn Ferry disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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