Korn Ferry (KFY) 5 Sep 242025 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Korn Ferry First Quarter Fiscal Year 2025 Conference Call. [Operator Instructions].

As a reminder, this conference call is being recorded for replay purposes.

We have also made available in the Investor Relations section of our website at kornferry.com a copy of the financial presentation that we will be reviewing with you today.

Before I turn the call over to your host, Mr. first cautionary me to let Burnison, read statement a investors. Gary within today, made and those statements the in of statements Reform such Securities goals, meaning Litigation Private the forward-looking plan Certain XXXX. performance, call as Act of future relating constitute the to

on currently place in company based those undue control. materially or such Actual the results reliance periods of of statements believes are may a from Investors the which risks reflected in on assumptions, Although forward-looking desired because and cautioned future differ company's such are expected expectations are reasonable not to number the beyond statements. uncertainties

information Additional for in the the the fiscal filed SEC, presentation risks this and and be can in annual be quarterly year report including the XXXX ended the XX, company found with company's quarter other uncertainties report by in concerning periodic for company's release filed to XXXX. such the to July relating and the soon and reports

comments the non-GAAP and of currency financial adjusted EBITDA. some EBITDA constant as today amounts, Also, such measures reference may

in both section Additional which measures, at release reconciliations most including relating to and contained GAAP this financial measure comparable of is to the call directly company's these financial in posted earnings Relations information are the the the www.kornferry.com. concerning Investor presentation of website

that, over the go to call Burnison. I'll turn ahead, With Mr. Burnison. Mr. Please

how X hello, capable quarterly as in industry, come, as now was the for to of year get at the results, a how the us. joining I particularly reflect several this call, we're Thanks Tiffany, we economic as than the my, I and and have the at Bob we've From market exactly on first business. And on over and everybody. quarterly world. reset last into the sport level to become the is in us. quarters, think, described over you, are results. its and in what ever opportunity were reflecting multi-quarter XXth I I'm Leah, about going that, ahead Okay. many But we convinced and decades far highest Thank Greg countries around I more earnings first a in operating looking I -- ago

I can Consulting our billion to $X.X revenue doubled and did the first offerings. almost continue about Today, acquisition are we business the positive remember in those generate the Digital to momentum. $XX million. of solutions and We

solution extremely but, and only didn't in We an the synergistic is is interim million not have pandemic. that one, our almost that tapping brand. to offering market, addressable large revenue $XXX before Today, generating a

seen trends Further, improved Search, and more and recently, we've we're growth RPO. Search Professional stable in Executive across experiencing

reflecting our profiles, leading-edge And digital tremendous million and assessments, in our XX,XXX rates IP Consulting RPO our XX% about Our SaaS to more value data as years, solutions marquee over have XX,XXX rewards XX% and covering portfolio, we've the people accounts million importantly, organizations deployed the X/X last on regional XX than more success technology of than referrals few increased X/X our of new offering. of XXX added are now agreements business. our exceed our over by cross revenue. of

So that demonstrate working. clearly is future. yes, about I'm strategy The optimistic very our our results

which with even at top now profitability. the and more an higher is before was Our XX% line than already high than pandemic, time all-time greater that

an And with and in beginning across scratching leverage estimated our surface and quarterly This We is we're extend colleagues offerings tapping and brand reflected our opportunity. drive Ferry. even IP which is and of firm only a not only for the our more also our the year-over-year. in our included deliver just market that unparalleled diverse I'm but deeper than buybacks Korn our into clients. increase capital for are confidence impact share convinced incredible $XXX dividend proving that billion twofold allocation, we also can expertise to

will is X which marquee our regional of to than opportunity, on suite our offerings more be anchored almost that with least approach our on X and benefit clients full and nowhere that capitalize in strategic and forward is pronounced of from all accounts, pillars: going our offerings marquee use IP, and And strategy of our expertise. Number go-to-market service at one our

innovation and IP. Second,

embedding what in investments enterprise throughout across their to language organizations clients like. assessment, describe IP And giving processes. continued talent and coaching great talent, a and shared their we're Our that look and development are language

just Third, our an and brand, brand permission asset. incredible is which a

leadership talent, voice of We are and organizational strategy. the

to brand M&A. synergistic continue going We're explore and to Fourth, adjacent opportunities.

