Q1 2025 Korn Ferry Earnings Call

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Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Korn Ferry First 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.

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Speaker Change: Ladies and gentlemen, thank you for standing by, and welcome to the corn fairy's first quarter, fiscal year, 2025 conference call. At this time, all participants are in a listen-only mode. Following the prepare remarks, we will conduct a question and answer session. As a reminder, this conference call is being recorded for replay purposes.

Speaker Change: We have also made available in the investor relations section of our website at cornfairy.com A copy of the financial presentation that we will be reviewing with you today.

Operator: Before I turn the call over to your host, Mr. Gary Burnison, let me first read a cautionary statement to investors. Certain statements made in the call today, such as those relating to future performance, 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 a number of risks and uncertainties, which are beyond the company's control.

Speaker Change: Look, before I turn the call over to your host, Mr. Gary Burnison, let me first read a cautionary statement to investors.

Speaker Change: Certain statements made in the call today, such as those relating to future performance, plans and goals constitute forward-looking statements within the meaning of the private security's litigation reform act of 1995.

Speaker Change: Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, investors are caution not to place undue reliance on such statements.

Speaker Change: Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties which are beyond the company's control.

Operator: 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 July 31, 2024.

Speaker Change: Additional information concerning such risks and uncertainties.

Speaker Change: Can be found in the release relating to this presentation and in the periodic and other reports.

Speaker Change: Files 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 July 31, 2024.

Operator: Also, some of the comments today may reference non-GAAP financial measures, such as constant currency amounts, EBITDA, and adjusted EBITDA. Additional information concerning these measures, including reconciliation 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.cornfairy.com.

Speaker Change: Also, some of the comments today may reference non-gap financial measures, such as constant currency amounts.

Speaker Change: Imitar and adjusted Imitar.

Speaker Change: Additional information concerning these measures, including reconfiliations to the most directly comparable gap financial measure, is contained in the financial presentation and earnings release relating to this call.

Speaker Change: Both of which are posted in the investor relations section of the company's website at www.corneferry.com With that I'll turn the call over to Mr. Burnison, please go ahead Mr. Burnison

Gary Burnison: With that, I'll turn the call over to Mr. Bernison. Please go ahead, Mr. Bernison.

Gary Burnison: Okay, thank you, Lea, and hello everybody. Thanks for joining us. Tiffany, Greg, and Bob are going to get into the quarterly results. But I first, you know, as we were looking at the results, and this is now my, I think, 89th quarterly earnings call, I was reflecting on how far we've come, particularly over the last several quarters. And what I first described exactly a year ago as a multi-quarter economic reset in many countries around the world, and as I reflect on that, I'm more convinced than ever about how capable we've become and the opportunity ahead of us.

Mr. Burnison: Okay, thank you, Leon and hello everybody. Thanks for joining us.

Speaker Change: Gregg and Bob are going to get into the quarterly results.

Speaker Change: But I first, you know, as we were looking at the results and this is now my, I think, 89th quarterly earnings call, I was reflecting on how far we've come, particularly over the last several quarters.

Speaker Change: and what I first described exactly a year ago.

Speaker Change: As a multi-quarter economic reset in many countries around the world, and as I reflect on that, I'm more convinced than ever about how capable we've become in the opportunity ahead of us.

Gary Burnison: From sport to industry, we're operating in the market at its highest level in over five decades and over five years.

Speaker Change: from Sport to Industry, we're operating in the market at its highest level in over five decades in business.

Gary Burnison: Business. I can remember the first acquisition we did in our consulting and digital offerings. It doubled the revenue of the business to about $30 million. Today, those solutions are almost a billion one and continue to generate positive momentum. We didn't have an interim offering before the pandemic. Today, that solution is generating almost 300 million in revenue and capping not only a large addressable market, but one that is extremely synergistic to our brand. Further, more recently, we've seen improved growth in executive search, and we're experiencing stable trends across professional search in RPO. Our marquee and regional accounts are 37% of our portfolio; cross referrals are about 27% of our revenue. Consulting rates have increased by over a third over the last few years.

Speaker Change: You know, I can remember the first acquisition we get in our consulting and digital offerings. We doubled the revenue of the business to about $30 million.

