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Segments | 12 Months Ended
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Apr. 30, 2020
Segment Reporting [Abstract] |
Segments | 11. Segments Over the past year the Company invested in its digital business in order to digitize and harmonize the structure of its IP content and data and to build a technology platform for the efficient delivery of these assets directly to an end consumer or indirectly through a consulting engagement. These investments combined with the recent acquisition of the Acquired Companies resulted in reassessing how the Company manages its Advisory business. Given the Company’s strategy and development of financial and operational metrics for the Consulting and Digital businesses the Company’s chief operating decision maker (“CODM”) had begun to make resource allocation decisions and assess performance separately between Consulting and Digital. Therefore, on November 1, 2019, the Company changed the composition of its global segments, and under the new reporting format, the Advisory segment was separated into two segments, Consulting and Digital. Revenues are directly attributed to a segment and expenses not directly associated with a specific segment are allocated based on the most relevant measures applicable, including revenues, headcount and other factors. Due to this change, the Company completed a qualitative assessment for any potential goodwill impairment both prior and immediately subsequent to the aforementioned change and determined that no impairment indicators were present. Operating results by segment prior to November 1, 2019 have been recast to conform to the new segment reporting. The Company operates through four global segments:
| 1. | Consulting helps clients synchronize their strategy and their talent by addressing four fundamental needs: Organizational Strategy, Assessment and Succession, Leadership and Professional Development, and Rewards and Benefits. This work is supported and underpinned by a comprehensive range of some of the world’s leading lP and data.
| 2. | Digital leverages an artificial intelligence powered platform to identify structure, roles, capabilities and behaviours needed to drive business forward. This end to end system gives clients one enterprise-wide talent framework and delivers an achievable blueprint for success along with the guidance and tools to deliver it.
| 3. | Executive Search helps organizations recruit board level, chief executive and other senior executive and general management talent. Behavioral interviewing and proprietary assessments are used to determine ideal organizational fit, and salary benchmarking builds appropriate frameworks for compensation and retention.
| 4. | RPO and Professional Search combines people, process expertise and IP-enabled technology to deliver enterprise talent acquisition solutions to clients. Transaction sizes range from single professional searches to team, department and line of business projects, and global outsource recruiting solutions.
Executive Search is managed by geographic regional leaders. Worldwide operations for Consulting, Digital, and RPO and Professional Search are managed by their Chief Executive Officers. The Executive Search geographic regional leaders and the Chief Executive Officers of Consulting, Digital, and RPO & Professional Search report directly to the Chief Executive Officer of the Company. The Company also operates a Corporate segment to record global expenses. The Company evaluates performance and allocates resources based on the CODM review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other than temporary impairment). The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies in Note 1—Organization and Summary of Significant Accounting Policies, except the items described above are excluded from EBITDA to arrive at Adjusted EBITDA. The CODM is not provided asset information by reportable segment. Financial highlights by operating segment are as follows:
|  | Year Ended April 30, 2020 |
|  |  |  |  |  |  |  |  |  | Executive Search |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Consulting |  |  | Digital |  |  | North America |  |  | EMEA |  |  | Asia Pacific |  |  | Latin America |  |  | Subtotal |  |  | RPO & Professional Search |  |  | Corporate |  |  | Consolidated |