our all to our of organizations, and and us and to talent be and growth investing that. And of about, and we're of firm synchronizing unless drive create sits the opportunities. strategy about performance that it's at strategy know potential our all Fundamentally, That's talent And organizations finally, providing none their enabling opportunity. people in intersection own their developing talent it's more opportunity. what given colleagues, and superior client to our

With to you. that, turn over Bob, it I'll

morning. and Great. afternoon, good good Thanks, Gary,

quarter So fiscal revenue met or profitability fee start end really the our and guidance. the of exceeded first strong both our are a year, results for high new to our

margin fifth adjusted for quarter. Our EBITDA expanded consecutive the

respectively. now rates count, pre-pandemic. productivity, was higher bill revenue fee is by employee year-over-year we Our XX% consulting X% by it our than which X%, and And interim measure head per grew and

current to we business this the simply, And Given validate strategy. delivered. was quite quarter our environment, opportunity long-term another

organizational differentiated successfully value reinforcing and position consultancy. most really our We the to continue unique our delivering execute through as brands one of to clients our solutions and plan, trusted in

Digital, in X% was quarter constant only was for continued the currency. down and revenue revenue actually $XXX the we by million, return growth Search. Our driven in and stability consolidated a Executive Consulting Fee at for first year-over-year which was our quarter saw first fee to

solutions, signs Additionally, Search Pro stabilizing and acquisition saw demand talent permanent other our placement we of RPO. for both

in $XXX we EBITDA. delivered Now the quarter, of adjusted first million

diluted adjusted and earnings to our XX.X%, per grew per $X.XX Our at adjusted share EBITDA year-over-year margin share. grew

notable in and and first productivity improvements in The growth by continuing employee our disciplined driven is was our management. cost quarter's profitability

us Our important, improves really and top greater see to prolonged, we business a it again. environment earnings to and environment start operating achieve line is when continued leverage for business positions choppy growing growth ability greater the uncertain in and

Last, can the the business our sure to I'd to environment, confident I'd point to deployment business of return Greg give during of time, we also at levels we first like quarter. like of shareholders. But and, capture the very profitability capital we to remain update capital that maintain growth back you same reinvest spite our into and future that in current make on details. will an provide the current some more the out

both product first the XX by upgrades of into business, technology the back that million we other lines capital hiring digital lines across quarter, our invested all In in $XX approximately business fee for enables and of earners business. being

a In addition, and shareholders we to share of returned a through repurchases. combination total dividends $XX of million

turn the over going who's going to financial to some I'm through Now call Greg, take you company to highlights. overall

Consolidated currency. stable and revenue of to fee stabilizing down Fee Digital first constant X% at was up Thanks, constant 'XX the both at trends Digital currency X% quarter be up continued fiscal X% with and at for Consulting Consulting year-over-year in Bob. million. revenue year-over-year growth $XXX

currency, in both Talent growth stability was our of led also North Within Search Acquisition, Executive early Placement up Permanent which grew first by signs quarter. the at and solutions X% America, showed constant X% down interim and fee respectively. down for demand RPO at services Placement, Permanent on XX% Professional Search remained stabilized and XX%, revenue Market quarter. down approximately in the challenging X% first professional with year-over-year year-over-year

and at new X% constant down to X% at with year-over-year consolidated at new and X% Talent at the constant Search constant quarter up Executive was Search first new new Professional currency. was Acquisition Search quarter flat revenue, business in business XX% down new trends for also RPO, currency, business Placement Excluding sequentially. slightly year-over-year Permanent and and year-over-year continued first digital at fee Interim in Like currency business stabilize slower while year-over-year the up growth currency. currency was Consulting constant constant down stronger Professional for business X% year-over-year with

new with million which the extensions renewals which was million at RPO, awards, new in $XX million includes For business and $XXX awards, assignments. of logo new quarter -- first new of of strong $XX and

by in adjusted business. EBITDA staff adjusted management quarter, first up execution continued profitability Consolidated quarter to with to and driven consultant greater and and all grew our across margin of the cost in Earnings lines XX.X%, year-over-year, grow disciplined EBITDA both year-over-year. productivity XX% the points $XX first improving basis or million XXX

has margin now sequentially EBITDA adjusted Our quarters. X consecutive improved for

