Korn Ferry (KFY) 8 Dec 222023 Q2 Earnings call transcript

Company Profile

Participants

Gary Burnison	Chief Executive Officer
Bob Rozek	Chief Financial Officer
Gregg Kvochak	Senior Vice President of Investor Relations
Mark Marcon	Baird
George Tong	Goldman Sachs
Tim Mulrooney	William Blair
Marc Riddick	Sidoti
Tobey Summers	Truist Securities

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Korn Ferry Second Quarter Fiscal Year 2023 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes.

We have also made available in the Investor Relations section of our website at kornferry.com, a copy of the financial presentation that we'll be reviewing with you today.

Before we turn the call over to your host, Mr. Gary Burnison, let me first hand the call over to Tiffany Lauder [ph], Vice President, Investor Relations, to read a cautionary statement to investors. Ms. ahead, go Please [ph]. Lauder

Unidentified Company Representative

Private Amy. such Certain and the you, of made constitute of statements those relating today, the meaning as the plans statements call Litigation to Act forward-looking XXXX. Thank within in Securities future goals performance,

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

XXXX the such Additional with the including quarterly filed EBITDA. annual constant XXXX. and today concerning to such the the financial in report the October release the report can some measures for may to of year company's company's XX, soon for risks information by and be in found adjusted other ended in company comments amounts, and uncertainties EBITDA and the other non-GAAP SEC, Also presentation this quarter periodic fiscal be and relating reference currency filed the reports as

call website financial relating www.kornferry.com. financial which these Additional directly Gary. and GAAP to to in at I'll in including the Burnison. measures over posted the are to Gary of release presentation the company's is With section the measures, comparable earnings the this call, contained of Please most go reconciliations information concerning both turn Relations ahead, Investor that,

Gary Burnison

and joining everybody, for us. thank thank afternoon you, you, Good and Tiffany

pressures. In We're in and global been partners opportunity fee performance change from strategies and significant proud response, have XX% workforce on rates. front policies, continue was were given which undoubtedly very organizational to XX% inflationary interest I'm now. clients our good. really fiscal to every our seeing global and in several shifts generated at in that trading at in for results over $XXX and high decade rates and tomorrow up We low will Our of which Ferry. central persistent a months for to has the historically their second million Korn liquidity actual changes bank adjusting about companies transition economy revenue is of constant currency quarter

come we much I to become. how take it's to we've a and calendar another As more come far think capable how year, of close Ferry of stock has good Korn just

offerings trough other First, when at we historical results and floor scale words, it's In each performance look resulted progressively be from have to ceiling the diverse trough. clear the and to and term. through peak to our higher cycles, better the in our larger peak through incrementally continue

XX%. from been Xx trough we ago, than were For even offerings. our has years revenues higher. run, recession the far our doubt There's of greater COVID different relevance long a today and we're that the just XX-year with no scale peak example, a substantially CAGR are And our Recession to few and the over firm more Great than

our professionals And over contract revenue transitory offering we're represents ago. million exist a us major as nearly offerings now of the coming in XX% firm great we business a that strategy, brand. make integrated that solutions of represent go-to-market revenue that's execute companies more line includes company. offering effectiveness X there's combined solutions. best didn't strength capabilities major capability X-year And This digital annual a XX% digital great An truth new organizational with strategy, growth well-balanced, transition the from line resilience of over our doubt of rate offerings moment and and and strategy. Today, of Number consistent firm. develops the Ferry And much proving a But and potency $XXX the capabilities the anchored combines talent globally, our development, rewards represents and nearly and today. second No geographically on is relevance executives, our their and the Ferry the clients Korn in transitory Korn more their consulting propelling with referrals, economic one, leadership culture, of of about business million clients in our our of strategy of firm. slate we essentially that broad for around out cross management comp Ferry and grounds and than diverse resulted basis. revenue contract. portfolio, $X colleagues, would million a the a has Ferry also through on is capability Ferry $XXX period. Korn of succession, advisory X XXXX. this with secured a Korn value evolving much, We've staff our past interim Our diverse of the wins help that rewards XX the firm RPO professional which One account a this quarter. this and is this of a billion a million our little are and strategy, year business times like compensation a our assessment that year run top And now our in almost This award-winning enter The trains on XX% time these. new others like almost to moves RPO a of of under for Korn acquisition, XX% uncertainty

a to our consulting of accounts. addressable invest interim and capabilities larger supply regional trade build forward our further We're ecosystem our leadership to development Looking professional in U.S. and the in platforms, to the few. cost finance issues structure with putting develop to share even of organizational the we're particularly digital a alone going positions towards digital as as And and care in management, that to and are up solutions environment. line a profitability short our professionals. the on integrated to emphasis sales going we're further going core partner going billion dividends company to pursue and in will to going well more of And optimization We're between legal, offerings, relevant approach and around advantage distribute $XXX continue going We're almost a to chain area. pivot going our solutions to of balance to accounting, global our be allocation the to cost our technology, current health and to expertise, just We're today. continue globally. that confident and refine and finally, market, clients that capital to deploy upskilling We're we're that both we've going midterm lanes, and wrestling opportunities. especially systematic transition also seize our digital a carefully M&A. on our to repurchases, and name I'm suite particularly skilled provides RPO XXXX, to balanced talent account strategy perfectly with changing built and take technologists

to this Bob, addition Bob call Tiffany, on it I'm to and And In by joined Rozek over you. turn I Gregg will Kvochak.

