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View All NewsKorn Ferry executive search revenue falls 5%; withholds Q4 guidance citing Covid-19
Korn Ferry (NYSE: KFY) reported executive search revenue fell 5% in its fiscal third quarter ended Jan. 31 while total revenue still rose 8.6% thanks to acquisitions and its RPO and professional search operations. The Los Angeles-based company also withheld issuing guidance for the fiscal fourth quarter citing the unknown impact of Covid-19.
“The measures taken to date will most certainly impact our business for the fiscal fourth quarter and potentially beyond,” the company stated, “and due to the rapidly changing nature of this crisis, combined with the lack of visibility with respect to further measures to be taken, it is too difficult for us to accurately assess and quantify the impact at this point.”
| (US$ thousands) | Q3 2020 | Q3 2020 | % change | % change (constant currency) |
| Fee revenue | $515,325 | $474,504 | 8.6% | 9.4% |
| Reimbursed expenses | $12,654 | $11,668 | 8.5% | |
| Total revenue | $527,979 | $486,172 | 8.6% | |
| Net income | $20,956 | $45,444 | -53.9% |
Net income fell 53.9% with Korn Ferry noting $18.1 million in restructuring charges during the third quarter ended Jan. 31.
Fee revenue by segment
| (US$ thousands) | Q3 2020 | Q3 2020 | % change | % change (constant currency) |
| Total executive search | $183,561 | $193,396 | -5.1% | -5% |
| Digital | $99,389 | $62,473 | 59.1% | 61% |
| Consulting | $140,525 | $139,029 | 1.1% | 2% |
| RPO and professional search | $91,850 | $79,606 | 15.4% | 16% |
While revenue fell 5.1% in executive search, digital revenue jumped. Digital is a new reporting segment for Korn Ferry; the increase in revenue was driven by the acquisitions of Miller Heiman Group, AchieveForum and Strategy Execution in the quarter.
Executive search fee revenue by geography
| (US$ thousands) | Q3 2020 | Q3 2020 | % change |
| North America | $106,888 | $114,215 | -6.4% |
| Europe, the Middle East and Africa | $44,301 | $45,940 | -3.6% |
| Asia Pacific | $25,089 | $25,687 | -2.3% |
| Latin America | $7,283 | $7,554 | -3.6% |
Share price and market cap
Shares in Korn Ferry were down 12.74% to $27.54 as of 12:03 p.m. Eastern time; the company had a market cap of $1.74 billion, according to FT.com.