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Segments | 9 Months Ended
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Jan. 31, 2021
Segment Reporting [Abstract] |
Segments | 11. Segments The Company has invested in its digital business over the past year 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 acquisition of the Acquired Companies, resulted in a reassessment in the third quarter of fiscal 2020 of how the Company managed its former 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. The Company operates through four lines of business:
| 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 behaviors 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’s review of 1) fee revenue and 2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such costs or charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other impairment charges). The CODM is not provided asset information by reportable segment. Financial highlights by operating segments are as follows:
|  | Three Months Ended January 31, 2021 |
|  |  |  |  |  |  |  |  |  | Executive Search |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Consulting |  |  | Digital |  |  | North America |  |  | EMEA |  |  | Asia Pacific |  |  | Latin America |  |  | Subtotal |  |  | RPO & Professional Search |  |  | Corporate |  |  | Consolidated |
|  | (in thousands) |
Fee revenue |  | $ | 136,268 |  |  | $ | 75,791 |  |  | $ | 106,002 |  |  | $ | 35,991 |  |  | $ | 21,643 |  |  | $ | 4,468 |  |  | $ | 168,104 |  |  | $ | 95,197 |  |  | $ | — |  |  | $ | 475,360 |
Total revenue |  | $ | 136,593 |  |  | $ | 75,967 |  |  | $ | 106,325 |  |  | $ | 36,016 |  |  | $ | 21,680 |  |  | $ | 4,468 |  |  | $ | 168,489 |  |  | $ | 96,831 |  |  | $ | — |  |  | $ | 477,880 |
Net income attributable to Korn Ferry |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 51,319 |
Net income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 269 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (14,935 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 7,298 |
Income tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 21,204 |
Operating income (loss) |  | $ | 22,175 |  |  | $ | 19,214 |  |  | $ | 17,655 |  |  | $ | 3,114 |  |  | $ | 5,844 |  |  | $ | 264 |  |  | $ | 26,877 |  |  | $ | 18,360 |  |  | $ | (21,471 | ) |  | $ | 65,155 |
Depreciation and amortization |  |  | 4,051 |  |  |  | 7,403 |  |  |  | 680 |  |  |  | 345 |  |  |  | 231 |  |  |  | 193 |  |  |  | 1,449 |  |  |  | 929 |  |  |  | 1,903 |  |  |  | 15,735 |
Other income, net |  |  | 943 |  |  |  | 494 |  |  |  | 12,611 |  |  |  | 61 |  |  |  | 323 |  |  |  | 1 |  |  |  | 12,996 |  |  |  | 242 |  |  |  | 260 |  |  |  | 14,935 |
Restructuring, charges, net |  |  | 346 |  |  |  | 23 |  |  |  | (5 | ) |  |  | 398 |  |  |  | (23 | ) |  |  | — |  |  |  | 370 |  |  |  | 99 |  |  |  | — |  |  |  | 838 |
Adjusted EBITDA |  | $ | 27,515 |  |  | $ | 27,134 |  |  | $ | 30,941 |  |  | $ | 3,918 |  |  | $ | 6,375 |  |  | $ | 458 |  |  | $ | 41,692 |  |  | $ | 19,630 |  |  | $ | (19,308 | ) |  | $ | 96,663 |
|  | Three Months Ended January 31, 2020 |
|  |  |  |  |  |  |  |  |  | Executive Search |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Consulting |  |  | Digital |  |  | North America |  |  | EMEA |  |  | Asia Pacific |  |  | Latin America |  |  | Subtotal |  |  | RPO & Professional Search |  |  | Corporate |  |  | Consolidated |
