KFY - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Korn Ferry Third Quarter Fiscal Year 2020 Conference Call. [Operator Instructions] We've also made available in the Investor Relations section of our website at kornferry.com a copy of the financial presentation that we will be reviewing with you today.

Before I turn the call over to our host, Mr. Gary Burnison, let me first read a cautionary statement to the investors. Certain statements made on the call today, such as those relating to the future performance, plans and goals, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

statements. the reasonable in not assumptions, undue on believes are forward-looking to Company reliance on based investors such the expectations such reflected statements place Although are cautioned materially Actual from because results a risks the are of uncertainties, number periods Company's in may control. of those expected or future currently desired which beyond and differ

the SEC, Additional such quarter risks XXXX. the in the to relating release and report information year and in found for the to for XX, concerning XXXX the this reports filed periodic Company Company's annual by and the filed the report January quarterly including Company's uncertainties can with be presentation fiscal ended be soon in

EBITDA today reference such the financial of comments some Also, may adjusted and EBITDA. currency non-GAAP amounts, measures, as constant

to of presentation release and in are is directly including concerning GAAP comparable information both measure earnings the financial website Relations measures, of these call, contained which Additional the this the the most Company's in section at posted www.kornferry.com. Investor to reconciliations relating financial

I that, go over to the will call Please Burnison. Mr. ahead, Mr. Burnison. turn With

Gary Burnison

and you, good everybody. for joining Thank David, us. Thank Okay. you afternoon,

for time. important is I'm that I'm have uncertain been no captivated crisis you, world, there clearly with the has But Company sure think this comment humanitarian COVID-XX, like it, to set today, that is by uncertain stage an about it's to everybody and around certainly and times, that. navigate do our going doubt the to and through we the ability this about I

solid delivered the million growth, X% was say, end first at January. me in profitability. We the the would $XXX on good. comment quarter finished currency that I very let So fee revenue, quarter constant of

the around really tremendous long-term have own to market acquisitions and that our IP, opportunity. opportunity think learning got take tap recent we've to us dollar a most did really acquisitions, those with development. And I combine and Our added we capability multi-billion

it benefited again we it almost was. would we indicated acquisitions, XX% But the organically recent a X% be $XXX the quarter up business, for thought constant that's quarter, it by ago, up million at currency. currency. That's Digital as was but The constant at

The been whether or around been human strategy Every we really, mark developed Company's and I knowledge, on whether IP. has through develop train that and X this foundation are it has the And performance. organically M&A, been experts million it's has being for it's been professionals. organizational year we think, nearly the bellwether

minutes, organizational on rewards XX data. Every We've XX three hour, We job. we put in assessments. somebody benchmark people. have each done thousands million got million new business of data We've a

and we to I difference between So roles. what's when it difference organizational think comes good you when comes to when between the individual performance, great and good know great - the definitely and it

believe IP our lever is on execution to of richness client an that global powerful capabilities, that is of most with the the organization we firm focused a people opportunity surrounds create So there strategy the our and optimizing people. its and its by $XX which a billion

firm. That competitor. balanced include and our in bigger today, next Consulting coming a revenue would alone than from substantially Search That and much solutions. more $X so got almost And is diversified Executive we've billion Digital

really and assessment succession; breaks you finally, two, learning solutions, when those Consulting look strategy; areas: organizational development; Digital the One benefits. at rewards But and into and - it is down three, four and

have drives more more what a clients on going benefit ultimate revenue this the larger strategy, impact provide think going to goal their streams. most And durable I bigger us, of it's is have markets ultimately potential, that diversification to really for and visible and think are tapping the So addressable I performance. important to

results out business, at driven you And that lines revenue our of would of sales, point referrals working. inside of XX%. is from the other percentage at just that's the the words, strategy look I it's in between or look data, the when when so you

see as goal We a couple when to set higher, I which certainly as have. of that demonstration lot that market one, to ago want now legacy but we of a years it a brands we we going we're think sunsetted the that's

So, industry. I believe an we're redefining

I think superior right we've got solutions know-how of companies data science, help performance. the deliver to

opposes it's let a magnitude the about few so uncertain this of the And of outbreak. the the the secondly, threat me comments human with control meaningful going context, which threat, is there important, and health, is when point, global Obviously, be to it's unknown, the at that that and a to coronavirus. both then most make economy, this

situation So and vigilance continued preparation. this demands

me let be number the The our health continues one done. on to comment of safety So priority first and what colleagues. we've

employees in we've are put established in and meetings, we distancing, with home, travel, our far office social protocols place, visitors, have corporate priority. That that's colleagues. team, So we've we whether we working a emergency daily have from some we've biggest a limited is internal limited number offices, selected of have by communication we my closed

it's stakeholders. three. comprised I of employees, your your to not shareholders, stakeholders question it's customers and And a CEO, you a have of look I just at a shareholders. as are think that a as think your And CEO, all And question of

safe. everything been priority them so colleagues, our And to has first keep and within our doing we're power our

and our platform balance were that assignments, marquee out knowledge-based when of have, many create for actions that I'd Company the also orient that at we And that support program, take to creation Search to actually going that position Korn to could head we I earlier, ago, to to going Digital included the to were we we to those were sheet. program, IP that our execution technology were we told we referenced rebrand we our we going that One the KF point Professional were something the future. account count, monetize activity account start the the we But through regional and our business, platform, the as Ferry moderate of you a look going actions that continuation our would, the months toward going I and strengthen program,

and we've All things of continued those leaders. we've of aggressive the account recruiting with done

in to of spite all presented that clouded near-term our has business. the the uncertainty of us the actions, coronavirus these of So predictability has

new solid, though even call. the up it it year-over-year February get in so, business X% was can was And we and into certainly

across face-to-face In similar what companies, that recent all job actions economic travel, weeks and words, In with seen we've you'd either that. along distancing a These social seen interaction, board limiting cost cutting you and to are selected contraction. eliminations. normal governments other have actions days, we've unlike they group in are seen expect implemented the ours, haven't

or actions to these authoritative such here which are so incremental today, actions put for we And social And sit and measures as in what adopt different. those place the are further time, are unknowns. bodies additional extent substantial distancing

our fourth taken almost So the certainly will beyond. impact and to business fiscal for date, they potentially quarter the measures

to And situation rapidly is - so due the changing fluid.