Bob Rozek

you or morning, and Thanks, are. where afternoon good Gary depending Great.

business economy Gary forces rethink is driving transition. and to are the As economic global said, their Today, their unprecedented strategies. talent in companies

companies that existing organizational roles ever. is while filling also to are talent and new it keeping businesses clear their more engaged workforce complex essential facing of developed. issues this and seeking are also As transition the Today, retained, unfold, ways continues than

provides last times Our help transition even solutions Today, growth same needs this This clients the our company us an guide slows. economic service our clients navigate the years. of the expertise with these suite has strong unparalleled market brand is uncertain workforce aligned built that built over and our for to to as through of XX-plus through with transition. is the opportunity

strategy, then our integrated into more we ability we we is clients service by It and ahead, even ready we of solutions and were our with realities for our integrated workforce is organization solutions that Gary. points form gets When talent solutions stand can our package take of into and together industry-leading unparalleled. broad pieces our these our as the when cannot. we that which and data simply adjust interesting them outlined core solution, leave differentiated view clients competitors their to of our unique an core to range partner bits Now lie believe

me second let good interim. demand revenue constant Growth in at Fee was $XXX million $XX results. line currency. of or up We interim to It's grew and quarter professional and XX% business million. XX% of to saw Now, turn actual rates in search our digital, by the portion at year-over-year consulting, mixed.

Interim in seasonally business was & was and saw our by continue up was the XX% more new aided we year-over-year was The which to fee demand period. the acquisitions was Professional up excluding we down second search professional constant of interim see and Similar rest company. offset and growth at Consulting RPO the line with XX%, strong the placement the was RPO, that permanent anticipated, in At year-over-year, offset executive from nearly elevated of XX%. Search to revenue, levels growth pandemic quarter, portion the up recent in permanent currency, of measured placement this up during business. in the business up talent every Search search was moderating businesses the RPO moderating which actual recent across new X% demand digital currency. at than partially new As by of new our portion consolidated Consolidated by was and recovery business, rates acquisition year-over-year XX%, constant XXX% we business, excluding Executive X%. acquisitions, was in

which referenced. As Search been Synergies of new a of and the our indicated, have lines second other quarter Interim also business X the strong. between Gary that million $XXX very awarded assignments business large record Professional Gary RPO & was in included

first & If and resulted back new profitability when was have Interim profitability core our a the Pro lines approximately as that of did and second shift wins as in investment XX%. business. of of million Adjusted EBITDA margin in spending mix digital. also by fee quarter. the well value impacted XXXX November solutions. quarter were really we $XXX a assignment of continued at combined quarter Pro Interim million of our in in business earnings the and and with Referrals nature that's nearly our business & synergistic between you Search search a X, strong the by the and contract in remained line The complementary reinforces Earnings revenue and $XX into to our second go other acquisition, XXX in

were which was Finally, $X.XX X% diluted per fully -- earnings adjusted $X.XX our or year-over-year. diluted share down

our were fiscal adjusted 'XX. Now. quarter it's was XX.X% in that $X.XX higher which rate by second due of the to XX.X% a earnings tax important compares per share and note that fully to diluted impacted to negatively

second the the cash totaled cash investable and million. $XXX end Our marketable quarter, position strong. securities of remained At about

investable global our exclude reserved balance end Now amounts $XXX quarter cash about and compensation you for bonuses, was deferred second million. if the at for the accrued of

$XX Our directed repurchased capital now I'll capital to that, balanced. With expenditures operating cash We were digital paid about using that continues our million well about $XX we deployment $XX funded turn stock about the to in to approximately we towards business. XXX,XXX million Gregg again more be million. of review on dividends of million, M&A. of And quarter, segments over detail. the deployed second Through our $XX about call shares

