Korn Ferry Reports 2023 Q2 Net Income of $46.6 Million
Total Revenue Reaches $706.3 Million for the Quarter
Korn Ferry,(KFY) a leading global organizational consulting firm, has released its financial results for the second quarter of 2023. The company reported a net income of $46.6 million for the quarter, alongside total revenue of $706.3 million. These figures provide insights into the firm's performance, shedding light on its profitability and revenue generation during this period.
Revenue and Expenses Overview
In the second quarter of 2023, Korn Ferry's fee revenue amounted to $699.2 million, a slight increase from the $695.9 million recorded during the same period in 2022. This demonstrates the company's ability to maintain steady revenue streams.
While the fee revenue remained stable, the company reported $7.1 million in reimbursed out-of-pocket engagement expenses for both 2023 and 2022. The total revenue for the quarter reached $706.3 million, indicating a 0.4% growth compared to the previous year.
However, operating expenses also experienced an uptick. Compensation and benefits for the quarter amounted to $479.9 million, up from $465.6 million in 2022. General and administrative expenses increased to $65.9 million, compared to $64.5 million in the previous year. Depreciation and amortization costs also rose to $19.0 million, compared to $16.2 million in 2022. These expenses collectively contributed to total operating expenses of $649.5 million for the quarter.
Net Income and Earnings per Share
Korn Ferry reported a net income of $47.2 million for the second quarter of 2023, which was notably lower than the $78.5 million reported in the same period in 2022. This decrease in net income reflects the impact of increased operating expenses and other factors affecting the company's profitability.
Earnings per common share attributable to Korn Ferry also saw a decline. The basic earnings per share were reported at $0.89 in 2023 compared to $1.46 in 2022, while diluted earnings per share were $0.89 and $1.45, respectively.
Revenue by Reporting Segment
Korn Ferry's financial performance by reporting segment showed varying results. Consulting fee revenue increased by 1.0% to $168.1 million. The Digital segment reported $88.0 million in fee revenue, reflecting a 5.0% growth.
In contrast, the Executive Search segment faced challenges, with North America, EMEA, Asia Pacific, and Latin America all experiencing decreases in fee revenue, resulting in a total Executive Search revenue decline of 11.8%. The Professional Search & Interim segment, on the other hand, showed robust growth, with fee revenue totaling $142.2 million, a 43.7% increase. RPO (Recruitment Process Outsourcing) reported fee revenue of $95.7 million, down by 16.0%.
Balance Sheet and Equity
Korn Ferry's consolidated balance sheets for July 31, 2023, indicate that the company holds assets totaling $3.31 billion. This includes cash and cash equivalents of $562.2 million, marketable securities of $29.5 million, and receivables due from clients amounting to $592.3 million. The company's stockholders' equity stood at $1.69 billion, with common stock, retained earnings, and other comprehensive loss contributing to this figure.
Non-GAAP Financial Measures
Korn Ferry also provided a reconciliation of GAAP to non-GAAP financial measures for the second quarter of 2023. The company reported an adjusted EBITDA of $95.7 million, with an adjusted EBITDA margin of 13.7%. Adjusted net income attributable to Korn Ferry was $51.5 million, resulting in adjusted basic earnings per share of $0.99 and adjusted diluted earnings per share of $0.99.
Korn Ferry's financial results for the second quarter of 2023 demonstrate its ability to maintain stable revenue streams despite challenges in some reporting segments. The company continues to navigate the evolving landscape of organizational consulting and recruitment, with a focus on delivering value to its clients and shareholders.
