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Recruiting services catapult Korn Ferry to $700M in quarterly revenue

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Korn Ferry, the Los Angeles-headquartered HR consultancy, generated about $700 million in revenue during its fiscal quarter ended July 31.

Korn Ferry is one of the largest players in its part of the consulting market. The firm, which has more than 10,000 employees worldwide, advises companies on HR tasks such as recruiting executives and creating employee reward programs.

The largest contributor to Korn Ferry’s top line last quarter quarter was its executive search practice. The practice, which specializes in helping firms hire business leaders, accounted for 29% of total revenues or $233 million.

The second largest revenue contributor was the firm’s consulting unit. It generated $166 million in the first quarter, or 24% of Korn Ferry’s sales.

Korn Ferry generates the rest of its fee income from a mix of recruiting and technology services. It also offers a number of software products, including a Salesforce application that gives enterprise sales teams insight into how they can become more productive.

Korn Ferry’s fastest growing unit last quarter was its professional and interim talent practice. The practice, which experienced a 29% year-over-year increase in new business, works with companies to recruit knowledge workers and temporary staff. 

“Our diversification strategy continues to positively influence our results,” remarked Korn Ferry CEO Gary Burnison. “Our Consulting and Digital businesses have never been more meaningful.”

On a regional basis, North America remained Korn Ferry’s most lucrative market in the quarter. Clients in North America accounted for a full 58% of its fee income.

Korn Ferry executives explained in a presentation to shareholders that the company plans to update its growth strategy with a focus on generating more recurring revenue. The firm intends to do that, they detailed, by becoming a “comprehensive organizational consultancy” capable of assisting clients with a large number of different business tasks.

“We are creating more ways to deepen relationships with our clients,” Burnison added.

Korn Ferry closed the quarter with net income of $46.6 million. That works out to diluted earnings of $0.89 per share and adjusted diluted earnings of $0.99.