Speaker Change: Today, those solutions are almost a billion-one and continue to generate positive momentum.

Speaker Change: We didn't have an interim offering before the pandemic. Today that solution is generating almost 300 million in revenue.

Speaker Change: and capping not only a large, addressable market, but one that is extremely synergistic to our brand.

Speaker Change: Further, more recently, we've seen improved growth and executive search, and we're experiencing stable trends across professional search and RPO. Our Marquee and Regional Accounts.

Speaker Change: 37% of our portfolio, cross referrals are about 27% of our revenue, consulting rates have increased by over a third over the last few years. We're reflecting the value of our solutions and out the agreements.

Gary Burnison: We're reflecting the value of our solutions and SaaS agreements now exceed a third of our digital new business, and as importantly, we've added tremendous IP to our more than 100 million assessments, more than 10,000 success profiles, rewards data on 28 million people covering 30,000 organizations, and leading edge technology deployed in our RPO offerings.

Operator: Ladies and gentlemen, thank you for standing by and welcome to the Korn-Ferry first 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.

Speaker Change: Now exceed a third of our digital new business and as importantly we've added tremendous IT.

Speaker Change: To our more than 100 million assessments, more than 10,000 success profiles, rewards data on 28 million people covering 30,000 organizations.

Gary Burnison: So yeah, I'm very optimistic about our future. The result clearly demonstrates that our strategy is working; our top line is more than 30% higher than before the pandemic, which at that time was already an all-time high, and now with even greater profitability. We are proving that we can leverage and extend our brand and deliver diverse offerings with unparalleled IP and incredible colleagues and expertise across our firm to drive even deeper impact for our clients. And our confidence is also reflected in our capital allocation, which not only included share buybacks but also more than a two-fold increase in our quarterly dividend year over year.

Speaker Change: and Leading Edge Technology deployed in our RPO offering. So yeah, I'm very optimistic about our future.

Operator: Before I turn the call over to your host, Mr. Gary Burnison, let me first read a cautionary statement to investors. Certain statements made in the call today, such as those relating to future performance, plans and goals, constitute forward-looking statements within the meaning of the Private Security's 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.

Speaker Change: The results clearly demonstrates that our strategy is working, our top line is more than 30% higher than before the pandemic, which is that time was already an all-time high, and now with even greater profitability.

Speaker Change: We are proving that we can leverage and extend our brand and deliver diverse offerings.

Speaker Change: with unparalleled IP and incredible colleagues in expertise across our firm to drive even deeper impact for our clients and our confidence is also reflected in our capital allocation.

Operator: Actual results in future periods may differ materially from those currently expected or desired because of a 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 companies soon to be filed, quarterly report for the quarter ended July 31, 2024.

Speaker Change: which not only included share-by-backs but also more than a two-fold increase in our quarterly dividend year over year. This is just the beginning for Quorum Ferry. I'm convinced that we're only scratching the surface of tapping into an estimated $300 billion market opportunity.

Gary Burnison: This is just the beginning for Corn Fairy. I'm convinced that we're only estimated $300 billion market opportunities.

Gary Burnison: And going forward to capitalize on that opportunity, our strategy will be anchored on five strategic colors. Number one is our go-to-market approach. And nowhere is that more pronounced than with our market and regional accounts, in which almost all of our market clients use at least three of our service offerings and benefit from our IP full suite of offerings and expertise. Second, innovation in IP; our continued investments in IP are giving clients a shared language to describe what great organizations and talent look like. And we're embedding that language across their enterprise and throughout their talent, assessment, coaching, and development process.

Speaker Change: and going forward to capitalize on that opportunity, our strategy will be anchored on five strategic colors. Number one is our go-to market approach and nowhere is that more pronounced than with our key and regional attempts.

Operator: Also, some of the comments today may reference non-GAP financial measures, such as constant currency amounts, EBITDA, and adjusted EBITDA. Additional information concerning these measures, including reconciliation to the most directly comparable GAP 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.

Speaker Change: In which almost all of our marquee clients use at least three of our service offerings, and benefit from our IP, full suite of offerings and expertise, second innovation and IP.

Speaker Change: Our continued investments in IP are giving clients a shared language to describe what gray organizations and talent look like.