So just given the of lack accurately just That's to that be taken, too point. to that at and and truth. assess with difficult actions a visibility it's quantify with creates this further the for impact combined respect us to

guidance to issue So consequently, for going to we're guidance. of reassess any suspension we're going fourth revenue our and earnings and specific quarter, our not the

part is Company. that and with outbreak happened look has planning, this late XXXX one of we and just of do that, the the as humanitarian what out back contingency through of comfortable point and passed, always the I and in I'd at just other kind had crisis during we we're that Once thing midpoint SARS XXXX, started

global suggesting about I'm and look When Then two history, our think of back was fee not I look rebounded about at quarters. that it's was to down crisis XXXX, time, middle we it's revenue X% once revenue fee the the that was and helpful analogous, back sharply. in contained over but

was preceding surpassed peak, in was a fact, what it mean, the happened pre-epidemic I immediately quarter. V the the revenue

higher. So it was actually, it was

us difficult, our it's the if was. The predict, current if the - to react today way to world similar the want looking because, so is you size question how four by crisis the to for is is if Chinese world hey, going the today in look just interdependent business news. a And looks there economy is different. no you times it And to at

Ferry different. Korn importantly, is substantially more But

billion. we of $XXX we've just And We've our thing, then financial do so liquidity. now many one no we've Ferry. we were Ferry our XXXX today's back position, we're we comparison Back to did there things. mean of million kind absolutely $X today enhanced and increased increased then, the I Korn the scale, is Korn

by allow trailing and stronger XX% the restructuring maintained what the without in think position revenue will to basis margin any actions taking to near-term a increased financial similar on to So decline withstand that a EBITDA SARS and that XX back we a us experienced way. adjusted scale XX% I significantly

our But are again, to what back really and which three priorities full a things: taking these I anchored approach agility. caution; colleagues. is our we three, balanced that two, think overall think around And I circle, - safety; prices, coming One, is a for

Company And that very agile. think incredibly be important. this part to last And positioned will we've very, I be

for got business been that the is So I than probably Korn think a people the future. business, people I've the today opportunity taken and in drive we've steps, about bullish we've more in Ferry the organizations,

Bob here Gregg. by So, I'm and joined

so, Bob. And I'll over to it turn

Bob Rozek

Great. Thanks, afternoon, good everyone. Gary, and

few going highlights. start I'm with a to

for fee revenue time the another our million So we history. quarterly the quarter, $XXX third reached in milestone our as mark the first in eclipsed

in revenue fee third was about that's X.X% the constant $XXX our up currency. earlier, quarter indicated Gary year-over-year As million, at

which driven KF year-over-year up Growth or our currency. new $XX currency, million primarily was $XX and which segment, quarter million constant Search year-over-year at was at in Professional Digital up RPO the by at or constant and was XX% $XX million XX%

recent with of is of the about the talk rationalization. In positions cost rationalization $XX about facility integration million cost are we bit activity little charges I'll of on base. for savings combined the elimination acquisitions. recorded That third plan the and quarter, associated as the the of the redundant a

happened place reflected third And about because in of quarter, fourth actions of million. expect January, we $X cost took an savings late additional Our savings over fact some base quarter about course quarter. the in of the the million in $X those

talked and our prepared new As And KF within segment the are we've disclosed, remarks. And KF the now recent acquisitions his more components, reported Digital that Greg segment. Advisory provide Digital. the Gary and about KF legacy results some divided will into details two Consulting previously in about, of

a approach maintaining of policy our balanced on execute to to allocation. capital continue We

remaining our now about cash for fiscal of about $XXX $XX million all we have using shares share year Currently, repurchased have through authorization million. today, million 'XX about For X.X our total repurchases. on of we

Additionally, Board April payable our on XXXX dividend a declared March of balance on just share I'll very XXXX. And XX, record to strong. XX, comment, today, finally, XX% remains per our shareholders sheet

investable million end the at cash $XXX of approximately the of quarter. have We third

the third $XX in within little was at going the to to lines a currency. about also X% constant trends bit of trends. up or business now about business. Globally, new quarter We're in business comment new I'm of business differences on new continuing our see million

did If at the you quarter, what X% was Search look down in that Executive year-over-year. third business

business However, about Search new our business was on global XX%. Professional basis, up a their

data we've So the in as see talked the is the again, really points that starting diversification take we in business continue hold. to past to

$XX In $XX was clients, awarded new quarter, million million new new million of call third existing we RPO the clients. and renewals of and $XX of extensions with of business, logos, consisting