Gregg Kvochak

for of XX% Thanks, which subscription was $XX which revenue $XX and both the million Global million of in in currency. quarter Digital second business Global XX% was were subscription EBITDA commercial up fee was Earnings with the with million XX.X% margin. for in new or was XX% adjusted the XX% Digital sales. of generated by quarter $XXX approximately EBITDA year-over-year fee marginally and representatives adjusted second million license to product $XX.X KF profitability and was and year-over-year total up the Bob. impacted quarter. investments at Starting million, a approximately license up development with In X% initiatives. was the second Digital. the tied revenue quarter revenue in sales Digital KF and quarter, and $XX constant

constant be in which which $XXX and revenue strongest For almost broad-based XX% up up EMEA with was to X% area growth Consulting, North solution at second currency. regionally the fee constant year-over-year and approximately in up Fee growth quarter and XX% million was were XX% at grew currency. and to revenue every in respectively, continued America

in quarter adjusted business was second In Professional acquired placement which second to positively global was the quarter the search $XX aided XX% consulting our approximately quarter Fee new and was $XX an Additionally, grew Growth currency. impacted Patina acquisitions. adjusted capabilities to million quarter, permanent the year-over-year remained was recent Consulting in and with for and $XX margin Group, by by of for year-over-year revenue EBITDA enhanced constant Interim X% second million in strong tied new from in recently and up & the million X% second or at EBITDA ICS. Lucas up was year-over-year Search XX%. approximately

the part primarily Interim driven IT provides by second to acquisitions ICS professionals which ICS Our of the million, in Service a fee revenue grew on-demand, of project on recent in flexible skilled or -- high quarter $XX basis. acquisition

Services hour fee per and remains strong. business day adjusted EBITDA $XXX to Search Our of billable The second was margin. revenue per Interim $XX.X bill Process average year-over-year XX% outlook & a quarter. million for was $XXX,XXX generated or with second Interim in approximately for rate Outsourcing quarter, adjusted XX.X% EBITDA million Professional the In up Recruitment $XX.X the we

contracts was business second the Fee $XXX $XXX few X-year totaling million the currency. due volume X% to in second in As the revenue total approximately previously a life RPO at contract including of to second brings at to and technology This was large the our clients. the quarter record was was revenue under of Sequentially, in end sciences quarter mentioned, almost million new XX% a million and $XX million. approximately or moderating $XXX quarter, million. of down constant primarily fee year-over-year X up which quarter, the awarded revenue second tied RPO XX% $XXX

there forward, going assignments and a and more costs Adjusted quarter the which an it to revenue. XX% million or also note like adjusted initial was margin second to quarter up of year-over-year to the complex for of awarded implementation $X.X delay startup those in timing important EBITDA second larger, $XX recognition long-term between Additionally, in RPO set therefore, are up is the RPO that million XX.X%. EBITDA and grew with is

XX outlook opened was the the $X.XX revenue Search in second fee of which per X year-over-year sequentially. With Executive was X,XXX. XXX currency. quarter the EBITDA for an EBITDA was down in $XXX in was fiscal Global XX% I'll up number call approximately was APAC was fee and was third for back in was EMEA of of quarter, million America Bob year-over-year At adjusted in Executive X% approximately consultant Growth APAC production search Annualized global and dedicated year-over-year X% the offset and worldwide second XX%. was slower currency which consultants by discuss constant Search currency, constant quarter the the and new up second quarter primarily assignments down down number tied XX% quarter, was America North XX% X% Executive year-over-year Search China. worldwide business to up quarter. second second the the quarter and million Finally, at down year-over-year adjusted to $XX.X to second million and in new revenue second down that, to currency. at which demand was end at quarter the the the constant Executive margin at which down X% North each turn Search with Global our for In of were in constant 'XX. year-over-year the of

Bob Rozek

Greg. Thanks, Great.

and January business Our new with new third for from historically expect patterns trends and Consolidated quarter rebound seasonal the historical holiday year historical to really revenue new our and If line in quarter is calendar current November November our to both business our remain December with fee consistent due patterns, in sequentially low down and followed seasonal we to expectations. and was that's slower business slightly. be for season.

in nearshoring. process our realign resources plan our other permanent along these are doing we reductions sets larger, the organization review, geographies reductions footprint, integrated the that evolving is Because And real costs. a discretionary in acquisition is in capacity. workforce, talent further factors, We in that as a making skill where offshoring we're with in our well right right investments at operating have that developing we the of right be estate we'll to moving solutions, match excess recent looking as placement in in with the in reductions to to of solutions. Also this world the an moderation selling to from are

We expect million savings rate to developing we plan that million run $XX to cost will $XX generate the in annual $XX million to $XX are will million implement. and

of of the to completed we with workforce, realignment end to Now by the third and the expect our be respect the plan implemented quarter.

We between expect annual million, rate run of savings and starting fourth $XX $XX in the million quarter.

