Korn Ferry (NYSE: KFY) stock lost over 20.8% on 21st June, 2019 (as of 9:52 am GMT-4; Source: Google finance) though the company posted lower than expected results for both topline and bottom-line.
At the end of the fourth quarter, total cash and marketable securities were $767 million, up approximately $109 million compared to the fourth quarter of FY18. KFY had ended the year with outstanding debt of about $223 million. Net income attributable to Korn Ferry was $50.3 million in Q4 FY19 as compared to $41.2 million in Q4 FY18.
KFY in the fourth quarter of FY 19 has reported the adjusted earnings per share of 88 cents, missing the analysts’ estimates for the adjusted earnings per share of 89 cents, as per Zacks Investment Research. The company had reported the adjusted revenue growth of 35.9 percent to $490.8 million in the fourth quarter of FY 19, missing the analysts’ estimates for revenue of $495.2 million.
Fee revenue in the fourth quarter grew by about 8% to $491 million at constant currency. As in recent quarters, growth in the fourth quarter was broad-based with each of the operating segments improving. Exec Search grew 3%, Advisory grew 5%, and RPO and Pro Search grew 25%, on year-over-year all measured at constant currency. Adjusted EBITDA in the fourth quarter grew to $82.2 million, which is a year-over-year improvement of 9%, while the adjusted EBITDA margin improved 80 basis points year-over-year to 16.7%. Globally, Executive Search new business in the fourth quarter was approximately $200 million and that was up 4% year-over-year, on the back of the growth in North America, Europe and Asia Pac. New business in the fourth quarter for Advisory was $219 million, up approximately 2% measured at constant currency. North America was up 1.7%, Europe was up 7.2%. Asia Pac was up 4.6%, and Latin America was up 2%. In the fourth quarter, RPO and Professional Search achieved another strong quarter of new business with total awards of $84 million, which includes about $50 million of long-term recruitment outsourced contracts. The $50 million of RPO awards consist of about $6 million from expansions and renewals and those are with existing clients and approximately $44 million of new client contracts.
For the first quarter of FY 20, KFY expects fee revenue to be in the range of $466 million and $486 million, and diluted earnings per share is projected to range between $0.73 to $0.81.