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Korn Ferry -2.4% on weak margins

Dec. 06, 2019 10:21 AM ETKFYBy: Pranav Ghumatkar, SA News Editor
  • Korn Ferry (KFY -2.4%) reports Q2 total revenue of $504.2M (-0.5% Y/Y) & 1% increase on a constant currency basis, the decrease in fee revenue was due to lower fee revenue.
  • Sales by segment: Executive Search: $192M (-5% Y/Y); Advisory: $213.9M (-3.6%); RPO & Professional Search: $98.9M (+17.9%).
  • Operating margin by segment: Executive Search declined 410 bps to 21.9%; Advisory declined 10 bps to 13.5% & RPO & Professional Search increased 30 bps to 15.9%.
  • Adj. EBITDA margin by segment: Executive Search declined 150 bps to 23.4%; Advisory declined 60 bps to 17.6% & RPO & Professional Search increased 60 bps to 17%.
  • Total margins: Operating declined 170 bps to 12.6%; EBITDA declined 30 bps to 15.4% & Adj. EBITDA also decreased 30 bps to 15.9%.
  • The Company continued with its balanced approach to capital allocation, buying back 1.3M of stock or $49.2M of stock during the quarter.
  • Also declared a quarterly dividend of $0.10/share payable on Jan. 15, 2020.
  • Q3 2020 Outlook: Fee revenue expected to be ~$490-510M; GAAP EPS of ~$0.35-$0.52 and Non-GAAP EPS of $0.70-0.78.
  • Previously: Korn/Ferry declares $0.10 dividend (Dec. 05 2019)
  • Previously: Korn/Ferry EPS in-line, beats on revenue (Dec. 05 2019)

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