|  | (in thousands) |
Fee revenue |  | $ | 543,095 |  |  | $ | 292,366 |  |  | $ | 434,624 |  |  | $ | 170,314 |  |  | $ | 98,132 |  |  | $ | 29,400 |  |  | $ | 732,470 |  |  | $ | 364,801 |  |  | $ | — |  |  | $ | 1,932,732 |
Total revenue |  | $ | 557,255 |  |  | $ | 294,261 |  |  | $ | 447,528 |  |  | $ | 172,978 |  |  | $ | 99,209 |  |  | $ | 29,493 |  |  | $ | 749,208 |  |  | $ | 376,606 |  |  | $ | — |  |  | $ | 1,977,330 |
Net income attributable to Korn Ferry |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 104,946 |
Net income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,071 |
Other loss, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,879 |
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 22,184 |
Income tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 43,945 |
Operating income (loss) |  | $ | 17,695 |  |  | $ | 46,909 |  |  | $ | 113,080 |  |  | $ | 21,085 |  |  | $ | 17,914 |  |  | $ | 4,860 |  |  | $ | 156,939 |  |  | $ | 50,438 |  |  | $ | (95,956 | ) |  | $ | 176,025 |
Depreciation and amortization |  |  | 17,567 |  |  |  | 19,261 |  |  |  | 3,452 |  |  |  | 1,713 |  |  |  | 1,311 |  |  |  | 1,182 |  |  |  | 7,658 |  |  |  | 3,906 |  |  |  | 6,919 |  |  |  | 55,311 |
Other income (loss), net |  |  | 1,326 |  |  |  | 485 |  |  |  | (3,051 | ) |  |  | 139 |  |  |  | 11 |  |  |  | 51 |  |  |  | (2,850 | ) |  |  | 82 |  |  |  | (1,922 | ) |  |  | (2,879 | )
EBITDA |  |  | 36,588 |  |  |  | 66,655 |  |  |  | 113,481 |  |  |  | 22,937 |  |  |  | 19,236 |  |  |  | 6,093 |  |  |  | 161,747 |  |  |  | 54,426 |  |  |  | (90,959 | ) |  |  | 228,457 |
Integration/acquisition costs |  |  | — |  |  |  | 5,937 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,215 |  |  |  | 12,152 |
Restructuring charges, net |  |  | 24,504 |  |  |  | 10,481 |  |  |  | 7,244 |  |  |  | 6,347 |  |  |  | 3,649 |  |  |  | 309 |  |  |  | 17,549 |  |  |  | 5,742 |  |  |  | 283 |  |  |  | 58,559 |
Separation costs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,783 |  |  |  | — |  |  |  | — |  |  |  | 1,783 |  |  |  | — |  |  |  | — |  |  |  | 1,783 |
Adjusted EBITDA |  | $ | 61,092 |  |  | $ | 83,073 |  |  | $ | 120,725 |  |  | $ | 31,067 |  |  | $ | 22,885 |  |  | $ | 6,402 |  |  | $ | 181,079 |  |  | $ | 60,168 |  |  | $ | (84,461 | ) |  | $ | 300,951 |
|  | Year Ended April 30, 2019 |
|  |  |  |  |  |  |  |  |  | Executive Search |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Consulting |  |  | Digital |  |  | North America |  |  | EMEA |  |  | Asia Pacific |  |  | Latin America |  |  | Subtotal |  |  | RPO & Professional Search |  |  | Corporate |  |  | Consolidated |
|  | (in thousands) |
Fee revenue |  | $ | 568,321 |  |  | $ | 252,727 |  |  | $ | 455,826 |  |  | $ | 182,829 |  |  | $ | 104,291 |  |  | $ | 31,896 |  |  | $ | 774,842 |  |  | $ | 330,143 |  |  | $ | — |  |  | $ | 1,926,033 |
Total revenue |  | $ | 585,893 |  |  | $ | 252,727 |  |  | $ | 469,743 |  |  | $ | 186,131 |  |  | $ | 105,543 |  |  | $ | 31,960 |  |  | $ | 793,377 |  |  | $ | 341,865 |  |  | $ | — |  |  | $ | 1,973,862 |
Net income attributable to Korn Ferry |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 102,651 |
Net income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,145 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (10,405 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 16,891 |
Income tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 29,544 |
Operating (loss) income |  | $ | (34,115 | ) |  | $ | 39,732 |  |  | $ | 120,754 |  |  | $ | 29,974 |  |  | $ | 24,364 |  |  | $ | 3,998 |  |  | $ | 179,090 |  |  | $ | 50,884 |  |  | $ | (94,765 | ) |  | $ | 140,826 |
Depreciation and amortization |  |  | 16,172 |  |  |  | 12,885 |  |  |  | 3,890 |  |  |  | 1,254 |  |  |  | 1,428 |  |  |  | 410 |  |  |  | 6,982 |  |  |  | 3,255 |  |  |  | 7,195 |  |  |  | 46,489 |
Other income (loss), net |  |  | 2,203 |  |  |  | 995 |  |  |  | 6,699 |  |  |  | 432 |  |  |  | 281 |  |  |  | 322 |  |  |  | 7,734 |  |  |  | 268 |  |  |  | (795 | ) |  |  | 10,405 |
EBITDA |  |  | (15,740 | ) |  |  | 53,612 |  |  |  | 131,343 |  |  |  | 31,660 |  |  |  | 26,073 |  |  |  | 4,730 |  |  |  | 193,806 |  |  |  | 54,407 |  |  |  | (88,365 | ) |  |  | 197,720 |