Speaker Change: and we're embedding that land which across their enterprise and throughout their talent, assessment, coaching and development processes. Third, our brand, which is a permission brand.

Gary Burnison: Services. Third, our brand, which is a permission brand and just an incredible asset. We are the voice of talent, leadership, and organizational strategy. Fourth, M&A, we're going to continue to explore synergistic and brand-adjacent opportunities. And finally, it's all about our colleagues, investing in and developing our own talent, and providing growth opportunities. Fundamentally, none of us know our potential unless we're given opportunity. And our firm fits at the intersection of organizations, their strategy, and their talent to create that opportunity. That's what it's all about. Synchronizing talent and strategy to drive superior performance, and enabling people and client organizations to be more than.

Operator: With that, I'll turn the call over to Mr. Bernison. Please go ahead, Mr. Bernison.

Gary Burnison: Okay, thank you, Lea, and hello, everybody. Thanks for joining us. Tiffany, Greg, and Bob are going to get into the quarterly results.

Justin: and Justin Incredible after us. We are the boys.

Speaker Change: of talent, leadership.

Gary Burnison: But I first, you know, as we were looking at the results, and this is now my, I think, 89th quarterly earnings call, I was reflecting on how far we've come, particularly over the last several quarters. And what I first described exactly a year ago as a multi-quarter economic reset in many countries around the world, and as I reflect on that, I'm more convinced than ever about how capable we've become and the opportunity ahead of us.

Speaker Change: and Organizational Strategy. Fourth M&A, we're going to continue to explore synergistic and brand adjacent opportunities. And finally,

Speaker Change: It's all about our colleagues, investing in and developing our own talent and providing growth opportunities. You know, fundamentally none of us.

Speaker Change: Now, our potential, unless we're given opportunity, and our firm sits at the intersection.

Speaker Change: of organizations, their strategy, and their talent to create that opportunity. That's what it's all about. Synchronizing talent and strategy to drive superior performance.

Gary Burnison: From sport to industry, we're operating in the market at its highest level in over five decades in business. I can remember the first acquisition we did in our consulting and digital offerings. It doubled the revenue of the business to about $30 million. Today those solutions are almost a billion one and continue to generate positive momentum. We didn't have an interim offering before the pandemic. Today that solution is generating almost 300 million in revenue and capping not only a large addressable market but one that is extremely synergistic to our brand.

Speaker Change: and enabling people and client organizations to be more than.

Bob Rozek: With that, Bob, I'll turn it over to you. Great. Thanks, Gary, and good afternoon, a good morning. So our results for the first quarter are really a strong start to our new fiscal year; both fee revenue and profitability met or exceeded the high end of our guidance. Our Justice Evidam margin expanded for the fifth consecutive quarter. Our consulting and interim bill rates grew year over year by eight percent and nine percent, respectively. And our employee productivity, which we measured by fee revenue per head count, is now 36 percent higher than it was pre-pandemic. You know, given the current business environment, this quarter was another opportunity to validate our long-term strategy.

Speaker Change: With that, Bob I'll turn it over to you.

Bob: Great, thanks, Gary, and good afternoon and good morning. So, our results for the first quarter are really a strong start to our new fiscal year, both fee revenue and profitability, met or exceeded the high end of our guidance.

Bob: are just that even down margin expanded for the fifth consecutive quarter, are consulting and interim bill rates grew year over year by 8% and 9% respectively.

Speaker Change: and her employee productivity, which we measure by fee revenue for headcount, is now 36% higher than it was pre-pandemic.

Gary Burnison: Further more recently we've seen improved growth in executive search and we're experiencing stable trends across professional search in RPO. Our marquee and regional accounts at 37% of our portfolio. Cross referrals are about 27% of our revenue consulting. Starting rates have increased by over a third over the last few years. Reflecting the value of our solutions and SaaS agreements now exceed a third of our digital new business. And as importantly we've added tremendous IP to our more than 100 million assessments, more than 10,000 success profiles. Rewards data on 28 million people covering 30,000 organizations and leading edge technology deployed in our RPO offering.

Speaker Change: You know, given the current business environment, this quarter was another opportunity to validate our long-term strategy and quite simply we delivered.

