Korn Ferry Posts Q1 Revenue Decrease of Three Percent

September 6, 2024 – Korn Ferry (NYSE:KFY) has posted 2025 fiscal first quarter revenues of $674.9 million, a decrease of three percent from the same period a year ago. The decrease in fee revenue was primarily due to lower fee revenues in professional search & interim and RPO driven by a decline in demand due to the current economic environment, partially offset by an increase in executive search fee revenue. Executive search fee revenue grew two percent year-over-year (up three percent at constant currency). Fee revenue for consulting and digital was flat year-over-year (up one percent and two percent, respectively, at constant currency), continuing to demonstrate stability in a challenging market.

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 $62.6 million, while diluted and adjusted diluted earnings per share were $1.17 and $1.18 in Q1 FY’25, respectively.

“I am pleased with our first quarter results, as we generated $675 million in fee revenue,” said Gary D. Burnison, CEO. “Earnings and profitability increased year over year as we delivered $111 million of adjusted EBITDA, at a 16.5 percent margin, which is our fifth consecutive quarter of profitability improvement.”

“Our sustained success stems from a balanced approach – from our colleagues and IP to our diversified strategy and broad offerings,” Mr. Burnison said. “As a result, our topline is more than 30 percent higher than before the pandemic, with even greater profitability. During the quarter, consulting and digital maintained their positive momentum, with improved growth in executive search and stable trends across professional search permanent placement and RPO. We are also confident about the future, as evidenced by our capital allocation, which not only included share buybacks but also more than a twofold increase in our quarterly dividend year over year. Moving forward, we will continue to transform the business to enable our clients to be more than.”

Related: Korn Ferry Announces Board Changes

During the quarter, Korn Ferry repurchased 351,250 shares of stock during the quarter for $23.5 million. The firm declared a quarterly dividend of $0.37 per share on September 4, 2024, which is payable on October 15, 2024 to stockholders of record on September 19, 2024.

Recent Partnership

Korn Ferry recently formed a partnership with Yoodli to provide professionals with private and real-time communication coaching using artificial intelligence (AI). “We’re pleased to partner with Yoodli to help professionals upskill themselves at their own pace,” said Bryan Ackermann, head of AI strategy and transformation, Korn Ferry. “Communication skills are one of the consistent enablers of professional success—from promotion conversations to boardroom presentations. This partnership lies at the heart of our strategy to bring cutting-edge generative AI and personalized coaching to our partners worldwide.”

Korn Ferry Appoints Senior Leaders

Korn Ferry has 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 Gary D. Burnison, CEO of Korn Ferry. “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.

Yoodli, a Seattle, WA-based company, helps individuals improve their communications skills using AI. Users can get coaching during online meetings, or they can practice for an upcoming speech, conversation, or interview with AI. Yoodli will then generate feedback on their content, conciseness and speaking attributes such as their executive presence, reliance on filler words, and pacing. Yoodli has been rolled out in more than 150 countries by Toastmasters International, business schools, and hundreds of thousands of leaders globally.

Outlook

Assuming worldwide geopolitical conditions, economic conditions, financial markets and foreign exchange rates remain steady, on a consolidated basis Korn Ferry anticipates second quarter FY’25 fee revenue is expected to be in the range of $655 million and $685 million; and Q2 FY’25 diluted earnings per share is expected to range between $1.11 to $1.23. On a consolidated adjusted basis Korn Ferry expects Q2 FY’25 adjusted diluted earnings per share is expected to be in the range from $1.14 to $1.26.

Shares of Korn Ferry have returned +7.6 percent over the past month versus the Zacks S&P 500 composite’s +3.4 percent change. Korn Ferry shares have added about 20.1 percent since the beginning of the year versus the S&P 500’s gain of 15.7 percent.

Related: Korn Ferry Appoints Senior Leaders

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor  – Hunt Scanlon Media