Consulting year-over-year, led was up quarter, which was very third America, X% had the - Our in North a new up year-over-year. business X% strong quarter by

also constant currency, Digital at excluding business saw X% by and acquisitions, North increase driven And new America, year-over-year. XX% the recent finally, was then was which year-over-year that a up

bit diluted And fiscal down our quarter to interest third about about part expense quarter net the the XX% of the finally, higher third rate, earnings tax $X.XX, XX.X% in revenue the driven in which change per compared share year-over-year, by quarter $X.XX in was in adjusted and little in X% higher or effective mix, 'XX. our was

to going call review in detail. the to turn more to bit over our a Gregg operating now I'm segments little

Gregg Kvochak

Thanks, Bob. Okay.

in adjusted and $XX third licensing up which in the segment. by quarter Global acquisition. approximately a driven was our Starting million recent the was XX% KF million for and primarily up segment revenue third with quarter component fee year-over-year. $XX.X approximately $X million, the The of was Digital $XX new EBITDA Digital million the third in our for quarter margin. year-over-year, EBITDA Digital revenue KF $XX subscription was million Adjusted with Digital

quarter, EBITDA fee million turning $XXX to Adjusted which quarter, margin or year-over-year. at the was up basis of which third which Consulting X% the was strongest In the Adjusted points was million, for year-over-year up Now $XX.X Consulting quarter was EBITDA generated was which in in up was third X% up year-over-year. currency. revenue, year-over-year. fee XX.X% Consulting. approximately $X.X North America, approximately XX% was million XXX Consulting growth third constant revenue in

of in Search was All up currency. the fee RPO third year-over-year geographic constant grew $XX at revenue global third generated quarter. approximately in which and Professional the quarter, million XX% regions

Search RPO scale and RPO in Professional approximately XX% and was margin third million, X% to in approximately or Professional quarter. for and year-over-year EBITDA component, up $XX.X year-over-year profitability up up continued XX%. improved By was third to the and Earnings million was EBITDA quarter XX.X%. $X.X Search the

and flat Finally, consultants for which third quarter the Executive at Executive compared third essentially at global down The the XXX, approximately approximately was was end $XXX Search fiscal fee in constant of was dedicated of Search, up currency year-over-year total quarter million, sequentially. of measured X.X%. year-over-year the number revenue and worldwide XX 'XX

third number X,XXX in third the million in new quarter $XX with approximately down $X.XX was is of XX.X%. third assignments which an search quarter EBITDA quarter fee in the was for Executive Adjusted of opened production Annualized margin adjusted worldwide per the approximately X% year-over-year. EBITDA was revenue Search and consultant the million

your That and prepared glad concludes our questions. we'd to be take remarks

Gary Burnison

up we'll Okay. open it for David, questions.

Operator

the first Sachs. Goldman George Instructions] with line Tong comes Please go The question [Operator ahead. from of

George Tong

X% You about talk trends and you're by break down is little that line a February your leading bit up indicated new business the Can into year-over-year. you business March? early seeing that that

Gary Burnison

X%. has would by up appears That's are it February human to you currency our acquisitions. come business being if Daily benefited that halt, life most a was this certainly planet. constant new recent on I say a

up very it region, in was was Asia Regionally, up So, Search when and February. by or basis, it up down good X%; be so. on up America recent ironically, probably about America North look was most at same-store sales acquisition, I'll a was the X% do in X%; up was February, you XX%; was Latin including X%; China America X%; North it in EMEA just

and way too call March, look, you start the America North and days - is And mileage best vary, Search, the by can't may in the actual data few in months. we've in just it one take early Executive in first few to it's had point but days first

- And that so you one think I that cannot when world point right now. what you is consider by just many of just the out data captivated

George Tong

but know the the are on from it that, sense. relates early just to it tell, how makes conversations clients And too can follow is about that Right, up impact cycle? a you're as a of sales it you of is to potential Is coronavirus, with talk out? I looking to progressing? of What it - more where push an count? what's elongation tone reduce sensing? of head tone kind more the are the that to contractionary it Or Is people

Gary Burnison

Too early tell. to

Operator

of Please line next SunTrust. Our Sommer comes question with the from go Tobey ahead.

Tobey Sommer

was ask if imply If North right that down? I about America And comment, International How up. how recurring? that much? that could the in you about mentioned segment. If I'm we geographic new was few is segment does Digital heard And so, questions correctly, by much think I you business of if

Gregg Kvochak

related I think, you to right? asked about Tobey, that's Digital, Consulting,

Tobey Sommer

Yes.

is maybe kind of kind us? How So, I'll metrics you that. you much of have recurring? And of wallet any with stick share can do share with it

Gregg Kvochak

Yes.

the in So was revenue, started the if we separately subscription the $XX million. and that Tobey, to was and quarter, - posted, at present deck license now you we look it

or resides. where reside so, Talent where access which about up we So it's - call roughly, what either of those Hub, have the represent assessment out $XXX the million sign to people assessments engagements to is science And XX%. our

them. where year and with like data contracts three levels, exactly, could or associated service the it's resides, different it at - two brands, with we And Hub, a levels are something is have different that, contracts but levels I associated silver, be like Pay have interaction fee one those of and they pay can't and in clients just years, - minimum remember with that different gold generally those or then would our and the which with there's

Tobey Sommer

it... is So

Gary Burnison

that's it's at $XXX business, the it look So annualized. when when third quarter the was at million, you you the so what look Tobey, - in

a Let have they to that business. recent in me point that come acquisitions weighting we bit understand that of heavier The things. out couple little quarter as did, a we've

number So that's one.