Bob Rozek: And quite simply, we delivered. We continued to successfully execute our plan, delivering value to our clients through unique and differentiated solutions, and really reinforcing our position as one of the most trusted brands in organizational consultancy. Our consolidated fee revenue for the first quarter was $675 million, which was down only two percent year over year at constant currency. Fee revenue in the first quarter was driven by continuous stability in consulting and digital, and we actually saw a return to growth for executive search. Additionally, we saw signs of stabilizing demand for our other permanent placement talent acquisition solutions, both pro-search and RPO.

Speaker Change: We continue to successfully execute our plan delivering value to our clients through unique and differentiated solutions and really reinforcing our position as one of the most trusted brands in organizational consultancy.

Speaker Change: Our consolidated pre-revenue for the first quarter was $675 million, which was down only 2% year over year at Cast and Currency.

Speaker Change: Fee revenue in the first quarter was driven by continued stability in consulting and digital. And we actually saw a return to growth for our executive search.

Speaker Change: Additionally, we saw signs of stabilizing demand for our other permanent placement talent and position solutions, both pro search and RPO.

Bob Rozek: Now, in the first quarter, we delivered $111 million of adjusted EBITDA. Our adjusted EBITDA margin grew to 16.5 percent, and our adjusted diluted earnings per share grew year over year to $1.18 per share. The first quarter's growth in profitability is notable and was driven by continuing improvements in our employee productivity and our disciplined cost management. Our continued ability to achieve greater operating leverage in a prolonged, choppy, and uncertain business environment is really important, and it positions us for greater earnings growth when the business environment approves, and we start to see top-line growing again.

Speaker Change: Now, in the first quarter, we delivered $11 million of adjusted EBITDA, our adjusted EBITDA margin grew to 16.5% and our adjusted deluded earnings per share grew year over year to $1.18 per share.

Gary Burnison: So yeah, I'm very optimistic about our future. The results clearly demonstrate that our strategy is working. Our top line is more than 30% higher than before the pandemic which is that time was already an all time high. And now with even greater profitability. We are proving that we can leverage and extend our brand and deliver diverse offerings with unparalleled IP and incredible colleagues and expertise across our firm to drive even deeper impact for clients and our confidence is also reflected in our capital allocation. Which not only included share buybacks, but also more than a twofold increase in our quarterly dividend year over year.

Speaker Change: The first quarter's growth in profitability is notable and was driven by continuing improvements in our employee productivity and our discipline cost management.

Speaker Change: Our continued ability to achieve greater operating leverage in a prolonged to choppy and uncertain business environment is really important and it positions us for greater earnings growth when the business environment improves and we start to see top-lying growing again.

Bob Rozek: Last, I'd like to provide an update on our capital deployment during the first quarter. Greg will get you some more of the details, but I'd like to point out that in spite of the current business environment, we remain very confident that we can maintain our current levels of profitability and, at the same time, reinvest back into the business to make sure we capture future growth and also return capital to shareholders. In the first quarter, we invested back into the business by hiring approximately 50 fear owners across all lines of business, spending $11 million in capital for both digital product upgrades and technology that enables our other lines of business.

Speaker Change: Last, I'd like to provide enough data on our capital deployment during the first quarter. Gregg will get you some more of the details.

Gary Burnison: This is just the beginning for corn ferry. I'm convinced that we're only scratching the surface of tapping into an estimated $300 billion market opportunity.

Gregg: But I'd like to point out that in spite of the current business environment.

Speaker Change: We remain very confident that we can maintain our current levels of profitability, and at the same time reinvest back into the business, to make sure we capture future growth and also return capital to shareholders.

Gary Burnison: And going forward to capitalize on that opportunity our strategy will be anchored on five strategic colors number ones are go to market approach. And nowhere is that more pronounced than with our market and regional accounts in which almost all of our market clients use at least three of our service offerings and benefit from our IP full suite of offerings and expertise. Second innovation in IP our continued investments in IP are giving clients a shared language to describe what gray organizations and talent look like.

Speaker Change: In the first quarter, we invested back into the business by hiring approximately 50 fierners across all lines of business, spending $11 million in capital for both digital product upgrades and technology that enable their other lines of business.

Bob Rozek: In addition, we returned a total of $43 million to shareholders through a combination of dividends and share purchases.

