Korn Ferry : Presentation PDF

FY'24 Q4

Earnings Call

June 13, 2024

Safe Harbor Statement

FORWARD-LOOKING STATEMENTS

Statements in this presentation that relate to goals, strategies, future plans and expectations are based on Korn Ferry's current expectations. You are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from those currently expected because of a number of risks and uncertainties. For a detailed description of many of those

risks and uncertainties, please refer to Korn Ferry's earnings release and its periodic filings with the Securities and Exchange Commission. These statements are also aspirational and not guarantees or promises that goals or targets will be met. The company undertakes no obligation to update any statements, whether as a result of new information, future events or otherwise. In addition, these statements may be based on standards for measuring progress that are still developing and on assumptions that are subject to change in the future.

NON-GAAP FINANCIAL MEASURES

This presentation includes financial information calculated other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Please refer to slides 18 to 24 for a reconciliation of each of the non-GAAP financial measures included in this presentation to the closest GAAP measure.

2

Advancing our Strategy to Become the Preeminent Global Organizational Consultancy

Diversifying offerings into fully integrated, scalable and sustainable client engagements:

Intentional expansion to a comprehensive organizational consultancy is driving less cyclical and more predictable and recurring fee revenue streams with more scalable earnings.

Capitalizing on global leadership in solutions with great relevance today:

Monetizing investments in data, content, and IP. Driving greater Digital subscription engagements and integration with Consulting creates greater differentiation.

Established record of thought leadership and action on burning platform issues such as workforce transformation/digitization, DE & I, and other ESG initiatives provides a competitive edge to support companies as they look to solve their most pressing business issues.

Advancing Korn Ferry as a premier career destination:

Attracting and retaining top talent by investing in initiatives that build a world-class organization aligned to strategy and staffed by a capable, motivated and agile workforce.

Pursuing transformational opportunities at the intersection of talent and strategy:

Proven track record of investing in growth and leveraging a core competency of identifying, acquiring and integrating M&A targets that have the potential to further our strategic objectives and enhance shareholder value.

Driving an integrated go-to-market strategy through our marquee and regional accounts:

Enduring client relationships of scale that deliver larger, more predictable and recurring Revenue through structured, programmatic account planning in combination with strategic investments in account management talent and cross - LOB synergy sales.

3

A Compelling Investment Opportunity, At a Critical Moment, in a Critical Sector

Strong, Durable

Foundation

• Recognized industry leader with
• • 9,500 experts strategically positioned in more than 50 countries
• Value-drivencapital allocation priorities and strong M&A track record
• Proven management team driving a proven business model
• Proprietary IP and data driving an expanding suite of digital capabilities
• Continued investment in commercial colleagues including Marquee and Regional account leaders

Relevant Solutions Aligned

With Macro Trends

• Rapid emergence of remote work and other shifts in Human Capital trends are necessitating organizational realignment
• Investor / Corporate prioritization of Diversity, Equity & Inclusion initiatives
• Investing in Professional Search & Interim Services inline with shift from career employee to career nomad

Poised for

Sustainable Growth

• Focus on durable, scalable Revenue through deeper key client penetration and large integrated solutions that emphasize consulting services and digital subscriptions
• Marquee and Regional account program outperforming the rest of the firm enabled by global account leaders and disciplined account management and planning
• Breadth and connectivity of solutions provides platform for outsized top-line synergies - a key competitive advantage
• Strong cash generation and balance sheet facilitates investments in growth opportunities in large

markets that are currently highly
fragmented and underpenetrated	4

FY'24 Q4 Earnings and Profitability Grew Sharply Both YoY and Sequentially as Revenue Continued to Stabilize with Early Signs of Improving Market Demand for Permanent Talent Acquisition

• Fee Revenue was Seasonally Strong with Stable Consulting and Digital Revenue Complementing Sequentially Improving Demand for Permanent Placement Talent Acquisition (Executive and Professional Search and RPO)
• Adj. EBITDA was Sharply Higher Improving 15% YoY and 10% Sequentially to $112M with an Adj. EBITDA Margin of 16.3% (the Fourth Consecutive Quarter of Profitability Improvement) Driven by Greater Consultant Productivity and Strong Cost Controls
• Adj. Diluted EPS Improved 25% YoY and 18% Sequentially to $1.26

$691M	16.3%
($40M) (5%) YoY	Adj. EBITDA Margin %(1)
Fee Revenue	(Non-GAAP)
+290 Basis Points YoY ; +110 Basis Points
	Sequentially

