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HR consulting behemoth Korn Ferry had a reasonably strong fourth quarter with fee revenues of $730.9 million.
That represents a 3% year-over-year increase, which is a fairly unremarkable result. But the fourth quarter report is nonetheless notable because it fills in the final puzzle piece of Korn Ferry’s full-year earnings data, which packs quite a few newsworthy insights into the firm’s business.
Los Angeles-headquartered Korn Ferry is unusual among the major management consultancies in that it limits its focus to one specific market: the HR space. But because that market is quite broad, the firm’s activities span many aspects of its corporate clients’ business.
When a firm wants to add 50 new employees to supercharge its sales growth, it needs to figure out what those employees will be doing after they’re onboarded. Companies hire Korn Ferry to do the thinking for them and figure out the optimal way to distribute work tasks among new employees.
Korn Ferry’s other HR services range from the mundane to the highly specialized.
The firm helps companies recruit talent and develop employee compensation strategies. It can take far more complex tasks as well, such as planning how a firm’s leadership change will unfold when the CEO decides to retire.
Korn Ferry logged $2,835.4 billion in total revenue during its fiscal year ended April 30. That’s an impressive 12% year-over-year increase, or four times the growth the firm achieved in the fourth quarter.
A part of that year-over-year sales gain was driven by a pair of interim talent recruiting firms Korn Ferry acquired in the past 18 months. It turned those firms into an interim recruiting unit that is now generating more than $400 million in annual revenue on a run-rate basis.
Korn Ferry’s relatively new digital business was also a contributor to its fiscal 2023 success story. This business sells software, including AI tools, that clients can use to speed up HR-related tasks such as creating employee surveys and defining job descriptions.
“The story of this period though is really about the success of our diversification strategy, set forth over the past few years, which has created new revenue streams and offerings, as clearly evidenced by our clients and in our results,” remarked Korn Ferry CEO Gary Burnison.
Out of the $2.835.4 billion in fee income Korn Ferry brought home during fiscal 2023, $316.3 million was left over as operating income. Adjusted diluted earnings per share worked out to $4.94.