But a at of is essentially when there annualized million, $XXX $XXX look of you of that kind it that from pay. number million comes

we people. companies, got on, over So pay companies XX,XXX data million XX

A part repeat. is So substantial companies license around that. around our that the IP world of

year in, coming may they in of high but come repeat. in for they're very year As different out, percentage things, very,

development. really that next want grow and to is we piece The biggest learning

probably would be, $XXX return numbers that - that $XXX has it quite also not just And but I'm be high million, but, would high. million. pretty a rounding as call That as pay, here so percentage, - high a relatively

our pieces where remaining around the organizational could Then people be IP are license strategy.

set So how and and assessment roles, layers, and succession. responsibilities, you up do job an then spans profiling, organization,

Bob what as more talked, is business. much that a like whole, has it move a business we looks that so to want So SaaS

that. today look trying XX% that's And business, to XX% where of to when our would you estimate so example, take XX%, to - that our about think if take - and quarter, higher, their for a we're obviously you fit for be - We snapshot want that would be for business. I were that

Tobey Sommer

in and Great. And time how frame? what much higher

Gary Burnison

development. and been quarters we've Well, we to definitely the of Korn business. market. we've real platform to really when That for Ferry, investing - massive look it. love now with there several opportunity money look, you got I XX% mean, we'd want you double make is sure around a the at make that over least now - the learning to But it's

we've to that. add with capabilities to that the want added, so recent And we

pin for when be - their me time to particularly frame, own are worried survival. people the down it's going that's So about hard to

Tobey Sommer

Okay. the ask Well, when hopefully question isn't I'll and center. corona again you front

Gary Burnison

Yes.

Tobey Sommer

does - Miller market? What much Heiman addressable how expand your the acquisition

Gary Burnison

When it, look around - or professionals. three there is at really quite sales It you pieces One expands it is is two considerably. we pick there up.

And around management training capabilities. is technical. second project third The is the

we of did those, did leadership each we in - so one, before this And we had number so that acquisition. - our business development

$XXX probably $XXX or I'm will - $XXX the deal, said contributed add we leadership than just million the of quarter, of bit did definitely development. adds rata. the revenue This announced so we million what it we little we about before a more had million rounding. $XX when million it, So, it pro - in

So million $XXX it's a business.

acquisitions, So, we around recent the this development it us that's mean at was does was is is. up individuals. did market these before substantial end. part our open high leadership where the to What the opportunity And was of teams, I it professionals.

is And up probably just XX as me three one of I we sales the an sales just let professionals. the in example, take million just that picked States professionals. there United mean, so

place We sales thousands of year. every professionals

like profiles what sales have looks great of We professionals. for

we achieve assessment to So can organizationally sales trying the professionals, development. of the to what combine there you're

expand does that the addressable So market.

Bob Rozek

this Yes. is Tobey, And Bob.

client opportunity a informed to that companies, very have. I unique think across which thing the whatever delivering industries that amounts solution you that is then about others data so point of to cuts of have just all really we of various view into the an geographies, bring a that provides our we Gary on, as bringing - couple is, very, with would a mentioned to and back have, times other The add together, of us and we're data and assets can't

Tobey Sommer

different which think ask now, one at segments gaining question share? do are When back them of Thanks. you market and and in losing queue. ones you ones look share the which your are I'll get I'll more

Gary Burnison

always - an my I'm always market, been - I've bit science. in not I've - it's art whole a and career, of Sizing

is there the about capture I'm worried worried is market so - - think the share, much opportunity I I'm not we that big.

the So tremendous not talk, it, access. And Company, is when that because it's something about actually critical provides do the we have strategically Executive that question access. for we you demonstrated - now it business at no look can the with Search

are be the market assessment billion, do around for knowledge is several learning at on Search artwork, the the the how look opportunity a professionals, and But and market. it. The Executive you a billion let's development, When depending Strategy, the you And market market $XXX around recruiting knowledge and bigger small of around markets rewards Executive market. is to - is Org. size That that workers. that market. face much and $XXX want benefits, Search succession, could times

cut that piece through going development. I and could biggest focus is learning training, by that, far mean, be really to When you're on you the is substantial.

So part is that compliance, is technical. that of of part

bigger not up creating I'm in caught - not I a that a really anything up else? company in the I'm So share after much goes gain, so am market David, new caught market.

Operator

Yes.

comes Baird. Mark go Please Our from question ahead. with next line of Marcon

Mark Marcon

thing, Heiman, One say you quarter? more than with - million just Miller it this $XX how contributed did regards to

Gary Burnison

But the like the contribute acquisitions, able announced when three quarter for of said it, companies. The the is contributed it in it line announced three, contribute integrated be in not Mark, we we although $XXX of - future. look million so the - for we've we we revenue million appears we're I'm the and north it so - it the the going we've would to that did deal, $XXX businesses, somewhat we now when Company, to the to combine - it, give integrated businesses - would actually, fee when sight when $XX million of would three at all you

Mark Marcon

and correct? - into regards fell then that all And to with digital,

Gary Burnison

Yes.

Bob Rozek

Correct.

Gary Burnison

Yes, that's exactly right.

Mark Marcon

about Miller trajectory then to on the margin it of adjusted EBITDA How the take regards margins that it the a was to wasn't with a went the it was with XX.X%, went regards we part included, And digital, from should we ago when Heiman year adjusted at EBITDA business? XX%. think look at to where

Bob Rozek

Yes.