|  | (in thousands) |
Fee revenue |  | $ | 140,525 |  |  | $ | 99,389 |  |  | $ | 106,888 |  |  | $ | 44,301 |  |  | $ | 25,089 |  |  | $ | 7,283 |  |  | $ | 183,561 |  |  | $ | 91,850 |  |  | $ | — |  |  | $ | 515,325 |
Total revenue |  | $ | 144,298 |  |  | $ | 100,663 |  |  | $ | 110,230 |  |  | $ | 45,077 |  |  | $ | 25,365 |  |  | $ | 7,351 |  |  | $ | 188,023 |  |  | $ | 94,995 |  |  | $ | — |  |  | $ | 527,979 |
Net income attributable to Korn Ferry |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 19,993 |
Net income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 963 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (5,055 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6,919 |
Income tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 8,775 |
Operating income (loss) |  | $ | 2,663 |  |  | $ | 8,463 |  |  | $ | 21,808 |  |  | $ | 4,644 |  |  | $ | 5,070 |  |  | $ | 1,198 |  |  | $ | 32,720 |  |  | $ | 14,144 |  |  | $ | (26,395 | ) |  | $ | 31,595 |
Depreciation and amortization |  |  | 4,417 |  |  |  | 5,832 |  |  |  | 847 |  |  |  | 422 |  |  |  | 329 |  |  |  | 295 |  |  |  | 1,893 |  |  |  | 979 |  |  |  | 1,742 |  |  |  | 14,863 |
Other income (loss), net |  |  | 558 |  |  |  | 193 |  |  |  | 3,963 |  |  |  | 29 |  |  |  | 106 |  |  |  | 162 |  |  |  | 4,260 |  |  |  | 88 |  |  |  | (44 | ) |  |  | 5,055 |
Integration/acquisition costs |  |  | — |  |  |  | 4,332 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,372 |  |  |  | 6,704 |
Restructuring, charges, net |  |  | 11,061 |  |  |  | 7,032 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 18,093 |
Separation costs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,783 |  |  |  | — |  |  |  | — |  |  |  | 1,783 |  |  |  | — |  |  |  | — |  |  |  | 1,783 |
Adjusted EBITDA |  | $ | 18,699 |  |  | $ | 25,852 |  |  | $ | 26,618 |  |  | $ | 6,878 |  |  | $ | 5,505 |  |  | $ | 1,655 |  |  | $ | 40,656 |  |  | $ | 15,211 |  |  | $ | (22,325 | ) |  | $ | 78,093 |
|  | Nine Months Ended January 31, 2021 |
|  |  |  |  |  |  |  |  |  | Executive Search |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Consulting |  |  | Digital |  |  | North America |  |  | EMEA |  |  | Asia Pacific |  |  | Latin America |  |  | Subtotal |  |  | RPO & Professional Search |  |  | Corporate |  |  | Consolidated |
|  | (in thousands) |
Fee revenue |  | $ | 362,271 |  |  | $ | 206,807 |  |  | $ | 266,485 |  |  | $ | 97,701 |  |  | $ | 59,702 |  |  | $ | 12,419 |  |  | $ | 436,307 |  |  | $ | 249,511 |  |  | $ | — |  |  | $ | 1,254,896 |
Total revenue |  | $ | 363,234 |  |  | $ | 207,027 |  |  | $ | 267,790 |  |  | $ | 97,925 |  |  | $ | 59,840 |  |  | $ | 12,419 |  |  | $ | 437,974 |  |  | $ | 254,317 |  |  | $ | — |  |  | $ | 1,262,552 |
Net income attributable to Korn Ferry |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 48,264 |
Net income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 547 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (26,374 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 21,686 |
Income tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 25,409 |
Operating income (loss) |  | $ | 25,869 |  |  | $ | 32,410 |  |  | $ | 32,411 |  |  | $ | (1,596 | ) |  | $ | 9,958 |  |  | $ | (578 | ) |  | $ | 40,195 |  |  | $ | 33,027 |  |  | $ | (61,969 | ) |  | $ | 69,532 |
