Korn Ferry (KFY) Q4 2024 earnings summary

Executive summary

• Q4 and FY24 delivered strong earnings and profitability, with adjusted EBITDA margin at 16.3% and revenue 35%-40% above pre-pandemic levels, despite a 5% year-over-year decline in Q4 fee revenue.

• Diversified offerings, especially consulting and digital, provided stability and growth, offsetting softness in talent acquisition.

• Marquee and Regional Accounts represented over 37% of total fee revenue, growing 3% year-over-year.

• Cross-line of business referrals accounted for 26% of total fee revenue at year-end, supporting revenue stability.

• The business remains highly diversified across lines of business, geography, and industry.

Financial highlights

• Q4 FY24 fee revenue was $691 million, at the upper end of guidance, but down 5% year-over-year; full year fee revenue was $2,762.7 million, down 3% year-over-year.

• Adjusted EBITDA for Q4 was $112.3 million (16.3% margin), up nearly 300 basis points year-over-year; full year Adjusted EBITDA was $408.2 million (14.8% margin).

• Adjusted fully diluted EPS for Q4 was $1.26, up 25% year-over-year; GAAP EPS was $1.24.

• Net income for Q4 was $65.2 million, up 37% year-over-year; full year net income was $169.2 million.

• Investable cash at quarter-end was $606 million, up 24% year-over-year; cash and equivalents at April 30, 2024, were $941 million.

Outlook and guidance

• Q1 FY25 fee revenue expected between $655 million and $675 million.

• Adjusted EBITDA margin projected at 15.8%-16.2%; adjusted diluted EPS between $1.07-$1.17; GAAP EPS between $1.05-$1.15.

• Consulting and digital expected to be down sequentially in Q1 due to seasonality but stable year-over-year.

• Early signs of improving market demand for permanent placement talent acquisition.

• Talent acquisition services expected to follow normal seasonal patterns.