May them into see systems, that's the I we activities, time - solely of of get and up and integration pick our that until the year to the have to Mark, them go into with going done I happen all going next you'll QX - to not because we put think X. some by going and think are

And so further there happens. will after position eliminations be occurring that

we'll eventually XX% and XX%. to XX%, then as we easily leverage, this And be business and could obviously go of grows the XX%, we up so get pretty forward, more north wrap as we

Mark Marcon

how It it consulting been stripped business some has then like progress And out? we portion from should we think forward? looked XX.X% should now think to Great. How had that that the good that about some going about going of XX.X%.

Bob Rozek

Yes.

I is XX% range. Mark, consulting we think business the long-term a be as it XX% the - from margins at would EBITDA perspective, look the sort of to in

So I improve. think hundred of we that of couple continue points can basis probably have another areas we to

Mark Marcon

Kong, what it's you're I know another day seeing to it's are terms seeing Great. just day, Hong And Asia, you down Can there? to Singapore, actually just follow-up. just you the of Gary, China bit little Japan, a from in then regards perspective, of with like then up. going to talk is mentioned what whether geographic I rest you drilling And and more. about have a

Gary Burnison

I been - you very overall when Asia, think actually it's surprising. Well, at very, it's that look

the in cited you trends countries that So are positive. many of the

you just going Singapore to as - go XX%. pick to And commented example, to if it's up on February XX% over because it's just prior again you were an So it, Japan pick to the year. up in

I've find made. business, months going very overall, seems you're I look think pretty at to - it's which So four looks new commentary Asia, good that in we counterintuitive trailing to all it the when

Mark Marcon

was that X%. - was at like - GDP it take released, including you down was recently QX if a look Japanese mean, I Yes. which

some So because kind just of beating Or pretty up you're good. there? that the do we - exaggerated? you that gaining share is of that XX% think just are hear darn Is things

Bob Rozek

don't leader was extremely ago who he know, over is I think think, there. an on we I so, XX months came have or it and as business on board, the Japan, impact maybe real I good having

area In to fact, terms that's unenviable and Company that of of this because I the area, continue some of of counts. in approving we head the one have invest individual. And the taken back in actions we've task off moderating that's one talked about hires that Gary the in

Gary Burnison

is I I'd think that Bob's spot are what And aftershock. got though comments on. add you've

here So in Angeles, the then earthquakes very and Los accustom aftershock. we're to

aftershocks. think really I will see you So with crisis, this

my - that would And so be I view. own

And was in kind so, really take is the if example, letter too. China to V old not of weeks the a is eight there you you new aftershock. eight it's new new what to to the for the year alphabet things and there normal. weeks is I for essentially, any whether taken it of get a just you're But normal other And or a concept or U seeing normal want pick, and think back

actually seeing may what a be you that is on discussions so going And business new reflects time. were for long

Mark Marcon

I appreciate it.

Gary Burnison

don't think that is new meaningful. the business earthquake I for initial

Mark Marcon

have? say, outcomes? situation information the in - a on share think situation things? And whether - that's discretionary or And capital a like a we buybacks, based Gary, thinking limited it's of bad you've something terms about How to been kind of the through shock From more in relative these before what's range should about just terms protracted. a of of moderate how allocation and could, it's - margins spending currently where what's a perspective, we

Gary Burnison

Well, March, and - XXnd exactly 'XX. remember to is my without I was years XX this ago it regard that October dot-com, when earnings call, remember of I I in think, bubble it - was popped,

to would happening about. going that our So isn't to today, first operating just have investors our we're talked the what's this we to - regardless of commit rodeo. boundaries I

at in today's Korn any maybe to so old that Korn would as example, XX%, take if XX%, without happen, back due action XXXX/XXXX, a to margin. the about trailing Ferry, Ferry to were were if taking EBITDA happen you an run that SARS we XX And the Company

we there be what of business mid-single-digit we're we and that basis. restructuring with the have in kind that. committed And I'm an would if to that any adjusted is EBITDA some is environment, after taking margins, operate obviously, our In confident told investors on absolutely to

Operator

The line the next Please ahead. question will be from Riddick Sidoti. with of Marc go

Marc Riddick

for some a investing what are, little as to were the investments of what as or there wanted have and time, bit few kind was idea of around far to or kind Thank your the that. and planning over have on sort whether touch of a as some near-term on plans in projects get we're of spending bit I on maybe what branding I of sense some - we've personnel and initiatives altered you. color you it weeks that those last inning of has you. of some wanted of not that in maybe give as whether worked So seen well the little where sort of a been

Gary Burnison

Well, the I record it's and us as our concerned have thing all the first well-being - primarily concerned but anything to is first very track of world, the what the think speaks about else about I we're a of record, quite hard that citizens is, candidly, and and look, we - track think know for the health about itself.

that many which were position ago certain actions have the to done. for indicated, we we months the taking future, company we As

looking to I billions market that And a continue that of types market when us plans those. that to the to so different our say dollars we is opportunity playbook we're do of business, execute have at of we and look for would to we been have that's opportunity. and are contingency is part going there

do whether or that. to inorganically, that continue going to means so And we're organically

account We have regional driving have. a goal of stated and Marquee we our that plans

build to that to for continue going we're people out. that look So can

about probably at last took is The - you opportunity. market quarter only is I annualized, $XXX $XXX the now million. US million, $XXX it's when business probably globally, business, think mean, million, it, business, Consulting our Consulting Our look

a grown breathtaking. going we're strategy won different that - just the I got has last to today. a operate. We've that we've business we of it's some the is it's to over company the week mean So continue completely company, substantially think

in When multi-million to come can our organizational against to the engagements now. Ferry has strategy thinking where focused right we've again XXXX, competing day know I about us today. and time human Korn mean firms. the just I right different Korn China about that's we're I concerned through Ferry can't But some think that's by difficult Consulting do I we're - changing work. what think a absolutely what and four you it's that's about the news and we places the around of are our now very got is every very, a hour life. all the been mean world so protect dollar colleagues - around on strategy big what

Marc Riddick

may from suppose, then is standpoint, where I uncertainty areas or - offensive be to - where with is And Thanks. that you what the beneficial may way in greater particularly a find smaller anecdotal the than actually themselves can position sort like marquee have anything is with actually to point more there that you where an there to or lead something working engagement, peers that? be of are some you may some customers

Gary Burnison

early that talking the institution about how now this went their of very through There us to is area an they is restructure world and this - they're company.