Now the realized future with going estate certain are amounts of real are be to in rate, this run included the the as periods we in savings plan. execute remaining

and in worldwide we given of Also, pandemic-related markets $XXX assuming the we fall in development million. of to quarter rates, revenue 'XX Now $XXX in changes exchange $X.XX from major further diluted economic And XX% in realignment of third fiscal adjusted summary, new expect our financial EBITDA foreign earnings to conditions, quarter to million expect our leading third no quarter range margin geopolitical third range the to fourth conditions, to lockdowns, from the the $X. temporarily factors the to per plan, share adjusted our consolidated and in to range to XX%. fee a

Finally, charge third from share we $X.XX when you previously to to plan, include earnings GAAP the per our $X.XX. the discussed diluted range in expect quarter the for

management clients will the it's our our questions And more We've realize working their right volatility remain the and brand. than would opportunity help Ferry any strategy. is the believe clients that Now, we short-term you provides solutions facing. answer for and core business, power value is Korn the right that that of the our in result an our are is organizational to critical integrated is a while also With transition We than and the our our built solutions with that, strategy in we prove firm talent that issues some right we and for glad the have. for confident an success. partner. that of the talent partner integrated and essential talent believe be economy relevance ever, strategy solve long-term ever that more Today, may to us

Operator

of [Operator George Tong Instructions] Sachs. Our question from Goldman comes first

Bob Rozek

George, we on lost you. question. don't move Why we next the to

Operator

Mark with Baird. Marcon

Mark Marcon

the of orders we describe right clients little Search in terms in you from and and up terms Executive the bit ended and what you of And seeing about business of January you're on what further trends December, into confirmed go up how of through ended like Could side as coming new a terms February? terms that confirmations through? flowing prospects, your in now in hearing sequential the

Gary Burnison

Well, all, I'd would for of October, Mark. business and have historical so it's currency. November imagined the November X% new say, to was be The at compared overall business up it exactly like first firm with to [ph] in constant was line sequentially we new in trends,

ago. Now been very question you to Search, this, on we know, moderation been for levels Executive in There's saw years And thing X.X respect several -- business a in your a new same saw now quarter, with down saw And we take about November. to Executive the that the we've saw from we months. as seeing the the heightened Search, X%. second we

currency XX%. So both Mark, XX% up very was currency, EMEA. this actually constant is quarter currency. is declines in in And of Search saw And was in in outlier constant EMEA again, the November, up Executive both quarter, strong. constant November those. was the and in the we EMEA

months; economy we the we've recently several air for we November. that's of saw the in clearly, and what saying So in tire got as global out as been the

Bob Rozek

months, you is the in XXX pre-pandemic Executive thing they've moderated COVID period, at I or -- or had There look about for they've of today add X Coming right? good seeing over commented a the in to we're levels. that range. down shutdown, The And North sort good in past what searches. to they've this my but the back X back I the probably through come X XXX the month would month that were months, moderated call, you So we I'll America elevated volumes the for the an and recovery, as give XXX. remarks, the up if Search XXX, to we past bumped X the, us only is that would XXX Prior XXX, somewhere example. to is to to a in

were So back pre-pandemic. where right to we

Mark Marcon

to here are Bob, way as are mean, obviously, next the X trend you And sharp. to hold months. the the I expect over we new guys that you X think like would to about orders going

You read all the headlines.

are You could basically are tightening. so see recession, I'm a saying. some belt expect CEOs not what your sure clients you would it. But most expecting

orders are So thinking a basis? new how go-forward you the on about

Bob Rozek

Yes.

we QX seasonal our low. think I is -- some have

worst obviously, So will the year. of month December be the

holding January. unit So and today the to with just at forward, it's pattern not this. we're continue. field, talk going slight folks we're what serve from expect future, things hear -- what that going to to I do we're we're as compensation for letter of that's where a is have we're follow a in taking When Kind foreseeable perspective. to rebound so kind the we'll that volume signed." we are then longer looking we going to people are not I And for what get in most It's the saying, of "No,

Mark Marcon

talk the that pro & numbers But forma are pro organic on you're Great. basis a a or looking an forma basis? the the is a And on acquisitions. Professional you can Search Obviously, basis? how skewed Interim little bit on seeing about then by what

Gary Burnison

interim organic very Mark. an business looking good, is November. The recently basis, On looking good as as

event-driven. isn't want that's -- one feet massive from to reality there's all around one thing the to time the a and just back labor changed last years. So thing as the around happening go lanes, X lot and transformation. recessions, different we're an the And at labor we're the seeing Executive low. -- U.S. I'll is be Pro near slower seeing companies what XX%, they on you This all are that hasn't the that's landscape. seems back labor But our leak -- shoring, Search, example, think Search. that Interim I changes The force, to at the is which question to pressure global because almost no nomad the take pullback as substantially million are career your making same when look to X XXX given at I a In force. in were the Americans changing historical rate moves know, trade a workforce this in inflationary the participation is in you And of the under

