Quarterly report pursuant to Section 13 or 15(d)

Segments

v3.21.2
Segments
3 Months Ended
Jul. 31, 2021
Segment Reporting [Abstract]  
Segments

11. Segments

The Company has seven reportable segments: Consulting, Digital, Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific, Executive Search Latin America and RPO & Professional Search. Revenues are directly attributed to a reportable segment and expenses not directly associated with a specific segment are allocated based on the most relevant measures applicable, including revenues, headcount and other factors.

The Company’s seven reportable segments operate through the following four lines of business:

 

1.

Consulting aligns organization structure, culture, performance and people to drive sustainable growth by addressing four fundamental needs: Organizational Strategy, Assessment and Succession, Leadership and Professional

 

Development and Total Rewards. This work is supported by a comprehensive range of some of the world’s leading lP and data.

 

 

2.

Digital leverages an artificial intelligence powered, machine-learning platform to identify structure, roles, capabilities and behaviors needed to drive business forward. This end-to-end system combines Korn Ferry proprietary data, client data, and external market data to generate insight and recommend action.

 

 

3.

Executive Search helps organizations recruit board level, chief executive and other senior executive and general management talent. Behavioral interviewing and proprietary assessments are used to determine ideal organizational fit, and salary benchmarking builds appropriate frameworks for compensation and retention.

 

 

4.

RPO & Professional Search combines people, process expertise and IP-enabled technology to deliver enterprise talent acquisition solutions to clients. Transaction sizes range from single professional searches to team, department and line of business projects, and global outsource recruiting solutions.

 

Executive Search is managed by geographic regional leaders. Worldwide operations for Consulting, Digital, and RPO & Professional Search are managed by their Chief Executive Officers. The Executive Search geographic regional leaders and the Chief Executive Officers of Consulting, Digital, and RPO & Professional Search report directly to the Chief Executive Officer of the Company. The Company also operates Corporate to record global expenses.

The Company evaluates performance and allocates resources based on the Company’s chief operating decision maker (“CODM”) review of 1) fee revenue and 2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such costs or charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other impairment charges). The CODM is not provided asset information by reportable segment.

Financial highlights by reportable segments are as follows:

 

 

 

Three Months Ended July 31, 2021

 

 

 

 

 

 

 

 

 

 

 

Executive Search

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

Digital

 

 

North

America

 

 

EMEA

 

 

Asia Pacific

 

 

Latin

America

 

 

Subtotal

 

 

RPO &

Professional

Search

 

 

Corporate

 

 

Consolidated

 

 

 

(in thousands)

 

Fee revenue

 

$

148,478

 

 

$

80,671

 

 

$

138,678

 

 

$

42,747

 

 

$

28,703

 

 

$

6,776

 

 

$

216,904

 

 

$

139,342

 

 

$

 

 

$

585,395

 

Total revenue

 

$

149,007

 

 

$

80,681

 

 

$

139,300

 

 

$

42,843

 

 

$

28,732

 

 

$

6,779

 

 

$

217,654

 

 

$

140,756

 

 

$

 

 

$

588,098

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Korn Ferry

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

74,823

 

Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,574

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,447

)

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,426

 

Income tax provision

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23,879

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

101,255

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,644

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,447

 

Adjusted EBITDA(1)

 

$

26,841

 

 

$

25,632

 

 

$

43,330

 

 

$

7,585

 

 

$

8,320

 

 

$

2,354

 

 

$

61,589

 

 

$

33,967

 

 

$

(26,683

)

 

$

121,346

 

 

(1)

Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization.

 

 

 

 

Three Months Ended July 31, 2020

 

 

 

 

 

 

 

 

 

 

 

Executive Search

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

Digital

 

 

North

America

 

 

EMEA

 

 

Asia Pacific

 

 

Latin

America

 

 

Subtotal

 

 

RPO &

Professional

Search

 

 

Corporate

 

 

Consolidated

 

 

 

(in thousands)

 

Fee revenue

 

$

99,318

 

 

$

55,973

 

 

$

69,315

 

 

$

30,081

 

 

$

17,252

 

 

$

3,495

 

 

$

120,143

 

 

$

68,663

 

 

$

 

 

$

344,097

 

Total revenue

 

$

99,590

 

 

$

56,022

 

 

$

69,856

 

 

$

30,195

 

 

$

17,340

 

 

$

3,495

 

 

$

120,886

 

 

$

70,385

 

 

$

 

 

$

346,883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to Korn Ferry

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(30,833

)

Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22

)

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,162

)

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,894

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,672

)

Operating loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

(43,795

)

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,035

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,162

 

Integration/acquisition costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

737

 

Restructuring charges, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,487

 

Adjusted EBITDA(1)

 

$

6,604

 

 

$

7,943

 

 

$

5,312

 

 

$

1,710

 

 

$

1,594

 

 

$

(562

)

 

$

8,054

 

 

$

6,024

 

 

$

(17,999

)

 

$

10,626

 

 

(1)

Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization and further excludes integration/acquisition and net restructuring charges.