And so, those here over develop absolutely situations yes, will time.

Operator

Tim next with the Please line Blair. The William from question go of will be ahead. Mulrooney

Tim Mulrooney

do stream revenue about Digital capable your What this is even of the XX% So long-term, or back XX% right $XXX think Digital subscription-based be the and to sounds what up you XX% get implications the to of like would could Digital, to generating is that within it business, margins? business million now.

Gary Burnison

and be business to Well, business Today XX%? is of our is in no the separates makes relatively very company. it I great, long-term could stream the know, our The mean, it what's and we you we do that still organization not trying how so in be, an Advance the grade how - do good was quarter XX%, capture of business around real people, of and or capture in started IP is question, but develop strategy, goal the be there the initial revenue small vision it terms Sure. its of months that's XX%, what where could you do what turned is on KF we've we're next a XX tremendous you can lynchpins to and ago BXC and from be out, could own. people, That in margin that's this yes, XX% was that's it got necessarily you one it insight terms that two, - and the for that those is subscription today compensate and the high. obviously think what it's doubled be know, could offering.

developed we've X,XXX do few million to a that We to so platform where just going days is assignment what powerful on we're got lot they from technology sciences company the training $X for Advance. ago KF is guess now But a and using want major a sit it. life Well, managers. first-time That platform? platform

opportunity kind is there that of So, us. for - there definitely is

Bob Rozek

this Bob. Yes. And is Tim,

say you makes would other they business deliver extremely Consulting is one they as you very platform Digital, if to on RPO the services think being then their how platform once sticky. of you that that is, into the same on delivery use it we about that RPO thing now to our our integrate sticky. think the services that platform built about theory I The And a business, working have the very, the for do becomes - of that, that we're things which

Tim Mulrooney

where and year but innings, where a early still lot different now is today? we could from evolving from this a So we might are look be

Bob Rozek

Yes. would early I it's innings. say very

Gary Burnison

taking just we're some going field. we're field. take now balls to the Yes, hit We've the and

Tim Mulrooney

now Okay, attachment right. Consulting I your all customers your look those the and within I'm really use your Search businesses, Executive rate? helpful. also Thanks called if your customer within Staying what's guys. products. basis understand trying of what at KF KF Digital, Digital percent That's to

Gary Burnison

number you referrals right. one, from you a XX% other when actually I look, And at whole, sales, very opportunity, mean so is enterprise as what say I high. coming very, inside look if It's is, would from the of that's revenue the that's with to Consulting great actually it's up in going we're our into strategy. That's referral up It's that to - going and and a an with that's find The foundation thing moving XX%. too. Digital the anchor business. time of lines - the

Bob Rozek

thinking Yes, I pull-through rate you and But measure we XX% in think, at try is that - or multiple ways Tim, there probably attachment range. XX% to to should I of today kind is look it. be the think that

Gary what does, as indicated, in of will be that - has in delivering forward innings, that assets the with work and going folks it So platform, of folks lot following that's of Consulting a that, and early what Digital we're part just and on where a emphasis the educating everybody the and terms as in doing part in Consulting of it - into them new all the as the arrangement. the on Digital

Tim Mulrooney

And vice versa.

Bob Rozek

Yes.

Tim Mulrooney

same may the I that even Digital those continue Consulting in engagement be to though end, Consulting does after sense. within how if engagement? business, products makes Yes, with a them those think often working lines, use a Consulting not you customer the about KF Along formal

Bob Rozek

would basis. They use continue them to absolutely ongoing on an

the using do about committee to you If that going comp they're think a pay, management our might Board, do we you with - around if they're the use with, an on continuous basis. but engagement can database, or

succession and that assessments behind, purposes their whatever whole becomes the acquire embedded it's the company the theory with assessments integral so assessments, engaged That's planning, for an it of for talent, - part into leave part process, it for, becomes just then development is us HR has process, to assessments that's something on. the pay, whether of

with beauty engagement of, we her along employee. his if every or And you what employee's then do, - real we think aspect about of operate an the

common it you everything is and common assessment, for somebody for everything a B talent if with And consumer our And Korn use you you, actually to sense all common across is as a knitting where, that. acquisition of you're science, do for if we and makes your the do don't sites Ferry, cobble it as - common company so using And to services, nomenclature we doing common we - for language. else Ferry, have together A language it's you. all company Korn of pay, up that it together,

Tim Mulrooney

I but as to one have being hour segments some do mark perhaps Thank try our know resilient macro it view as in as I now, type of four And there different guess we're have segments to coronavirus This, more I question. you to butting look, or relates to are susceptible that you. uncertainty? up I fit models, here, would you the more this against

Gary Burnison

be answer that, cancelled, not were have Manhattan. tennis can't on we're to that's with a advised predicted tournament would this why and happens humble predicted we're that and a ago who would see on subway that's subway you is that who I to I travel health I just had Wells predict honest the mean, Indian - answer or not providing to crisis why what not, think My couldn't you we a I can't that week travel have guidance.