uncertain the falling, huge, up up that the of be compared pandemic, is in different past our different up And kind revenue quarter but the at So seeing to you compare falling about the talk of the revenue company. our huge going to of I same of can workforce. a before cycles. massive guide firm think and them can much, rate suggesting the seeing about hesitant you is And you general new is midpoint labor and that's pre-pandemic the you're openings substantially quit And makeup results back downsizing EBITDA expect. which force times the the QX I period And time, EBITDA you're is would difference. any of and I much When talk it's the recession up variable job to and The [ph] think companies are at today XX%. guide pretty going XX% XX%. a doing XX%. But to a to look QX I

marketplace. firm X consulting I broader was you've November, where gives has consulting But don't new a mean I tremendous a Search up today, firm currency. clearly in month want our constant take at business, Executive new now that XX% and the a I got us in it capabilities. you mean have completely trend. make a business to But our So access different

was quarter, the an elevated side. the on positive it for in it but still level was Now

business And I this So this billion. on. completely the think just I RPO you've new the and $X -- logos you different mean, then highest been in history. has where almost this a mean, our as the new quarter, new business, the overall, got we've I the unbelievable firm in throw a is company's was in paradigm put

Mark Marcon

organic? during million RPO with ended big particularly. brand $XXX RPO? revenue. in winning -- other annualized Or switches become new side, be you that on looking RPO. players? health Or up are those mentioned a that bigger adding player the that those in you're going you X contracts you that at Congratulations on regards going the then to gained were that things? Is some from quarter, you Can try And you to to to the care Were to

Gary Burnison

Well, we're operate And both really were it's really Those -- began. firms other looking space. both. strategy. our where account they of taken were they're because That's that at taken -- in that from it

And so those are takeaways.

in want Our business, changing amount movement health this of partners. you to characterize we nationalization, regional care around it, be much things match to more global should tremendous it with focus on have to do resources portfolio you to call a rearrange one is of how however have our we agile with our shoring, the we accounts. near could And putting we're trading

got of one And an Health today So targeted clearly, enormous care we've Korn care. X% is RPO we health in the we've the of areas that represents opportunity. think Ferry about area, globally.

got well, something do team. So inorganically, pursue fabulous organic do on to we we could a We've Mark. an going if that clearly, basis. we're that And as

Mark Marcon

Great. And versus reductions the is that that in the and going then the personnel real I'll the X last to footprint? of regards one then much With be to outlined, how queue. estate you rightsizing jump expense

Gary Burnison

one respects those is period hybrid is Yes. many, to to estate. many I working We're real transitory at and this mean look continue sure. in of for going

we've so just make it more to there to that. at do doesn't economic look but got sense. And like continue We would actually to

does we're from is And what which picked total the But months, probably to wins. we've between So going or seeing our plans And the base new our the shift some resources X/X of look we're would we see now between some we've been something we're I it's doing assume the finalizing last rebalancing estate. some so, pullback mismatch been the workforce. can something is cost going few would very I where day, that at hard but to working to like the at the end own include maybe real right very, geography, over contracts. areas assume a we're language, up around. we've these have than exciting skills how of of major

this And is something that It's we rebalance it months. it not advantage horizon. opportunities that. nowhere but a near take our very, to so several -- workforce broad-based the very do with wrestled layoff, of hate I It's I targeted. have the Absolutely, on for to to we is see

Operator

Goldman George next Sachs. from Tong, question comes Our

George Tong

Sorry for audio the difficulties earlier.

savings question So inflection Are more company? the going be to of business an the real seeing is of It Exec new Search relatively trends? more around balance a going to estate. Or across be you're the in it program. going be broad-based in cost perhaps cuts personnel, a it's like cost concentrated, where to sounds

Gary Burnison

we strategic language looked those No, it's that and But very solve wins you targeted demands, be plans. going imbalance. have and we going I cannot And it's get would there major meeting location wins. at things the like finalizing still where for into some to secured is an as to that. capacity organization, because we've excess of And because and the exactly we're I'm not we tell have that

what So and you we on our we'll, tell call, we'll it's very that targeted next did. certainly,

George Tong

about margins said back can margin for Got of would target be long-term the to high then what circa be the teens, think you to historically -- would what margins related time mid- to back it. And get you call when to it XX%. as in that, frame recovery the

