September 7, 2023 – Korn Ferry (NYSE:KFY) has posted 2024 fiscal first quarter revenues of $699.2 million, essentially flat from the same period a year ago. Fee revenue remained constant primarily due to an increase in the interim portion of Professional Search & Interim, resulting from the acquisitions of Infinity Consulting Solutions which was effective Aug. 1, 2022 and Salo which was effective Feb. 1, 2023. This was partially offset by decreases in Korn Ferry’s permanent placement talent acquisition offerings, which includes executive search, permanent placement and RPO, due to a decline in demand driven by global economic and other factors.
The Los Angeles-headquartered executive recruiter and leadership consultant – the largest globally and in the Americas as ranked by Hunt Scanlon Media – also recorded net income of $46.6 million, compared to $77.2 million in Q1 last year.
“During the fiscal first quarter we generated $699 million in fee revenue, flat year-over-year,” said Gary D. Burnison, CEO. “Despite a more challenging market, I’m very proud of our organization and what we have achieved, particularly as earnings and profitability held steady sequentially as we delivered $0.89 of diluted earnings per share and $0.99 of adjusted diluted earnings per share and $96 million of adjusted EBITDA, with a 13.7 percent margin.”
“Our diversification strategy continues to positively influence our results,” said Mr. Burnison. “Our consulting and digital businesses have never been more meaningful—especially in tomorrow’s economy where there will be continued demographic and skill shifts across much of the world. We’re responding with expertise and solutions focused on interim talent, learning and professional development, engagement, retention, culture, assessments, and organizational design, as well as total rewards. We are creating more ways to deepen relationships with our clients.”
Korn Ferry also declared a quarterly dividend of $0.18 per share on Sept. 6, 2023, which is payable on Oct. 13, 2023 to stockholders of record on Sept. 22, 2023.
Korn Ferry is a Los Angeles-headquartered executive recruiter and leadership consultant and the largest globally and in the Americas. The firm’s 8,600 colleagues serve clients in more than 50 countries.
New Senior Leaders
In July, Korn Ferry named Jeanne MacDonald as chief executive officer, Recruitment Process Outsourcing (RPO) and Mathias Herzog will assume leadership of the firm’s digital solution. “Jeanne and Mathias are proven executives, and we are thrilled to have people of their caliber lead these offerings,” said Mr. Burnison. “Jeanne is the natural choice to lead RPO after years of overseeing global RPO solutions and playing a fundamental role in the business’s commercial and financial success. Mathias brings in-depth consulting and technology expertise that will help further the digitization of our offerings and intellectual property to drive superior client performance. With Jeanne and Mathias, we are confident that our RPO and digital solutions will continue to evolve and thrive.”
Ms. MacDonald joined Korn Ferry in 1998 and most recently served as president, global RPO Solutions, where she was responsible for oversight of Korn Ferry’s RPO businesses. She has worked in a variety of roles at Korn Ferry including senior recruiter, business development director for North America prior to moving into various leadership positions within the firm.
Korn Ferry Announces Board Changes
Korn Ferry has elected Charles Harrington as a new member to its board of directors and appointed Jerry Leamon as a new non-executive chair. Christina Gold, who has served on the firm’s board since 2014, and most recently as the non-executive chair since 2019, has retired from the board. In addition, George Shaheen retired from the board after more than 12 years of total service, including as non-executive chair from 2012 to 2019.
“We are pleased to have Chuck join our board,” said Gary D. Burnison, CEO of Korn Ferry. “I believe his extensive business experience, technology credentials, and financial acumen will be a great fit for Korn Ferry as we continue our efforts to broaden the scope of our offerings and help companies synchronize their strategy, operations, and talent to drive superior performance.”
Mr. Herzog joined Korn Ferry in 2023 and currently serves as president of the global technology, communications, media, and professional services practice. Prior to joining Korn Ferry, he served in several executive-level roles focused on corporate strategy, business operations, and GTM / sales. Mr. Herzog has held executive positions at Salesforce and Automation Anywhere and was a partner at multiple consulting firms.
Korn Ferry recently completed its previously disclosed acquisition of Salo LLC, a provider of finance, accounting, and HR interim talent. “Salo will be a great fit, with highly relevant interim professional offerings and expertise that speak to today’s world of work – a new workscape in which more than one-third of the U.S. workforce alone considers themselves to be independent,” said Mr. Burnison. “The Salo acquisition reflects our continued focus on high-demand areas emerging in this environment, as we scale our solutions at the intersection of talent and strategy.”
“Through the acquisition of Salo, Korn Ferry will further broaden its ability to deliver to organizations experienced professionals, who will take on impactful roles on an interim or project basis, particularly in the high-demand areas of finance, accounting, and HR,” Korn Ferry said. “Now, with Korn Ferry, we will be part of a global network of colleagues, with access to vast IP and more expansive client relationships and opportunities at every turn,” said Lisa Brezonik, CEO of Salo. “Our track record of success and deep interim professional solutions expertise, combined with Korn Ferry’s expansive credentials, will provide clients with greater opportunities to make an impact. We’re excited to be joining Korn Ferry and look forward to what the future holds.”
Assuming no new major pandemic related lockdowns or further changes in worldwide geopolitical conditions, economic conditions, financial markets or foreign exchange rates, on a consolidated basis Korn Ferry anticipates: Q2 fiscal year fee revenue to be in the range of $675 million and $695 million; Q2 fiscal year diluted earnings per share is the range between $0.85 to $0.97. On a consolidated adjusted basis Korn Ferry expects Q2 fiscal year adjusted diluted earnings per share to be in the range from $0.91 to $1.01.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media