Korn Ferry Q4: 1.5% Revenue Growth, New Technology Investments, Dividend Hike, Street-Missing Q1 Forecast & More

Korn Ferry KFY reported fourth-quarter FY23 total revenue growth of 1.5% year-over-year to $738.12 million, beating the consensus of $703.40 million. Adjusted EPS of $1.01 came in line with the estimate.

Fee revenue was $730.9 million, an increase of 1% Y/Y.

Operating margin was 9.9% in Q4, compared to 19.2% in the year-ago quarter. Adjusted EBITDA margin was 13.4% in Q4, compared to 20.0% in the year-ago quarter. 

Operating margin and Adjusted EBITDA margin decreased primarily due to a change in fee revenue mix, with fee revenue decreasing in Executive Search and Permanent Placement, which have higher margins.

Gary D. Burnison, the CEO, said, "With a world immersed in Generative AI, Korn Ferry will continue to invest not only in these technologies, but also in advancing our proprietary data, assessment instruments and knowledge as these will be the ultimate differentiators."

The company exited the quarter with cash and equivalents worth $888.8 million. The company's long-term debt as of quarter-end totaled $396.19 million.

Dividend Hike: On June 26, 2023, the company increased its regular quarterly cash dividend by 20% to $0.18 per share, payable on July 31, to stockholders of record on July 7.

Q1 Outlook: Korn Ferry Expects Q1 Adjusted EPS Of $0.84-$1.00 versus consensus $1.02

Fee revenue is expected to be in the range of $668 million-$698 million.

Price Action: KFY shares are trading lower by 4.17% to $48.76 on the last check Tuesday.