Gary Burnison

Services. it further sit think career landscape firm. couple there's way I really this wildcards. nomad market is the clear absolutely Well, with a the massive opportunity We a to Interim on really, differentiate I And that around calls, our a see do of when is account good look,

be you've a It got so I Ferry. And market. be big to million. X-year or We've from a billion. as for essentially differentiation as last that of think huge quarter X- could $XXX that run time, of Korn or over period rate big X X- $XXX could a this a driver of And taken

a pursuing there. So market we're larger

Consulting compared say, lower Executive what that that Now comes or with is would you margins Search. have, to

mix that's a happening. change is there And so

the were not much that in out And in talked between could as points we XXX did the RPO be or basis And XX% Interim, COVID, mix as shift of so when target, seen XX% so. we and coming mix we've have business to when long-term that business we shift about it today. margin

that single nimble opportunity. the So, creates we in uncertainty to when day. to of George. have where such model the when hard to so I continue terms That's thing last mix. an into quarter, there's say word. our one and -- every uncertainty account in shifting There's word you now, opportunity is that really that's make uncertainty to But be like to did and to this And XX%. very right take future, out we we strategy overused we and account is shift you that returning mean sure are have

George Tong

sensitivity macro relative Got compare Search you positive it. lastly, Exec to business, you've and how Historically, business business the resilient how cyclical And the would actually business? Consulting then on pretty the And lately. trends been? the of Consulting has seen the Consulting some

Gary Burnison

Well, have had the mean started mean, is company, was enough it with million. long. $XXX we that not resources. today, I X got we do -- I today we've but that when I truth it's it for the haven't about

are We opportunity. the market undersized completely given

the doing that we things that quarter of really the a with probably kinds an substantial proud have to would to it. cyclical. Ferry's intuitively we instincts the more even the business, compelling. less than was the would And the Search to with the more business be that's that is But the say Interim the RPO in Perm think my And Digital, cyclical half. I what that Search, looking Korn a went record and am I data me. it's consulting we recession, you and did future. we we don't of I inspiring cyclical. now and makes mean, was And parts even of team to years Recruiting, X even actually, part half the because our over area have, -- that substantially capabilities Executive track think the Executive that of what be hit through we I those services Search us would X Consulting, story compared COVID saw have kind harder. new at November of the would in cyclical has I all So for But without that would what of long say that's even are business. that were is I amount or we're the -- when large we

recognize Consulting as Interim no stay But Executive general are have And different. high go not Search specialized. the stay going in with to are the like that. to margins are We're definitely strong or to that. at business, We're the into anything There's say, going as, going that margins. we just question You to business and about staff that they the not end. very

Bob Rozek

a through we little range XX%. if the go Consulting XX% actually down. at it The And just maybe -- were we're whole RPO you Peak bit. a business look down if on about that was George, year-over-year. firm grew back you the the the overall. was year quarter, to trough XX% then pandemic, in pile to going period to X% recovery, to our

Operator

from next comes William question Our Blair. with Mulrooney Tim

Tim Mulrooney

helpful cyclicality, you're color about was That how the the on business. thinking

on guide, the quick, the third for real quarter. Just

quarter assumes would that. million guidance the thought margin from midpoint less the down from would Your decremental down, know, is somewhat I the the $XX second the be, to EBITDA like don't than be to the know, quarter. don't have $XX I to But second quarter million third midpoint. at quarter at expected third I revenues

that near-term revenue? that can just fast led as Are factors that guidance to as there investments just about happening fixed Are cost talk here? So don't come down you primary large there the range?

Gary Burnison

No, good that's a question.

to of reflects First top all, guide would as X% we of line. seasonality X% view the on the what

second long one. So time moderation factor then we've Recruiting. is that And seen Executive that's a Perm around this for been number the and Search with living contributing we've that

we've do we to look because where -- is this that compromise make how you're to I in midterm workforce the changes to going short the and and at that is and margin do situation on of the draconian don't the that want trying right see really rebalancing our opportunities. carefully been impact what what ability to terms Now a is not

of with out reflects -- we've that And as that some longer we we how that really this resources. planned redeploy carry carry resources. we decided how can So wrestled thoughtfully could to reallocate we

on beginning the in So to And that's and execute really question. plan this answer the you calendar about of your we'll we'll it talk to XXXX.

Tim Mulrooney

talking to helpful than if terms see I on long-term also you quarter companies business. feel Search for the short-term held versus of high And for make what long-winded more mean that great. flattening specifically, is you gains was for total year? search executive It driving about maybe I for are expectations much I'm we your to right, last about base -- last saw That's some I talking curious would search your of that really about this this agree. are are much XXX%. focused. from One and this guidance the what volumes? that moderating me. it in and build is the was year, business investor I'm decisions just Search. on third huge higher used privately decelerating, would Executive like this All for down And more in up now compensation how up is Sorry long-term the of based third in was business sure. how How you space thinking the I rather engagements versus Executive segment? those business color. or comp quarter your I what for question. actual revenue the I'm how really executive coming in curious levels revenue remember the