XX% per the quarter. fully quarter year-over-year. Fully share up Adjusted diluted $X.XX GAAP measured per the first or were $X.XX earnings by diluted share earnings were in $X.XX, first in

million. position to Our the investable improved of quarter cash the first end $XXX at

expenditures capital XXX,XXX deployed and shares. million repurchase we allocation quarter using capital of debt of $XX.X cash, dividends for investing continues first million $XX.X shareholders, to Our and million balanced. returned In million $XX to in million 'XX, be $XX million in $X $XX to service the fiscal

Now over our I'll Tiffany detail. review turn call operating segments the in to to more

Gregg. was Thanks, fee accounted constant quarter, in currency of year-over-year million constant Digital quarter. currency. subscription year-over-year revenue revenue revenue was in million, was the KF fee license quarter the approximately for with and at $XX first which $XX at XX% and Digital, Starting up X% X% the which first was for fee up

quarter. as overall for with remains million total New pipeline subscription we and KF the million, XX% $XX was Digital to tied business into digital The the strong sales. head or of healthy second at $XX license for

margin remained in strong driven reaching by revenue management. first EBITDA also XX.X%, and the adjusted stable cost disciplined Digital's quarter, fee

was the Consulting's in $XXX million, rate at constant average growth revenue was up fee strategy, XX% per X% X% strongest was quarter currency. increased quarter, $XXX first For year-over-year. revenue in which the up Fee in organizational consulting, year-over-year year-over-year. was was first hour which which bill

points execution for rates driven Adjusted consultant and utilization. XX.X% XXX greater higher Consulting, staff bill to year-over-year increasing continued margin also and basis EBITDA to by both improve

the $XX XX% was XX% for was measured in Placement Total quarter fee for sequentially. Fee in The X% only year-over-year. or first million and but $XX stable $XX also down Professional $XXX contracting XX% which for only revenue year-over-year annualized Service Professional interim million year-over-year. consultant revenue down $XXX,XXX and first Search continued quarter productivity X% at quarter the stabilize down revenue remained revenue year-over-year, the was trends first sequentially. was XX% to million, in first for fee Professional Permanent the or and with million quarter Search Interim sequentially up

which of bill year increased broader average interim's the the demand, ecosystem. management. primarily being cost rate reflective of X and in first X% in Adjusted Interim the added Professional slowdown part ago to disciplined for hour, and to by per is up $XXX Korn XX.X% is driven margin improved Ferry the quarter, Despite of Search EBITDA from value

in increase an revenue year-over-year which was flat Recruitment currency base million, X by hiring contract stabilized $XXX of was $XX first $XXX XX% first be due to the the to quarters. on in revenue under part X% the Process to with clients. end in the quarter and or Fee volume million down recognized at constant Total approximately Moving Outsourcing. at next RPO for quarter at million sequentially within

timing clients staff productivity and lumpy, existing be strong first the and disciplined the improved renewals cost driven and management. business RPO new margin logo XX.X% adjusted for RPO quarter, both of by EBITDA with in both for Although remains new The to pipeline the execution extensions can for wins. greater

improved global by quarter million, return past Search for Search the with fee at number EBITDA XX.X%. quarters fee for Executive segment. Both marking QX driving measured an for stable $XXX in Finally, productivity of the revenue the to adjusted year-over-year sequentially consultants of first fee $XX X% Global EBITDA and consultant in the million up first the has a revenue been growth constant with several to revenue for quarter, margin per search adjusted consultant was currency. Executive

call 'XX. call the over to the I -- of back to discuss outlook quarter will now fiscal our turn for Bob second

