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Korn Ferry Q4 fee revenue rises 13% in constant currency

June 13 2018

Korn Ferry International Inc. (NYSE: KFY) reported total fee revenue rose 12.7% in constant currency in its fiscal fourth quarter ended April 30. The increase on a reported basis was 17.1%. The Los Angeles-based provider of executive search and consulting reported the organic growth was driven by all three lines of business.

(US$ thousands) Q4 2018 Q4 2017 % change % change (constant currency)
Fee revenue $475,364 $406,065 17.1% 12.7%
Net income $41,160 $26,924 52.9%  
  • Executive search fee revenue rose 13.9% on a constant currency basis to $190.7 million. The overall increase in fee revenue was attributable to higher fee revenue in all regions.
  • Hay Group fee revenue rose 7.3% in constant currency to $207.6 million, primarily driven by a $16.9 million increase in consulting services with the remaining increase of $5.6 million generated by the products business.
  • Fee revenue at Futurestep rose 26.7% in constant currency to $77.1 million. The higher fee revenue was driven by year-over-year increases in recruitment process outsourcing and professional search of $11.0 million and $8.0 million, respectively.

Fee revenue by segment

(US$ thousands) Q4 2018 Q4 2017 % change % growth (constant currency)
Total executive search $190,669 $162,266 17.5% 13.9%
Hay Group $207,551 $185,100 12.1% 7.3%
Futurestep $77,144 $58,699 31.4% 26.7%

Executive search fee revenue by geography

(US$ thousands) Q4 2018 Q4 2017 % change
Executive search      
North America $112,005 $97,264 15.2%
Europe, the Middle East and Africa $45,476 $37,210 22.2%
Asia Pacific $24,612 $20,061 22.7%
Latin America $8,576 $7,731 10.9%

Full-year results

(US$ thousands) FY 2018 FY 2017 % growth
Fee revenue  $1,767,217 $1,565,521 12.9%
Net income $133,799 $84,181 58.9%

Guidance

Korn Ferry expects fourth-quarter fee revenue to range between $450 million and $470 million.

Share price and market cap

Shares in Korn Ferry rose 12.83% to $63.78 as of 12:43 p.m. Eastern time today. The company had a market cap of $3.62 billion.

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