Gary Burnison

steady give there's Bob that Executive wage no is be pressure bit, businesses. and believe Search fee. significant data line wildcard on has little the planning in happens XX% down Well, which a when that this I and our you fees. huge the couple look, that and top different so, which And kinds do look but these could what I a a last to or that that's on off behind substantially over more bit really a we're of think, like it, think labor been higher is the the volume something market little the can real I in guide, there's Gregg probably lifted in question at of years on

all at of and XX%, [indiscernible]. going hard do Great this is for stuff me is even conclusion that are in I to jobs million participation Americans doing to in are companies participation going Bank hard is really the this we the XXX to for back But think Recession the looking United the for Recession. is X.X -- waiting going to rate what a number, lost to the in indeed near great that as they're is be are United and come million were States of shockingly workforce. really to When the It in example, the an look lost States, and come as me I hard low. anywhere for costs at it labor kind Central X me they with if like million to labor jobs. It rate

Bob Rozek

spot plateaued at did but coming recovery add our average Bob. the Gary really pretty is volume color. And see to related. that's Tim, much fees It count a search in through Gary, and on. all more just We it's point. unit bit this increases

with Now we're just actually dealing volume.

Operator

from comes Sidoti. question Marc next Riddick Our with

Marc Riddick

marquee gave -- color the call lot will in I third to quarter. you of want for So be seems fiscal your appreciate the remainder that did remainder it thoughts and what that it year, up of it ballpark though and as you'll follow I I concentrated sort behind more the the much all a though was is that be let's a little this could doing about talked seeing of And sort accounts if you process you're I bit that also the of guess as that without granularity, place? whether take what to led about. maybe what without of big talk of needing but a too giving was picture-wise, -- function to you wondering

that about and now few that's said also, made you business the part But years last to that wins. new think the I revenue of XX% would substantial over of up certainly, be in business. understandable. And you've progress talked

by driven of is to being you'll the as ticket versus get going sort the accounts of to how picture, are I'm thoughts much and they're marquee pursuing? that big where to trying get that of get trying of ahead of they or So be some wins kind where to big

Gary Burnison

costs Clearly, we one -- hope the it's going the very market success about and hope same. some And have be look, enjoyed to large We is at securing Well, as now, going. we you months it's moderating we're incredible overall we thinking hope where they're engagements. doing paper, we've we've in the in like the about X well terms seen workforce. time, same of read this as for companies read with their what as

of what what our what parts of new wins. been that's you've and in call business legacy and in some pullback seen either And coupled worked as the reality because is base when there's a with is that major or language last would can't you business because I mismatch seen compare So we've we've you those just location. the as hard of solve and few over months,

have without around mismatches, a and the mismatch. that you for we're And unfortunately, And read the so megatrend doing. given And opportunity and paper, address you some places. and you in when the I mean, there to position is changes in that's nearshoring, lanes excess the company there's what and trade could global capacity guess, guess global could partners we trading particularly

Marc Riddick

consulting-related well about to your generate as And -- able talk and you're to and to to a I the wanted Great. wanted the share names, as other of what little dividends highlight do just ability your what sort activity is the and I given done then the around thoughts that with personnel bit the cash just and and like. market to -- with generate cash repurchase

Gary Burnison

done. balanced a invest conscious have we of capability. effort look a to And strategy tend what We've over Well, stock. made be are the of capital where we've that answer. certainly Interim well. of past the dividends million as my to, at think this year-to-date, to we $XX didn't way We the a allocation the part plan Bob we and right in But couple our years, in as we've indicated, good I would look very repurchased back that's now, fiscal businesses, continue

somewhat as then if would if levels, strategy Now change, they well. change our valuation allocation capital

Operator

comes question last from Our Tobey Summers Truist Securities. with

Tobey Sommer

kind off. year-over-year January sequential if to check decline to I guidance. something implied midpoint on a the or double start just of the What take basis, wanted revenue of we the was

Gary Burnison

implied, XXX. from you XXX mean to The

Tobey Sommer

year-over-year? either to it either just organic be get you or or just want in can a Well, a basis. I changes sequential did sequential year-over-year as

Gary Burnison

Sure. currency. constant Organic

I'm Bob So XXX. last to correct is third, actual top me. But off going and year, say I you're the our so of right have going my year, Gregg to head, last want

that currency, is when the dial midpoint you of The neighborhood. back XXX. guide translates constant of XXX, XXX think I that in something for it to XXX like kind

have So our constant is benefited Perm we that up it investments the currency, reflects from made that's and X%. the X%, moderation business And in in clearly, businesses. interim that Recruiting

Tobey Sommer

Okay. I'll move a at on to you a number. couple of can maybe and arrive other questions

Bob Rozek

close numbers I to... those -- Gary's pretty said were

Tobey Sommer

I get it.

for the answer that organic? could acquired so just what I to what's the get the -- So was revenue

Bob Rozek

the take for we companies. specifically Yes, back, of would to Group integrated has the to them, once been identify the the to year. integrate and go I Because back ability run the when to Lucas acquired you you have beginning we rate since we -- Tobey lose --

that. that But to said identify ability the in if you the go to $XX So you're sort talking somewhere million million companies, those to rate bought the I back $XX run have of don't we we when range.

