Korn Ferry

Ladies and gentlemen, thank you for standing by and welcome to the Korn Ferry second quarter fiscal year 2025 conference call. At this time, all participants are in a listen-only mode. Following the prepared remarks, we will conduct a question and answer session. As a reminder, this conference call 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 will be reviewing with you today. Before I turn the call over to your host, Mr. Gary Bernerson, let me first read a cautionary statement to investors. Certain statements made in the call today, such as those relating to future performances, plans, and goals, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, investors are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from those currently expected or desired because of the number of risks and uncertainties which are beyond the company's control. Additional information concerning such risks and uncertainties can be found in the release relating to this presentation and in the periodic and other reports filed by the company with the SEC. including the company's annual report for fiscal year 2024 and in the company's soon-to-be-filed quarterly report for the quarter ended October 31, 2024. Also, some of the comments today may reference non-GAAP financial measures such as constant currency amounts, EBITDA, and adjusted EBITDA. Additional information concerning measures including reconciliations to the most directly comparable GAAP financial measure is contained in the financial presentation and earnings release relating to this call, both of which are posted in the investor relations section of the company's website at www.cornferry.com. With that, I'll turn the call over to Mr. Burnison. Please go ahead, Mr. Burnison.

Okay, thank you, Leah. Good afternoon, everybody. Thank you for joining us in Season's Greetings. The team's going to get into the results in more detail, but Overall, I would say our execution has been outstanding. Earnings and profitability increased year over year. And sequentially, the margin over the EBITDA margin over 17% is our sixth consecutive quarter of profitability improvement. And the diversification of our business was evident, again, in the quarter. Stability and our talent acquisition digital new business trends improving, and steady performance in consulting. And we also continue to invest. For example, over the last several quarters, we've made significant investments to productize our IP and proprietary data assets, including the 100 million assessments we have, 10,000 success profiles, rewards data on 28 million people covering 30,000 organizations, and all of that enables our clients to maximize their talent in organizational performance at scale. And part of that investment was reimagining and developing a new HR integrated software platform, the Korn Ferry Talent Suite, which we launched in the quarter. and reflects our commitment to invest in and expand our highly differentiated IP and products. The talent suite brings together all of our talent management capabilities, our assessment data, development data, reward solutions, allowing our clients to license our decades of expertise, proprietary insights, and data-driven intelligence services. via subscription agreements to power their decisions. The move is pivotal for all parts of our organization, a connected approach with stronger market presence and actually more impactful solutions. And we also made an investment in the quarter that I'm really excited about, Trilogy International, which substantially expands our interim professional offerings to EMEA. and North America. With its digital and technology-focused, Trilogy operates at the forefront of change in a large, addressable market for us. We're also continuing to focus on our marquee and regional account strategy. That represents 38% of our portfolio, and almost all of our marquee clients use at least three of our service offerings. And finally, It's our own people strategy with global colleagues who continue to operate at high performance levels while we also attract and develop additional talent required to actualize our strategy. And finally, for any organization, the journey begins with the why. And for Korn Ferry, the why is to enable people and organizations to be more than I'm joined today by Tiffany, Greg, and Bob, and I'll have them get into a little bit more detail here, then we'd be happy to obviously take your questions. Bob, over to you.

Great. Thanks, Gary. Good afternoon and good morning. As Gary said, we're pleased with our results for the second quarter of FY25. You know, we continue to carefully guide our business through this period of uncertainty, managing what we can control, in delivering improvements in profitability for now six consecutive quarters. In short, we've continued to successfully execute our strategic plan, capitalizing on our unique solution sets while focusing on cost discipline and operating productivity, which has positioned our business with much greater capacity for investment and growth going forward. As I said, our adjusted EBITDA margin has now increased for six consecutive quarters, and is up 340 basis points year-over-year as bill rates have remained strong and employee productivity continues to improve. Our interim bill rates grew year-over-year by 11 percent, and our consulting bill rate was steady at almost $420 an hour. Our overall productivity as measured by fee revenue per employee is now 35 percent higher than pre-pandemic levels. Our top line growth trends continue to show early signs of improvement with second quarter consolidated fee revenue of about $674 million, with all lines of business showing sequential growth or stability. Consolidated new business growth also improved in the second quarter and was down less than 1% year over year, but up 3% sequentially. New business for executive search and digital were strong in the second quarter, up 4 percent and 11 percent year-over-year, respectively. We also continue to effectively deploy capital, and that includes the return of capital to shareholders. It's a priority for us. In the second quarter, we repurchased $33 million of stock, or about 456,000 shares. And in addition, we paid a quarterly dividend of 37 cents per share. Now, we remain confident that we can maintain our current level of profitability while investing in both consultant additions, as well as the capital investments targeted at capturing future growth that Gary referred to. Now, let me return the call back over to Greg, who can take us through some of the overall company financial highlights.