Korn Ferry Posts 47 Percent Increase in Revenues

Largest search firm posts a 47 percent revenue gain in its fiscal Q2 results. Revenues at Korn Ferry rose in all regions with North America leading the charge. Let’s go inside the latest numbers.

December 8, 2021 – Korn Ferry (NYSE:KFY) has posted 2021 fiscal reported second quarter revenue of $639.4 million, an increase of 47 percent from the second quarter of last year. Fee revenue increased in all lines of business. The increase in revenue when compared to Q2 fiscal year 2021 was primarily due to the record levels of new business in the quarter driven by the relevance of the firm’s solutions in helping businesses solve their organizational and human capital issues driven by secular changes (i.e., workforce transformation, diversity, equity & inclusion and environmental, social and governance) in today’s business environment. Further, the COVID-19 pandemic adversely impacted the company on a worldwide basis in Q2 fiscal year 2021.

Fee revenue increases were driven by an increase in the number of new search engagements as well as an increase in the average fee revenue per search. These increases were across all regions with the largest increase in North America.

The year-over-year improvement in operating margin was due to the increase in fee revenue discussed above, as well as cost savings realized from work being conducted virtually. Partially offsetting this were increases in compensation and benefits expense, general and administrative expenses and cost of services expense. The increase in compensation and benefits expense was driven by higher salaries and related payroll taxes and performance-related bonus expense due to the increase in fee revenue combined with increases in overall profitability and headcount. The change in general and administrative expenses was primarily due to integration and acquisition costs incurred in connection with the Lucas Group acquisition and the impairment charges associated with the execution of the Company’s real estate footprint reduction strategy. In addition, Korn Ferry incurred higher marketing and business development expenses which contributed to record fee revenue and new business in the quarter, as well as increased legal professional fees.

The Los Angeles-headquartered executive recruiter and leadership consultant – the largest globally and in the Americas as ranked by Hunt Scanlon Media – recorded net income of $75.8 million and record diluted and adjusted diluted earnings per share of $1.38 and $1.53 in Q2 fiscal year 2022, respectively.

“I am extremely pleased with our results during the fiscal second quarter, as Korn Ferry once again achieved all-time financial performance highs,” said Gary D. Burnison, CEO of Korn Ferry. “We generated a record $639 million in fee revenue, up 47 percent year over year. Our diluted and adjusted diluted earnings per share, at $1.38 and $1.53, respectively and adjusted EBITDA margin of 21.1 percent were also record highs.”

“Our solid performance over recent quarters speaks to our agility, execution and operational excellence amid a time of great change,” Mr. Burnison said. “The new world of work is all about career nomads, aging demographics, a real war for talent, work from anywhere, anytime and the digitization of everything. Companies are re-imagining their businesses, from strategy to people to culture. This constant state of flux represents opportunity for Korn Ferry and we look forward to continuing to drive performance for clients in the New Year ahead.”

During the quarter, Korn Ferry declared a quarterly dividend of $0.12 per share on December 7, 2021, which is payable on January 14, 2022, to stockholders of record on December 21, 2021.

During the quarter, Korn Ferry acquired Lucas Group. Financial terms of the deal were not disclosed. Lucas Group gives Korn Ferry professional search and contracting expertise which is expected to enhance the firm’s search portfolio. The addition of Lucas Group to Korn Ferry’s broader talent acquisition portfolio – spanning executive search, recruitment process outsourcing, and professional search – is expected to accelerate Korn Ferry’s ability to capture additional share of this significant market.

“This combination is the right move at the right time,” said Mr. Burnison. “Today’s workscape is being transformed before our eyes – people working anywhere, everywhere and at any time. Professionals are on the move, Boomers are retiring and career nomads are looking for change – early and often. We are seizing this opportunity to help clients find the right talent who are highly agile with specialized skills and expertise to help them drive superior performance,” added Mr. Burnison.

Related: Caldwell Posts Record Q3 Revenue Growth

“We are pleased to find the ideal strategic home at Korn Ferry,” said Randy Marmon, president and CEO of Lucas Group. “We are excited about what the future will bring from this acquisition in terms of anticipated synergistic offerings for our clients as well as career opportunities for our employees.”

Recent Additions

Korn Ferry has experienced a wave of growth in recently months. Recently, it named Lauren Shin as vice chairman of its board and CEO services and global consumer practices. She is based in the human capital consultancy’s New York office. “Lauren brings to Korn Ferry an exceptional track record of success, impeccable consumer industry knowledge and relationships at the highest levels,” said Doug Charles, president of Korn Ferry’s global consumer market. “Her understanding of the talent and leadership issues facing today’s senior executives and organizations, and the dramatic shifts impacting today’s workplace will be a great fit for Korn Ferry and our clients.”

Korn Ferry also named Alexander Strahl as a senior client partner and co-leader of its EMEA global technology practice. He is based in the firm’s Brussels office. “We are excited to have Alexander´s experience and leadership on board,” said Sonamara Jeffreys, co-president, EMEA, Korn Ferry. “He brings to Korn Ferry and our clients a wealth of international experience and has been a well-trusted advisor to leading private, large public and private equity-backed companies.” Mr. Strahl joins Korn Ferry from Spencer Stuart where he was the technology, media, and telecommunications practice leader in EMEA. Prior to this, he was working for Russell Reynolds Associates and Heidrick & Struggles as a core member of their technology practices.


Assuming no new major pandemic lockdowns (including emerging variants), and worldwide economic conditions, financial markets and foreign exchange rates remain steady, on a consolidated basis: Q3 fiscal year 2022 fee revenue is expected to be in the range of $640 million and $660 million; and diluted earnings per share is expected to range between $1.38 to $1.56.

Related: Heidrick & Struggles Posts Record Revenue Gain

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media


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