Integration/acquisition costs |  |  | 5,304 |  |  |  | 1,255 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 187 |  |  |  | 6,746 |
Tradename write-offs |  |  | 76,967 |  |  |  | 29,588 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 106,555 |
Adjusted EBITDA |  | $ | 66,531 |  |  | $ | 84,455 |  |  | $ | 131,343 |  |  | $ | 31,660 |  |  | $ | 26,073 |  |  | $ | 4,730 |  |  | $ | 193,806 |  |  | $ | 54,407 |  |  | $ | (88,178 | ) |  | $ | 311,021 |
|  | Year Ended April 30, 2018 |
|  |  |  |  |  |  |  |  |  | Executive Search |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Consulting |  |  | Digital |  |  | North America |  |  | EMEA |  |  | Asia Pacific |  |  | Latin America |  |  | Subtotal |  |  | RPO & Professional Search |  |  | Corporate |  |  | Consolidated |
|  | (in thousands) |
Fee revenue |  | $ | 540,529 |  |  | $ | 244,484 |  |  | $ | 408,098 |  |  | $ | 173,725 |  |  | $ | 96,595 |  |  | $ | 30,624 |  |  | $ | 709,042 |  |  | $ | 273,162 |  |  | $ | — |  |  | $ | 1,767,217 |
Total revenue |  | $ | 556,521 |  |  | $ | 244,484 |  |  | $ | 421,260 |  |  | $ | 177,234 |  |  | $ | 98,062 |  |  | $ | 30,717 |  |  | $ | 727,273 |  |  | $ | 291,241 |  |  | $ | — |  |  | $ | 1,819,519 |
Net income attributable to Korn Ferry |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 133,779 |
Net income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,118 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (11,416 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 13,832 |
Income tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 70,133 |
Operating income (loss) |  | $ | 22,408 |  |  | $ | 78,127 |  |  | $ | 100,397 |  |  | $ | 26,768 |  |  | $ | 18,425 |  |  | $ | 4,022 |  |  | $ | 149,612 |  |  | $ | 39,396 |  |  | $ | (81,097 | ) |  | $ | 208,446 |
Depreciation and amortization |  |  | 18,954 |  |  |  | 12,573 |  |  |  | 3,930 |  |  |  | 1,689 |  |  |  | 1,408 |  |  |  | 455 |  |  |  | 7,482 |  |  |  | 3,054 |  |  |  | 6,525 |  |  |  | 48,588 |
Other income, net |  |  | 2,127 |  |  |  | 374 |  |  |  | 1,142 |  |  |  | 168 |  |  |  | 373 |  |  |  | 181 |  |  |  | 1,864 |  |  |  | 152 |  |  |  | 6,899 |  |  |  | 11,416 |
EBITDA |  |  | 43,489 |  |  |  | 91,074 |  |  |  | 105,469 |  |  |  | 28,625 |  |  |  | 20,206 |  |  |  | 4,658 |  |  |  | 158,958 |  |  |  | 42,602 |  |  |  | (67,673 | ) |  |  | 268,450 |
Restructuring (recoveries) charges, net |  |  | (122 | ) |  |  | (119 | ) |  |  | — |  |  |  | — |  |  |  | 313 |  |  |  | — |  |  |  | 313 |  |  |  | 6 |  |  |  | — |  |  |  | 78 |
Integration/acquisition costs |  |  | 7,724 |  |  |  | 1,427 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 279 |  |  |  | 9,430 |
Adjusted EBITDA |  | $ | 51,091 |  |  | $ | 92,382 |  |  | $ | 105,469 |  |  | $ | 28,625 |  |  | $ | 20,519 |  |  | $ | 4,658 |  |  | $ | 159,271 |  |  | $ | 42,608 |  |  | $ | (67,394 | ) |  | $ | 277,958 |
Fee revenue attributed to an individual customer or country, other than the U.S. and United Kingdom, did not account for more than 10% of the total fee revenue in fiscal 2020, 2019 or 2018. Fee revenue classified by country in which the Company derives revenues are as follows:
|  | Year Ended April 30, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
U.S. |  | $ | 875,605 |  |  | $ | 859,969 |  |  | $ | 778,470 |
United Kingdom |  |  | 204,271 |  |  |  | 202,055 |  |  |  | 176,091 |
Other countries |  |  | 852,856 |  |  |  | 864,009 |  |  |  | 812,656 |
Total fee revenue |  | $ | 1,932,732 |  |  | $ | 1,926,033 |  |  | $ | 1,767,217 |
Other than the U.S. and United Kingdom, no single country had over 10% of the total long-lived assets, excluding financial instruments and tax assets. Long-lived assets, excluding financial instruments and tax assets, classified by location of the controlling statutory country are as follows:
|  | Year Ended April 30, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |
U.S. (1) |  | $ | 169,928 |  |  | $ | 98,455 |  |  | $ | 80,424 |
United Kingdom |  |  | 35,739 |  |  |  | 6,466 |  |  |  | 7,792 |
Other countries |  |  | 132,138 |  |  |  | 26,584 |  |  |  | 31,685 |
Total long-lived assets |  | $ | 337,805 |  |  | $ | 131,505 |  |  | $ | 119,901 |
(1) | Includes Corporate long-lived assets

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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