Tobey Sommer

I types about terms number incumbents a annual choose over differentiators wins? color know the occupations, the Okay. of RPO bit but some little hires, of geographies to client it have Could you talked maybe you prompted and us about in major give the that might X already of you

Gary Burnison

begets or Bob -- incredible success have is, more the think going and reveal to of clients key the differentiators one now client and number one, high-quality industries. we're But it's that let not I'll that I pretty the Well, the referenceable of we success the success.

IP So and and the and things this org platform number process, the one, continue with the three also And success ability that, we enjoy client to strategy, compensation a that's why to business part that so major it's to incredible solution integrate that integrated particular other advice if that's team is achieve, reason of the whether whether X. wants in that number is

Tobey Sommer

me might the -- I downturns. taken is the I'm described than cost wrong, one have substantially sort the smaller if classic think a prior of you you in correct cut [indiscernible]

just So undergone a 'XX. with hopefully, roller the How Could as like that 'XX, specific where now job in you level headed stability and coaster world speak of is get. I You've feeling? volatility it cuts, measured but that. some organization question of rapid you the of you furloughs, of think assuming realignment know lot to you're that seems a really calendar I into more sort wasn't hiring then demand the described. has

Gary Burnison

transitory from are said May it somebody is. world Well, from couple-year COVID X And the be where entertained period story how it range the was that that got scary. they where aspects very a morning, to a a a even reflects I whole In this they transitory -- back, -- people to In period. And think would years you I produce April how then different consume, COVID. when of they years were. it of a to a how early, you and journey go X XXXX, hear ago, whole

going that be years to you was If over heard that you wondered have ago, you and next. story fallen X.X would had

So a beings. that we're unique very I time think in very, as human

of the more example. is years. nights our ago couple call answer been was perseverance mean, I are X where more well. in as they've It's an China part on has think difficult situation. been and world for a China, very I team of account And fortitude a in Now you and that in I in

think where very question in to kind I a and are the really world. And a ask. So it you -- of spiritual human it it's do very on I depends think

of that own what to just people Leadership believe of lives, that. the don't again, think in we're personal is now that's about and through right something. whether whether our their I'm that companies over that's proud sure organization And for X,XXX cycle programs And to I I end this that And Mosaic to X,XXX organizations of where you inspires now. leadership Korn [ph] we are its it, charitable going about whether that's it's whether it's an to that we're truth I that foundation, turn. the through an really working U us, cycles. day, a through enable the George programs, think what put walks of firm in has Floyd, whether when And it our through accelerating put purpose lives, at we'd and the see you Are -- for Ferry For is, And is go it's you. color And incredible we views. for about. potential. we, like purpose exceed the where reflects record And our track people that We change people talk. be people's most in is think it's a people's our Humanity probably talk

Tobey Sommer

individual other I'll one. heard as the digital try products you drivers a haven't color about to KFL sneak or recently. the Could last We brief [ph] in of provide some growth? on much

refresh to you to want I us. So

Gary Burnison

professionals; trying Well, part platform the trying to aspect new, business, reach? for upskill what is this creating X is the And you look, -- I there's do to relatively and -- are that is, think what because trying is of have. one, we're a of the where who and more products offerings two digital And technologies. are the number -- sales One a you we you can definitely this medium-term aspects. is the and play that

focusing one that being is X and really the those brand new So we're us. latter the that areas are to

that I side, and when look successful business partners extent look Ferry a And big, not really you'll going we have find distribution historically that further working what distribute they is to that part hasn't attempted. forward, that partners our that something and think I are at a when X-day that an big is And enable help that we're to you very very, believe to the Korn have we On that's IP exercise. growth firms, world-class hard. consulting can developing of ecosystem of that help

now team client a one at that partners. -- right of that's at to a we those In speak, working there's on fact, as

it's more working what we're a of undertaking. expecting that's certainly on hard and very And So it. medium-term I'm

Bob Rozek

bit color that, just would a I little more Gary, on And Toby.

and of landed X rebounded was things of notice about talked that In X and when Digital QX, above deals about nicely One of $X the to back were large and the in where lack deals this of million, quarter, actually we had quarter. north you'll we $XXX,XXX. $X they went million them they X

a of larger So continuing it's the sell function able to also selling be -- deals. to

Gary Burnison

is talk to want to there have conclude of thank and demonstrated and you And Okay. that Amy, we're read opportunity. that's I a continue this single what track seizing going record that's we despite about to everybody. And do. of every what all day,

so Christmas, season, And holidays everybody Happy I Merry -- Hanukkah you everybody. this happy and Thanks, during festive XXXX. in wish we'll talk to [ph],

Operator

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