Depreciation and amortization |  |  | 12,123 |  |  |  | 21,134 |  |  |  | 2,126 |  |  |  | 1,062 |  |  |  | 756 |  |  |  | 597 |  |  |  | 4,541 |  |  |  | 2,814 |  |  |  | 5,456 |  |  |  | 46,068 |
Other income (loss), net |  |  | 2,067 |  |  |  | 1,114 |  |  |  | 21,944 |  |  |  | 111 |  |  |  | 715 |  |  |  | 56 |  |  |  | 22,826 |  |  |  | 462 |  |  |  | (95 | ) |  |  | 26,374 |
Integration/acquisition costs |  |  | — |  |  |  | 556 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 181 |  |  |  | 737 |
Restructuring charges, net |  |  | 14,223 |  |  |  | 2,947 |  |  |  | 958 |  |  |  | 8,868 |  |  |  | 181 |  |  |  | 405 |  |  |  | 10,412 |  |  |  | 3,150 |  |  |  | — |  |  |  | 30,732 |
Adjusted EBITDA |  | $ | 54,282 |  |  | $ | 58,161 |  |  | $ | 57,439 |  |  | $ | 8,445 |  |  | $ | 11,610 |  |  | $ | 480 |  |  | $ | 77,974 |  |  | $ | 39,453 |  |  | $ | (56,427 | ) |  | $ | 173,443 |
|  | Nine Months Ended January 31, 2020 |
|  |  |  |  |  |  |  |  |  | Executive Search |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Consulting |  |  | Digital |  |  | North America |  |  | EMEA |  |  | Asia Pacific |  |  | Latin America |  |  | Subtotal |  |  | RPO & Professional Search |  |  | Corporate |  |  | Consolidated |
|  | (in thousands) |
Fee revenue |  | $ | 422,103 |  |  | $ | 223,097 |  |  | $ | 332,428 |  |  | $ | 130,652 |  |  | $ | 78,395 |  |  | $ | 23,140 |  |  | $ | 564,615 |  |  | $ | 282,448 |  |  | $ | — |  |  | $ | 1,492,263 |
Total revenue |  | $ | 433,832 |  |  | $ | 224,371 |  |  | $ | 342,753 |  |  | $ | 132,830 |  |  | $ | 79,201 |  |  | $ | 23,211 |  |  | $ | 577,995 |  |  | $ | 292,156 |  |  | $ | — |  |  | $ | 1,528,354 |
Net income attributable to Korn Ferry |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 105,748 |
Net income attributable to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,890 |
Other income, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (8,014 | )
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 15,186 |
Income tax provision |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 38,988 |
Operating income (loss) |  | $ | 24,272 |  |  | $ | 41,036 |  |  | $ | 80,254 |  |  | $ | 18,466 |  |  | $ | 17,866 |  |  | $ | 2,999 |  |  | $ | 119,585 |  |  | $ | 44,279 |  |  | $ | (75,374 | ) |  | $ | 153,798 |
Depreciation and amortization |  |  | 13,188 |  |  |  | 13,156 |  |  |  | 2,617 |  |  |  | 1,328 |  |  |  | 1,004 |  |  |  | 938 |  |  |  | 5,887 |  |  |  | 2,961 |  |  |  | 5,163 |  |  |  | 40,355 |
Other income (loss), net |  |  | 1,469 |  |  |  | 528 |  |  |  | 5,740 |  |  |  | 148 |  |  |  | 193 |  |  |  | 249 |  |  |  | 6,330 |  |  |  | 216 |  |  |  | (529 | ) |  |  | 8,014 |
Integration/acquisition costs |  |  | — |  |  |  | 4,332 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,987 |  |  |  | 9,319 |
Restructuring charges, net |  |  | 11,061 |  |  |  | 7,032 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 18,093 |
Separation costs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,783 |  |  |  | — |  |  |  | — |  |  |  | 1,783 |  |  |  | — |  |  |  | — |  |  |  | 1,783 |
Adjusted EBITDA |  | $ | 49,990 |  |  | $ | 66,084 |  |  | $ | 88,611 |  |  | $ | 21,725 |  |  | $ | 19,063 |  |  | $ | 4,186 |  |  | $ | 133,585 |  |  | $ | 47,456 |  |  | $ | (65,753 | ) |  | $ | 231,362 |

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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