$112M	$1.26
+$14M +15% YoY	+0.25 +25% YoY
Adj. EBITDA(1)	Adj. Diluted EPS(2)
(Non-GAAP)	(Non-GAAP)

See detailed explanation of footnotes on page 16

5

Business Continues to be Highly Diversified Across Lines of Business, Geography and Industry

For the fourth quarter of FY'24

Fee Revenue by Lines of Business

Fee Revenue by Geography

Fee Revenue by Industry

19%

29%

13%

12%

3%

7% 13%

15%

18%

13% 26%

Executive Search		Digital
Consulting		RPO

Professional Search & Interim

28%57%

NAM APAC

EMEA LATM

18%

29%

Consumer		Industrial
Financial Services		Life Sci. / HC
Tech.		Edu. / Non-Profit

6

Diversified Mix of Revenue & Earnings ($M)

Consolidated Adj. EBITDA(3) up Both YoY and Sequentially Driven by Strong Cost Management

	FY'23 QTR. 4		FY'24 QTR. 3
100%	$731	$127(3)	100%	$669	$132(3)
$91		$90
90%	$24	90%	$27
80%	$152		80%	$131
70%	$27	70%	$24
60%	$100	$9	60%	$81	$9
50%		50%
	$25		$28
40%	$175	40%	$167
30%			30%
20%	$213	$43	20%	$199	$43
10%	10%
0%	Fee Revenue	Adj. EBITDA(1)	0%	Fee Revenue	Adj. EBITDA(1)
Executive Search	RPO	Executive Search	RPO
Consulting	Professional Search	Consulting	Professional Search
Digital	& Interim	Digital		& Interim

	FY'24 QTR. 4
100%	$691	$146(3)
$91
90%	$28
80%	$129
70%	$28
60%	$89	$12
50%
40%	$182	$32
30%
20%	$199	$45
10%
0%

Fee Revenue			Adj. EBITDA(1)
Executive Search			RPO
Consulting			Professional Search
Digital			& Interim

See detailed explanation of footnotes on page 16

7

Quarterly(7) New Business* - YoY Growth (Excluding RPO)

New Business was Relatively Stable YoY Despite Challenges in the Near-Term Economic Outlook

0% 0%

			(2%)
			(3%)
QTR. 3 FY'24			QTR. 4 FY'24
		Constant Currency		Actual F/X Rates
* Confirmations plus upticks and additional placements
See detailed explanation of footnotes on page 16

8

Quarterly(7) New Business* - YoY Growth By Line of Business

(Excluding RPO)

Constant Currency

Actual F/X Rates

Consulting

0%	0%	0%
		(1%)
QTR. 3 FY'24	QTR. 4 FY'24

Executive Search*

1% 1%

(6%) (6%)

QTR. 3 FY'24

QTR. 4 FY'24

* Confirmations plus upticks and additional placements See detailed explanation of footnotes on page 16

Digital

4%

3%

2% 2%

QTR. 3 FY'24

QTR. 4 FY'24

Professional Search & Interim*

9% 9%

	(12%)(12%)
QTR. 3 FY'24	QTR. 4 FY'24

9

Consulting

26% of Fee Revenue and 22% of Adj. EBITDA(1) in FY'24 QTR. 4

FY'24 Fee Revenue = $695M (+3% YoY)

Q4 Fee Revenue

4% YoY

Fee Revenue ($M)

Adj. EBITDA ($M) & Adj. EBITDA(1)

Margin (%) (Non-GAAP)

Consultant + Execution

Staff Productivity

381K 417K

(+5% at CC)

$175

$182

16.7% 17.8%

Hours Worked $438

450K$437

Avg. Bill Rate

Driven by Assessment & Succession +10%, Leadership Development +4% and Organizational Strategy +3%

Bill Rates are +12% YoY and remained steady sequentially

Q4 New Business Flat YoY at CC

and strongest in NAM (+5%) driven by Organizational Strategy and Assessment & Succession wins

Adj. EBITDA(1) & Adj. EBITDA Margin(1) up both YoY and sequentially driven by strong bill rates and greater Consultant and Execution Staff productivity

$167

FY'23 Q4 FY'24 Q3 FY'24 Q4

14.0%$32.3

$27.8

$24.6

FY'23 Q4 FY'24 Q3 FY'24 Q4

Adj. EBITDA(1)

Adj. EBITDA Margin (%)(1)

$390

1,853

1,687 1,678

FY'23 Q4 FY'24 Q3 FY'24 Q4

Consultant + Execution Staff Hours Worked / Average Bill Rate

See detailed explanation of footnotes on page 16

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