Operator

from Sommer ahead. Please a of And there line go question is SunTrust. the Tobey with

Tobey Sommer

revenue on point, generators hiring posture your this toward across businesses? What's your at

Gary Burnison

Without talent, it. is continue. I'll going show. go for no We're to there

continue more to bring importantly and we're to talent So going work, going to in talent. promote

promoted So on we this campuses X,XXX We're colleagues. year last over recruiting.

we're to going going continue - to to so that. And we're do

Tobey Sommer

- and terms of actually be responsiveness the In case that's be move that like a bit may it an longer-term Consulting engagements a schedule your of of multi-year. actually that a business in in longer rack months little lead the and time can RPOs delivered RPO Consulting quarters some and customers have What's forward been over board where someone the Consulting to of or engagement open or on they assignment?

Gary Burnison

I'll line very, Bob business, a he RPO - recognition would the just is on have revenue comment at can would the the - say me, has have high tail. business meeting of by so by the the yes, Bob. speaking, curve the but It generally Let I got very longest would bell I it RPO for what level, tail. longest of has engagements, solution,

think winning today the what is company, global we're And which complex, winning multi-region good for deals. we're large, long-term or I

that, little backlog more challenging. as would So like may has business the I for strong for been the in as that is this that that ever an a that make incredibly environment bit I long think our been. say Obviously, it's But healthy term, company.

that So first. would be

next thing I look to and would the is, learning Second development. is

and may those that just may sign Bob, up somebody assessments - want tail over the as do you engagements. sure. But a to for do and piece as be particular So not longer would for be third where long some to X,XXX comment succession, the multiple - RPO those Then to months. on be, again quite of assessment But have a that? we could definitely company tend probably

Bob Rozek

Yes.

sorry. couple of happening a - is things there Tobey, think, actually So I I'm

going going take to commented Gary to up. RPO, As stand Those large global longer definition, Right. the complex. to the we by think engagements, about are back on

more recognizing have and quickly revenue we earlier up when smaller contract. in start stand So we the regional them ones, revenue, you

finding early it but impacting But it as early get would have does it some is we're quarter win the those the out, recognition, impact. or of, is, it's quarters it I as success what great gets say sort And will I Gary pushed still indicated, engagements. to revenue

deals. integrated On of side Consulting larger we're the selling business, the

at, year, if then to engagements this last say to If you you to were XXX,XXX look stratify our XXX,XXX and and that. above below XXX,XXX business year into XXX,XXX, to XXX,XXX go new

real You'll awarded the of of value. see engagements that shift are higher number a in

those think engagements being into new - you just the about if translating the next nature that because revenue their it's integrated of again very And business - larger quarter's revenue. and to takes - selling we to and about talk the because of it convert not up we're necessarily longer solutions,

time. is because a engagements with do layering that use It's provide for all the term to the in we're will to platform nice right We're stuff us backlog us business, in into that layering backlog. a over

Tobey Sommer

or - gets it RPOs kind the though, you in that drawing experiencing the those projects? the they customers a is change are either the cadence of Are on there them a in guess Consulting slowing of to I throughput engagements? down,

Gary Burnison

about, talk Tobey? the coronavirus of because You

Tobey Sommer

I'm it's to afterwards? we about can about, else but or corona are think slowness asking and I'm seeing not whether relationship, describe something going causation you

Gary Burnison

this Well, for lived relatively parts in of quite the United parts for has some with certainly been obviously, different And it have time. of the Europe, last recently. week, for States, world the

XX guidance. hard of And why for first I worth And I, that's quarters, Right. week's a on very we're time - so almost provided haven't It's the is not impossible. comment to it activity.

humanitarian real predict a got us to you've is that. crisis for and with tough happens it so And what

Tobey Sommer

has may of travel airlines, sense. phenomenon? the of Last that That most from the the those with oil, revenue proportion company of impacted leisure, by kind makes restaurants, that What's be and kind things directly question by me.

Gary Burnison

sure, probably have less upstream, of X% - than or Airline strictly about that. airlines relatively energy is Energy, company. small small. for been the Yes, is relatively X% downstream

Operator

ahead. Our with Baird. next question go will be from the line Marcon Mark Please of

Mark Marcon

Thanks for taking additional some follow-ups.

stand we percentage on terms business? in services, of Just Financial of the where verticals. now do

Gary Burnison

that have right handy. do XX% percentage. as XX%, you probably a you or Gregg can It��s

Gregg Kvochak

Yes, Mark.

at the look is we on, of business. that slides you posted that the If financial XX% services see you'll

Mark Marcon

and Digital with Gary? When the there's take which term, solutions, most long assessment in. like leadership to are succession development, you then of different a sub-segments And we area you're regards look organizational at about and lots that versus excited the strategy

Gary Burnison

have they think Well, the is integrated if that an - I our be I to, idea platform, would mean concept.

are size the to going proven. size biggest be that for But whether prizes. be just the to customers way, think of case. to where be, But has buy learning to Now, you yet given market, that's the the we look development at love actually just I that when definitely would market and the the

have Now, most the is capability and succession. assessment on we where

unique the got be ability we've to do what is to so And that. marry able to

to XX their So development we the can journey. at them them in person drivers, a can like we can taken then assessments their to can we help their assessment, million look and we competencies sales look done vertical have along that traits, this identify like we needs package - have

