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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.