Thanks, Great. Tiffany.

quarter, business quarter, continued back August second several For to new up XX% was came our in line the first choppy, entering exiting year-over-year in business July, our last trends down months, growth new expectations. in be and the have with

million share consolidated and share first per per XX.X% to from $XXX conditions, our rates, financial diluted fee second no earnings quarter approximate our we adjusted the $XXX $X.XX. in to expect range range in adjusted to GAAP $X.XX. and And foreign economic conditions, $X.XX markets range to finally, exchange expect changes revenue further geopolitical XX.X% to in from to to Assuming to earnings million, quarter we $X.XX EBITDA margin worldwide from our the diluted

operating Now in message the from economic full call. of new our are challenges. environment earnings last in closing, I is reiterate uncertainties and we will The today contradictions,

driving maintenance and And productivity very ball the yet at As to base agree our we disciplined to truly these head I measured we management we're of always I beginning a position on with team, includes say, game. which a controlling profitability, laser-focused best confronting issues can while control, we wholeheartedly cost on, the to what's are maintain as our believe and be come. growth. going making I of the what firm are investments Gary, long-term for And is to long our

that, questions With any answer you we be may would glad to have.

Instructions]. [Operator

first question Romeo from William is with Our Trevor Blair.

I had just margins. one First was on

to again, through this see about XX.X%, uptick to quarter. really macro a of But some of target without of momentum yet. you're just margins, EBITDA much of kind XX% really kind nice I there think, environment the XX% type coming at upward longer-term for already in this thinking cyclical

rebound once that years? a do good do a think the you still Or could businesses? think more that is So get to some next the of in over to several there be cyclical range we upside about

could we seen XX% world, exactly to year ago, year around with there to it's predicted and what exactly A multi-quarter upside would do be now, thought we the we for is as very the last And a that. the reset out what we've thought. we played I economies there think in But a comfortable XX%. be year feel over ago.

very some very, those around decisions be decisions made year ago we turned to And our out good structure. hindsight. so in a hard And very operating have

reinvesting same onto And on this we time, total. platform in are Bob the in XX new business. And the as quarter, at brought we the said, consultants

XX% now, could there XX%. sure. some for the yes, with upside for sticking So to to be that But we're

see here, nice for the uptick I think looks then it like looking the if you're revenue my X% to at think a QX. Typically, most expecting follow-up just you midpoint, And in about years a I QX Great. guidance, Okay. decline take pretty QX. sequential I

So in than seeing more was maybe if different you're you prior what, kind of color on years if bit is give what the could a that businesses and of just anything, terms progression? across sequential wondering

right. of like you're think Generally, we uptick that. see an I Yes, X%, something

the So X wars you're We've had about, snap the in that elections, Paris. Olympics on trade right that. conflicts, know continued you

the in there's So events feel things going given lot have and the next in just we that quarter. that like been business world, around August on been environment will July flattish a this of with and be

and We're impactful thing see on other per the consulting much towards The in business, happening you engagements. rate moving that's and hour. it bigger is the more

million for tripled. example, And so have X.X engagements over

And so those take longer to work through.

certainly that's well. playing And it so as into

you follow helpful. clients. some because all? U.S. from in coming in North at up near mentioned the hearing just any you And in kind impact Europe, That's that to of quickly term the with up I elections election the maybe America be there snap seeing I the believe. guess could you're Are impact

But of States. is it's of We business last that which the new haven't seen X United sign. months, EMEA, that. trailing months, months, X speaking X the in strong the been up seen very, summertime very given have the not no, And X we a

of line Tong the with to go we George Sachs. Next, Goldman

rate what the Executive the you American growth of Search and elaborate notable improvement drove current Can business saw growth quarter. improvement in its how a on trajectory in sustainable North the Your is?

business it actually sustainable the more business than pandemic. doing how slightly is new the Well, and revenue, more is, before today

