Korn Ferry Reports 34% Increase in Net Income, 11.3% Operating Margin in Q2 2024

Korn Ferry reported its financial results for the three months ended July 31, 2024, revealing a total revenue of $682.8 million, a decrease from $706.3 million in the same period of 2023. The decline in revenue was primarily attributed to a 3% drop in fee revenue, which totaled $674.9 million compared to $699.2 million in the prior year. Despite the revenue decrease, Korn Ferry experienced an increase in profitability, with net income attributable to the company rising to $62.6 million, up from $46.6 million in the previous year, marking a 34% increase. This resulted in earnings per share of $1.19, compared to $0.89 in the same period last year.

Operating income also improved, reaching $76.1 million, up from $56.8 million in the prior year, reflecting an operating margin increase to 11.3% from 8.1%. Adjusted EBITDA for the quarter was reported at $111.2 million, a significant increase from $95.7 million in the same quarter of 2023, with an adjusted EBITDA margin of 16.5%, up from 13.7%.

Korn Ferry's cash and cash equivalents decreased to $633.4 million as of July 31, 2024, down from $941.0 million at the end of April 2024. Total current assets also fell to $1.4 billion from $1.7 billion in the previous quarter. However, total stockholders' equity increased to $1.8 billion, up from $1.7 billion, driven by retained earnings growth.

The company reported a decrease in total operating expenses to $606.7 million from $649.5 million in the same period last year, contributing to the improved operating income. Notably, compensation and benefits expenses decreased by 6% to $451.8 million, while general and administrative expenses also saw a decline.

Korn Ferry's strategic focus remains on enhancing its core solutions, which include organizational strategy, assessment and succession, leadership development, total rewards, and talent acquisition. The company continues to leverage its data-driven approach to improve service offerings and client outcomes.

In terms of capital management, Korn Ferry increased its quarterly dividend to $0.37 per share, reflecting a commitment to returning value to shareholders. The company repurchased approximately $23.5 million of its stock during the quarter, compared to $4.2 million in the same period last year, indicating a proactive approach to managing its capital structure.

Overall, Korn Ferry's financial performance for the quarter demonstrates resilience amid revenue challenges, with significant improvements in profitability and operational efficiency.