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01/10 02:02
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows strong financial performance with a 4% revenue growth, a 5% EPS growth, and a dividend increase, indicating positive shareholder returns. Despite some concerns about regulatory issues and economic challenges, the company has a solid strategy, evidenced by increased consultant productivity and international growth. The Q&A session reveals optimism about business trends and a focus on innovation. Given the company's market cap, the positive financial metrics and optimistic guidance are likely to result in a positive stock price movement of 2% to 8% over the next two weeks.
Consolidated Fee Revenue $712 million, growing 4% year-over-year at constant currency.
Adjusted EBITDA $121 million, grew 8% year-over-year.
Adjusted EBITDA Margin 17%, grew 70 basis points year-over-year.
Adjusted Diluted Earnings Per Share $1.32, grew 5% year-over-year.
New Business Growth 3% year-over-year, including RPO; 5% year-over-year excluding RPO.
Estimated Remaining Fees Under Existing Contracts $1.7 billion, up 12% year-over-year.
Fee Revenue in the Americas Essentially flat year-over-year at constant currency.
Fee Revenue in EMEA Grew 9% year-over-year at constant currency.
Fee Revenue in APAC Grew 8% year-over-year at constant currency.
Shareholder Returns $173 million returned to shareholders through combined share repurchases and dividends.
M&A Investment $44 million invested in M&A.
Capital Expenditures $62 million invested in technology platforms and product enhancements.
Talent Suite Product Releases: Completed the fourth product release of the talent suite in the last year, enhancing organizational and talent products.
Fee Revenue Growth: Consolidated fee revenue was $712 million, growing 4% year-over-year at constant currency.
New Business Growth: New Business grew 3% year-over-year, with RPO growing 5% year-over-year excluding RPO.
Geographic Fee Revenue: EMEA fee revenue grew 9% year-over-year, APAC fee revenue grew 8% year-over-year, while Americas was flat.
Adjusted EBITDA Growth: Adjusted EBITDA grew 8% to $121 million, with an adjusted EBITDA margin increase of 70 basis points to 17%.
Client Engagement: 77% of clients use 2 or more solutions, with 39% of fee revenue from marquee and diamond accounts.
Investment in Technology and Talent Suite: Invested $62 million in capital expenditures focused on talent suite and technology platforms.
Client-Centric Strategy: Continued focus on client service and operational excellence, with a balanced approach to capital allocation.
Forward-Looking Statements: Investors are cautioned not to place undue reliance on forward-looking statements due to risks and uncertainties beyond the company's control.
Economic Environment: The company acknowledges operating in a difficult economic environment, which may impact future performance.
Geopolitical Conditions: The outlook for the first quarter of fiscal '26 assumes no further changes in worldwide geopolitical conditions, which could pose risks to revenue.
Regulatory Issues: The company mentions potential regulatory issues as a risk factor, although specifics are not detailed in the call.
Supply Chain Challenges: While not explicitly mentioned, the overall economic environment suggests potential supply chain challenges that could affect operations.
Competitive Pressures: The company is aware of universal demand for talent, indicating competitive pressures in fulfilling client needs across industries.
Strategic Initiatives: Korn Ferry's strategy is focused on innovation, technology, and AI to enhance organizational performance for clients. The company aims to bundle services and intellectual property (IP) to deepen client relationships.
Client Engagements: The company is engaged in transformative projects with leading industrial and financial services companies, helping them build a data-rich foundation for future talent pipelines.
Investment in Talent: Korn Ferry has increased its senior client partner population by approximately 25 net new hires to enhance commercial capacity.
Product Development: The company completed the fourth product release of its talent suite in the last year, enhancing its organizational and talent products.
Data Utilization: Korn Ferry possesses extensive data resources, including billions of data points and assessments, which it intends to license for knowledge transfer.
Revenue Expectations: For Q1 FY26, Korn Ferry expects fee revenue to range from $675 million to $695 million.
Adjusted EBITDA Margin: The adjusted EBITDA margin for Q1 FY26 is expected to range from approximately 16.8% to 17.2%.
Earnings Per Share: Consolidated adjusted diluted earnings per share for Q1 FY26 is expected to range from $1.18 to $1.26.
GAAP Earnings Per Share: GAAP diluted earnings per share for Q1 FY26 is expected to range from $1.16 to $1.24.
Remaining Fees Under Contracts: Estimated remaining fees under existing contracts total approximately $1.7 billion, with $977 million expected to be recognized as fees within the next year.
Dividend Increase: Raised dividend 6 times in five years.
Shareholder Returns: Returned $173 million to shareholders through combined share repurchases and dividends.
The earnings call highlights strong financial metrics, with notable growth in consulting and executive search, as well as a successful launch of the Talent Suite platform. The company's strategic shift towards higher-value engagements and increased referrals are positive indicators. Despite some challenges, like a decline in the digital side, the overall sentiment is optimistic. The market cap suggests moderate volatility, leading to a positive stock price movement prediction.
The earnings call reflects a positive sentiment with strong financial performance in EMEA and APAC, a significant shareholder return, and strategic investments in AI and talent. Despite conservative guidance and economic challenges in the Americas, optimism in Europe and Asia, along with transformational projects and capacity for demand upticks, contribute positively. The focus on integrated solutions and AI's potential adds to the positive outlook, outweighing minor uncertainties and guidance conservatism. The market cap suggests moderate volatility, supporting a positive stock price movement prediction.
The earnings call shows strong financial performance with a 4% revenue growth, a 5% EPS growth, and a dividend increase, indicating positive shareholder returns. Despite some concerns about regulatory issues and economic challenges, the company has a solid strategy, evidenced by increased consultant productivity and international growth. The Q&A session reveals optimism about business trends and a focus on innovation. Given the company's market cap, the positive financial metrics and optimistic guidance are likely to result in a positive stock price movement of 2% to 8% over the next two weeks.
The earnings call presents strong financial performance with increased EPS, revenue, and margins across various segments, alongside a substantial shareholder return plan including dividends and share repurchases. The Q&A highlights successful productivity strategies and strong new business growth, despite some challenges in the digital segment. The positive outlook, especially in executive search, and a commitment to margin expansion suggest a likely stock price increase. Given the market cap of $3.43 billion, a positive reaction of 2% to 8% is anticipated.
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