Our productivity very, very million about good so. was at or $X.X

so to in at say sure, business. that plenty run, search there's And for and that room we of look

the people succession. days X these age is the the turning that in We've the to X million, and a the around clearly industry. over XX, been business peak the X And retirements. is workers boom our The sport some bit that a work we're that States the as from has a well probably our that I've highest seen seen baby recently, next level driving Executive is you of of lose broader that from the And consulting million demographic United quite going of doing XX tell search number trends, probably of last to work as I'll years. backdrop business. to Search of focus year ranges X

can clearly, that momentum. -- sustained provides so provide And

what yes, comfortable in where we to to in the environment we've Executive And uptick we so very and feel America. you very, -- last holds have see we've seen And seen since the operating the confident June. Search in business about future, we'll an talked North but in we're

very That's helpful context. it. Got

in Search about cited talk bit see You trends? little a into trends RPO and what businesses. inflect also stable trends would your you Professional to need stable those positive Can you for to more

for although been rates. broader I had an is is, of -- XX. significant pandemic, perspectives that our China XXX some One China before results. it's us. flights think on And like like impact were reflected part And States. now has China, thing there's place from read week growth a definitely one And a the the the it's Mainland in seen significant a something what and couple reflect on firm, that's definitely our there China, And on I United just I that to you've not in the business.

been And substantially growth the been decline or different China. wouldn't as have with have our much would so

Pro number made And with made this we of the on Search the -- we Interim decision reset, But see that back that we would towards thing ago, and the that and we really to other and ago. the we when was in Interim And on goes business. would it to a over that months, consultants year XX made over multi-quarter and that about decision profitable we a that, more did slightly pivot the side, megatrends the a a businesses forward XX thought decision we Professional the a both Search engagements. year adjust

is a decline, work. definitely big challenging, environment, said. when decisions you proven and the profitable only made the part seeing to more move Bob Search of Interim, look business also Pro we it's at as now have towards you're we when be is what macro story But revenue the that to you not see So which -- true,

in so And platform consultants year-over-year putting in number of Bob of terms like money said, reduced now XX%. we've in that businesses as this consultants those of we And CapEx. well the -- quarter, did reinvest as as the in number last into

And Sommer Truist. next, the we with Tobey to go line of

the that to still you to how around I a number? number, and maybe XX Is your about your that wanted just XX, of year of fee net hiring and on why? the businesses net for is could they're whether the balance dispersed And additional comment of talk is about hirer ask earners. sort be posture a

our is Bob maybe a the our great It year absolutely grow the do. management, will across break company we've posture same I'll consultants we have bit. have But is going always posture. to could next we sure, any which that done quarterly talent down it the that over At little to time, we're make the platform. do, net like

Digital. I to increased Those will tell Consulting Interim, for we're a focus the on focus we you we a ago made Professional areas profitable certainly and of on. more that work. that is because putting that have Part bias Search, of year an decisions

appetite last lot this a So we quarter. And of We a more detail. provide little in people an you market. be promoted bit do have to the Bob, can maybe

business. the XX earners brought the more or came we that would say, those concentrated onboard lines Search fee on, That's Consulting. where of across Executive The share Tobey -- the lion's that in of were and so Yes. were I on,

from modeling think cetera? net a reasonable that of we're consistent And a is things basis? talent Because number perspective, that just so about about way of XX et talking hires, sort is a on management, or to go-forward but XX

gross of it this hires number I is had No. The we mean quarter. XX hires was the gross.

number some us in say, lines I out. that a expect next that we the folks the the range. of be proactively, other But would see, would hires indicated, to decisions of of of business for Gary you to yes, I in As made same couple couple performance-manage quarters

and less little That's your it does Search that bit detail more something TAM not And engagements some some pivot you're just us Pro impact what then dip to Okay. look that of helpful. to other Give is to dig more in give the like? means. could you into those more profitable? slightly profitable a down what of characteristics Interim us Maybe detail. that willing sort And about

