Quarterly report pursuant to Section 13 or 15(d)

Segments

v3.23.2
Segments
 3 Months Ended
Jul. 31, 2023
Segment Reporting [Abstract]  
Segments SegmentsThe Company has eight reportable segments: Consulting, Digital, Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific, Executive Search Latin America, Professional Search & Interim and RPO.
The Company’s eight reportable segments operate through the following five lines of business:
1.Consulting aligns organizational 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 enabled by a set of Digital Performance Management Tools, based on some of the world’s leading lP and data. The Consulting teams employ an integrated approach across our core capabilities and integrated solutions, each one intended to strengthen the work and thinking in the next, to help clients execute their strategy in a digitally enabled world.
2.Digital develops technology-enabled Performance Management Tools that empower our clients. The digital products give clients direct access to Korn Ferry proprietary data, client data, and analytics to deliver clear insights with the training and tools needed to align organizational structure with business strategy.
3.Executive Search helps organizations recruit board level, chief executive and other senior executive and general management talent to deliver lasting impact. The Company’s approach to placing talent is bringing together research-based IP, proprietary assessments and behavioral interviewing with practical experience to determine the ideal organizational fit. Salary benchmarking then helps the Company build appropriate frameworks for compensation and retention. This business is managed and reported on a geographic basis and represents four of the Company’s reportable segments (Executive Search North America, Executive Search EMEA, Executive Search Asia Pacific, and Executive Search Latin America).
4.Professional Search & Interim delivers enterprise talent acquisition solutions for professional level middle and upper management. The Company helps clients source high-quality candidates at speed and scale globally, covering single-hire to multi-hire permanent placements and interim contractors.
5.RPO offers scalable recruitment outsourcing solutions leveraging customized technology and talent insights. The Company's scalable solutions, built on science and powered by best-in-class technology and consulting expertise, enables the Company to act as a strategic partner in clients’ quest for superior recruitment outcomes and better candidate fit.
Executive Search is managed by geographic regional leaders. Worldwide operations for Consulting, Digital, Professional Search & Interim and RPO are managed by their Chief Executive Officers. Beginning in the second quarter of fiscal 2024, Digital will be led by the President of Technology. The Executive Search geographic regional leaders and the Chief Executive Officers of Consulting, Professional Search & Interim and RPO and the President of Technology 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 are as follows:
Three Months Ended July 31,
2023 2022
Consolidated
(in thousands)
Fee revenue $ 699,189  $ 695,903 
Total revenue $ 706,262  $ 703,148 
   
Net income attributable to Korn Ferry $ 46,605  $ 77,247 
Net income attributable to noncontrolling interest 580  1,289 
Other income, net (13,577) (775)
Interest expense, net 4,740  7,612 
Income tax provision 18,420  26,226 
Operating income 56,768  111,599 
Depreciation and amortization 19,012  16,229 
Other income, net 13,577  775 
Integration/acquisition costs 4,128  3,605 
Impairment of fixed assets 123  — 
Impairment of right-of-use assets 1,629  — 
Restructuring charges, net 421  — 
Adjusted EBITDA(1)
$ 95,658  $ 132,208 
___________________
(1)
 Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization, further excludes integration/acquisition costs, impairment of fixed assets, impairment of right-of-use assets, and restructuring charges, net when applicable.
Financial highlights by reportable segments are as follows:
Three Months Ended July 31,
2023 2022
Fee revenue Total revenue Adjusted EBITDA Fee revenue Total revenue Adjusted EBITDA
(in thousands)
Consulting $ 168,088  $ 170,793  $ 25,180  $ 166,484  $ 168,735  $ 29,550 
Digital 87,986  88,012  24,325  83,761  83,815  24,178 
Executive Search:            
North America 127,498  129,413  28,756  151,544  152,884  43,749 
EMEA 46,776  47,135  5,638  47,056  47,329  8,515 
Asia Pacific 24,539  24,610  6,315  26,381  26,452  7,351 
Latin America 6,421  6,422  1,741  7,808  7,809  2,617 
Professional Search & Interim 142,179  143,069  24,329  98,947  100,052  29,161 
RPO 95,702  96,808  10,471  113,922  116,072  17,709 
Corporate —  —  (31,097) —  —  (30,622)
Consolidated $ 699,189  $ 706,262  $ 95,658  $ 695,903  $ 703,148  $ 132,208