$KFY reports Q3 revenue decline with growth in consulting and caution in forward-looking statements.
Mar 8th 2023, 11:51 am
Analyst Summary: Korn Ferry, a global organizational consulting firm, reported its financial results for Q3 of FY'23. The company's fee revenue decreased in Executive Search and Professional Search, primarily due to the decline in demand for products and services caused by the global economic factors. On a positive note, the consulting segment saw growth in Performance Management, Leadership Development Programs, Organizational Effectiveness, ESG, and Reward Implementation. Subscription-based revenue remained steady with growth in sales effectiveness tools, but there was a decline in service delivery supporting content and usage of assessment tools, particularly in the tech industry aligned with the industry's recent scaling back of employees. Gary D. Burnison, CEO of Korn Ferry, stated, "We will continue to prioritize faster-growing, more significant addressable, less cyclical markets that set up our firm and our clients for success. Korn Ferry is incredibly well-positioned as clients continue to navigate an economy in transition." The company also announced a quarterly dividend of $0.15 per share on March 7, 2023, payable on April 14, 2023. Additionally, Korn Ferry reported on the interim segment in Q4 FY'23, which showed a decrease in Adjusted EBITDA due to compensation and benefits expense driven by an increase in headcount associated with recent new business wins and wage inflation, and higher general and administrative expenses, partially offset by an increase in fee revenue. Korn Ferry's forward-looking statements indicate caution in predicting future results due to a number of risks and uncertainties, including changes in competition, global economic conditions, the impact of the pandemic, and U.S. and foreign legislation.