Korn Ferry (KFY) Baird 2024 Global Consumer, Technology & Services Conference summary

Business evolution and growth strategy

• Fee revenue has grown from $750 million to nearly $3 billion since 2012, with executive search now comprising only 30% of the business.

• Expansion has been driven by acquisitions and organic initiatives, with significant room for further growth.

• The company has diversified into consulting, digital, RPO, and professional/interim search, creating a more resilient revenue stream.

• Cross-selling and integrated solutions are emphasized, leveraging strong C-suite relationships.

• Global account leaders and development programs are expanding cross-selling capabilities.

Consulting and digital business

• Consulting covers organizational strategy, assessment and succession, leadership development, and total rewards.

• Average consulting deal size has grown from under $50,000 to over $200,000, with more multi-year, multi-million-dollar engagements.

• Digital business leverages vast proprietary data, with $135 million in subscription/license revenue out of $400 million total.

• Digital solutions are being unified on a single platform for easier client access.

• Digital and consulting businesses are expected to double and surpass $1 billion in revenue within 3-5 years.

Market trends and financial outlook

• Labor market has stabilized, with wage increases normalizing to 3%-5% at the mid and upper levels.

• RPO business, after a pandemic-driven boom, is expected to double in 2-4 years, with high win rates and durable revenue.

• Executive search is a mature, low- to mid-single-digit growth market, but provides a strong platform for cross-selling.

• Professional/interim search is a massive, high-growth opportunity, targeted to reach $1 billion in 3-5 years.

• Margin targets are 16%-18%, with potential upside from digital growth and productivity gains.