Korn Ferry’s royalty revenue increases 29.9% in the fourth quarter of the fiscal year, growth across all lines of business

June 22, 2022

Korn Ferry’s (NYSE: KFY) commission revenue increased 29.9% year-over-year during the company’s fourth fiscal quarter ended April 30. acquisitions of the Lucas group and the Patina Solutions group.

(in thousands of dollars) Q4 2022 Q4 2021 % change % constant currency
Fee receipts $721,139 $555,151 29.9% 33%
Expenses reimbursed $5,864 $2,243 161.4%
Total income $727,003 $557,394 30.4%
Net revenue $93,059 $66,751 39.4%

CEO Gary Burnison said he was pleased with Korn Ferry‘s results and noted that skilled labor shortages are predicted for years to come, regardless of economic activity.

“The world and our customers have entered a new reality – a transitional era of Covid in which there will be a competition not only for growth, but also for relevance and profitability,” Burnison said.

Royalty revenue by segment

(in thousands of dollars) Q4 2022 Q4 2021 % change % constant currency
Consultant $173,944 $153,573 13.3% 16%
Digital $89,521 $80,499 11.2% 15%
Total executive search $244,199 $200,728 21.7% 23%
RPO and professional research $213,475 $120,351 77.4% 81%

Executive search revenue growth was driven by an increase in new search engagements and an increase in average fee-per-search revenue. Growth occurred in all regions with the largest increase in North America.

The board’s revenue growth was driven by “significant client workforce transformation initiatives” which included diversity, equity and inclusion as well as environmental and social governance initiatives.

Commission revenue from Korn Ferry’s “digital” segment reflected growth in total rewards and leadership development offerings.

In the RPO and Professional Search segment, RPO revenue increased 43% and Professional Search commission revenue increased 142%, driven by acquisition momentum. Professional research engagements also increased, and the weighted average fee charged per engagement also increased, the company said.

Korn Ferry said it completed its acquisition of Patina Solutions in the fourth quarter.

Executive Recruitment Fee Revenue by Geography

(in thousands of dollars) Q4 2022 Q4 2021 % change
North America $156,232 $130,790 19.5%
Europe, Middle East and Africa $49,502 $41,253 20.0%
Asia Pacific $30,211 $23,604 28.0%
Latin America $8,254 $5,081 62.4%

Fourth quarter net income increased 39.4%.

Annual results

(in thousands of dollars) FISCAL YEAR 2022 FISCAL YEAR 2021 % change % constant currency
Fee receipts $2,626,718 $1,810,047 45.1% 45%
Expenses reimbursed $16,737 $9,899 69.1%
Total income $2,643,455 $1,819,946 45.2%
Net revenue $330,845 $115,562 186.3%

Tips

Korn Ferry expects royalty revenue of between $680 million and $710 million for the first fiscal quarter.

Stock price and market capitalization

Korn Ferry shares rose 4.94% to $56.50 at 12:37 p.m. EST; they were 10.62% above their 52-week low, according to FT.com. The company had a market cap of $2.90 billion.

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