So learning butter the the and like are development clearly, and assessment peanut and jelly.

of be you, you is look Pringles. have - them The succession and them, the rewards you at but meeting learning the benefits I development. to but organizational love I them assessment bit bell a know the buy strategy like when the do got don't the the are think a to I with and and anchor all love and it's like - curve to little to, is of if customer J, and going PB can we

Mark Marcon

it's you it's And about how can think a granularity terms give of priced, with things? should in that contract just you of those mentioned that we bit to how like little then regards structured, how

Gary Burnison

period delivered thousands company, underlying think of get competitive IP. of again, time. is would couple-year And do the not I want how difference that time as certainly It organization Well, managers. this an sciences be to into a is priced. a I it's what, first over life we have

differentiator around can the database that's learning practical if fact the sure. development, and winner with is a combine so which a what you mean I that good from and we've steps, And acquired development for an incredible was KF built business, great foundation and separates for Advance this that

Mark Marcon

another to but your organizationally, ask percentage And in now? of what then, just terms are virus how, consultants of question, hate not traveling

Gary Burnison

Well...

Mark Marcon

or what think should is about Or guidance the how we it?

Gary Burnison

about in X,XXX the yes, colleagues there have about well, Yes, we - is company.

quite we've to we non-essential travel this been indicated point, shouldn't critical, at time. this indicated has point essentially. have It we be has for some at so, mission traveling curtailed And be that

obviously, workforce but in So to communicate weeks of in different China, a this, are parts the few Italy many gone and with trying that's daily post, through, it's guide into we've our the we in days. world,

varies by country, office. of And so, it by kind

Bob Rozek

I Yes, with folks the - what that same say, Mark, seeing clients. in doing order our we're to business, are the thing, from our conduct back it's would coming

clients And so, those to deliver with not we're that to find need. to the extent that traveling, not alternative now services travelling, working they're ways we're our they

Gregg Kvochak

right. I the a of he's same at and will say couple Bob absolutely things, time, spot on, But just

clients New the right that. a a pivoting all But - full-court we're doing the coming world as offices, every I'm and have We can in do do to the day. setup Francisco, precautions virtual are that we're in We try to San company take to people we're trying more hard, other into are is a York we're press much that every the trying over real that. or to our as thing we is world doing to sure making and visiting us

Operator

Suisse. line from Kevin And Please the question there go ahead. a McVeigh of is with Credit

Kevin McVeigh

talk, kind of think your thoughts your are with to I obviously So been perspective. safety saying, all you've like you're call. a folks XXnd Wanted from Gary

You any you source of always of kind from or given level of perspective, the this source. after from stock, expense between a framed and out you terms good how sits frame and global financial out you uncertainty, approaching the just or you folks Do you're perspective thinking the think are the from you kind are helpful one then how that? - we'll Are in of just internally to just been is uncertainty about positioning type enough somewhere contingencies thing reacted crisis in it's buying have internally. of a - be market folks back client you

Gary Burnison

In very This this. is XXXX. of Several the of different ago, March also concerned before months could got we actions. took foreseen nobody XXXX. we It's and turn. October than XXXX, We than have took actions different

And be so humanitarian honest. this let's a is crisis,

think look, else selling, that we thing we Right? so get buying, You people panic panic are store I worried, is get paper, panic And no everybody selling. doing does. when the go same I'm grocery panic there and into toilet buying, and

our colleagues. doesn't to goal has right But to left, been left around go the left so our right. And to of safety right, strategy primary

have You've we've going to anchored around that's got north very got in been and the be we're consistent true and as purpose be to to past.

issuances. $XXX got a And - we've we've put approach We've million to ago so a We've $X cash million. going billion balanced got - debt got months we $XXX capacity. to place revolver $XXX are of net of have we capital allocation. in million We obviously, got in

it's life. important of more So is again, certainly, the preciousness nothing than

shareholders. is the and think So our because company is to different no there's But no position us humanly company - it's question possible there hard And colleagues, to our compare today, about no is an absolutely incredibly there comparison. I these done two we've it. clients our for everything

Kevin McVeigh

And even How just then, or real Time perspective? of about impact kind should directly we think a AON, from that from I across any Warner. guess quick, then business. competitive the just

Gary Burnison

that's Towers mean know. I AON No, but we

Kevin McVeigh

rather. Towers

Gary Burnison

really. Not

it's days. think early I

our there impact would So if an to think be is I don't anything - there not is positive. business

Operator

are Mr. appears further Burnison. no questions, It there

Gary Burnison

at like leader their purpose. importantly most the have in you teams and all purpose world the Okay. the we've are that's talent for how thank organizations of organizations and safety, can we time a times. to strategy, Search. synchronize can consulting exceed to unprecedented and than said, clearly, agility Executive a firm. our more and playbook organizational so caution that's enable preeminent here Well, potential And And and But, you be about I and tried know certainly the entire we than and it's the common more client's now individuals, it's to we people are

next for you I speaking very thank look you much. very So and time we'll Thank time. much forward your to

Operator

today running conference March this X:XX one replay available will at Ladies for and made at PM ending call gentlemen, midnight. week through XX, Eastern be today, for starting Time

the may by Executive participants XXX-XXX-X. access entering You code service the calling XXX-XXX-XXXX. XXX-XXX-XXXX access International dial playback AT&T and may

be the at Additionally, the www.kornferry.com Relations section. for made Investor replay will the available playback website company's in

you. Thank

may now You disconnect.

Korn Ferry (KFY) 11 Mar 202020 Q3 Earnings call transcript