I around industry thing Well, think the pivots. is first

made some there. so And certainly decisions we've

industrial focus the decision to example, that more made. sector, been For on conscious we've a that's

starts both particularly opportunity big States. those it focus. in with our businesses part brand and EMEA. a could States, Both what opportunity, in the are Interim, United outside Professional they undersized, be So the of there industry The is outside those given Search the United

us over months investments think I so And few grow. you'll making businesses to in the EMEA in next those see

the of clients. only to but not but thing industry, is geography, other And the focus type

driving is And and our about we're part that towards go-to-market It's so sure We've world. make got on our we've on regional only make XX,XXX focus many moving XX,XXX. respects. laser around marquee But not are approach, which cheaper are all our to we impact a of want exclusively. we of clients And to sure deeper many, solutions the base. and that those clients, that of in penetrating got XXX client it existing

And had Search the quarters, making push including X our and we're of clients. it's and on those so solutions, past sure our marquee over huge accounts, Interim all on Professional regional or bringing to that X we've

as the could, Pro and for on penetration am us marquee Search over relatively the particularly, X is given to accounts. the digital around and we on us that satisfied as year that marquee bigger weren't offering solutions make we push a Interim a those thought we needed new not quarters. regional And we And a be and ago, going accounts. still around a good with that to push was a that doing regional the job we for That's next other one Interim

Bob. Gary, it's

is into relationships. phenomenal connecting who well Executive partners Search ecosystem, when as they're our add you would bring with that, our companies these I thing other The have

than at Ferry. naturally are acquired were Korn by the so they to prior And being a operating perhaps level higher companies

So that drives up well. of some as the profitability

many some have that have tripled. give could. year-over-year? what us period mentioned terms, And Is I how tripled. for for engagements over Could question you context in Last X.X they engagements if million approximate Gary, me, of over Right. are? those there you large

give Well, I'll tell sequentially you have they've details. have improved. think you I'll the even to Bob that I

backlog in it as quarter. of the Bob, at depth, of maybe can same the can you about backlog of Consulting the was Our quarter some the then in the in comment on Bob correct was and me that. first And fourth end essentially terms

Yes. ballpark, it's See where we saw was the number same at the the But large I increase And don't $XXX have to of roughly exact Tobey. QX, look XX backlog the in engagements into up you it when in of above going in million of X-month going X.X million QX, into approximately in million. Those time. engagements, a just went from a about X.X north bit period little million.

Sinatra our question Alex come ] with [ And will Baird. last from

is Sinatra for on Alex Marcon. Mark This

off, congratulations the margin on continued strength. First

Professional that. how job you received you that and Services did received newer mention it wondering internally? really progress And done I could management? I good You've was Interim quarterly areas was touch those because a has in on been in particular, if keeping talent guess, how

that recognizes go everybody the and all over year. back a we're think in I Well, decisions environment well those of

which So X those X the nothing ago. really hard were year last months, changed a has months, decisions, over done were

think you I you to colleagues have that make. and employees are very decisions very, you worst the weigh And And recognize on that I my around see heart, my that. in those those decisions, they And We're and think interesting that. everybody, a environment for mind. recognize so past I when look sure. And take

issues any see don't there. I So

orders a bit And hoping I more get was regarding quick, to the month. then little by Okay. really color confirmed Great.

were softening? given being You just flash mentioned signs was labor seeing year-over-year. for what you of wondering market the I increasing July from up current kind reports month And of the

here just say with the pretty we call. I would -- seen. X -- too way to anything we know Yes. is We don't you've been early September. don't last consistent can't have months in what September

other And questions. no we have

You continue. may

you, us. Okay. joining Thank for everybody,

I the I and the around this I'm at As think in operating our is brand colleagues, is our beginning. the where said beginning, incredibly of proud world. us, this for organization

for Thank time. you your time. and for to you we'll talk thank listening, next So you

your Ladies does gentlemen, Thank and your participation. for conference for that conclude today. you

You may disconnect. now