Speaker Change: In addition, we return to total of $43 million to share holders through a combination of dividends and share purchases.

Gary Burnison: And we're embedding that language across their enterprise and throughout their talent assessment coaching and development process. Services. Third, our brand, which is a permission brand and just an incredible asset. We are the voice of talent, leadership, and organizational strategy.

Gregg Kvochak: Now, I'm going to turn a call over to Greg, who's going to take you through some of the overall company financial highlights. Thanks, Bob. Consolidated fee revenue in the first quarter of fiscal 25 was down 2% year-over-year at constant currency, stabilizing at $675 million. fee revenue growth trends for both consulting and digital continue to be stable, with consulting up 1% and digital up 2% year-over-year at constant currency. Within talent acquisition, our permanent placement solutions also showed early signs of both growth and stability in the first quarter. Executive search grew 3% year-over-year at constant currency, led by North America, which was up 6%, but RPO and permanent placement professional search stabilized at down 7% and down 10% respectively.

Speaker Change: I'm a Turner Call Over to Gregg, who's going to take you through some of the overall company financial highlights. Thanks Bob.

Gregg: Consolidated fee revenue in the first quarter of fiscal 25 was down 2% year over year at constant currency stabilizing at $675 million.

Gregg: Fee revenue growth trends for both consulting and digital continue to be stable with consulting up 1% and digital up 2% year over year at constant currency.

Gary Burnison: Fourth, M&A, we're going to continue to explore synergistic and brand adjacent opportunities. And finally, it's all about our colleagues, investing in and developing our own talent and providing growth opportunities. Fundamentally, none of us know our potential unless we're given opportunity. And our firm fits at the intersection of organizations, their strategy, and their talent to create that opportunity. That's what it's all about. Synchronizing talent and strategy to drive superior performance and enabling people and client organizations to be more than.

Gregg: Within talent acquisition, our permanent placement solutions also showed early signs of both growth and stability in the first quarter.

Gregg: Executive Surge grew 3% year-over-year at Constance Currency led by North America, which was up to 6% but RPO and permanent placement professional search stabilized at down 7% and down 10% respectively.

Gregg Kvochak: Market demand for professional interim services remained challenging, with fee revenue down approximately 17% year-over-year in the first quarter. Excluding RPO, consolidated new business in the first quarter was also down 2% year-over-year at constant currency. Consulting new business in the first quarter was slightly slower and down 2% year-over-year at constant currency, while digital new business was stronger and up 7% year-over-year at constant currency. Like fee revenue, new business growth trends for talent acquisition continued to stabilize, with executive search of 1% year-over-year at constant currency and professional search and interim down 14% year-over-year at constant currency, with new business for permanent placement professional search flat sequentially.

Gregg: Market demand for professional interim services, remaining challenging with fee revenue down approximately 17% year over year in the first quarter.

Gregg: Including RPO, consolidated new business in the first quarter was also down 2% year-over-year at Constant Currency.

Bob Rozek: With that, Bob, I'll turn it over to you. Great. Thanks, Gary, and good afternoon. Good morning. So our results for the first quarter are really a strong start to our new fiscal year, both fee revenue and profitability met, or exceeded the high end of our guidance. Our Justice Eve Dammargin expanded for the fifth consecutive quarter, our consulting and interim bill rates grew year over year by eight percent and nine percent respectively.

Gregg: Consulting new business in the first quarter was slightly slower and down 2% irreverent constant currency. While digital new business was stronger and up 7% irreverent constant currency.

Gregg: Like Fee Revenue, New Business Gross Trends for Town Acquisition.

Gregg: Continues to stabilize with executive search of 1% year over year at constant currency and professional search and interim down 14% year over year at constant currency with new business for permanent placement professional search flat sequentially.

Bob Rozek: And our employee productivity, which we measured by fee revenue per head count, is now 36 percent higher than it was pre-pandemic. You know, given the current business environment, this quarter was another opportunity to validate our long-term strategy. And quite simply, we delivered. We continued to successfully execute our plan, delivering value to our clients through unique and differentiated solutions. And really reinforcing our position is one of the most trusted brands in organizational consultancy.

Gregg Kvochak: For RPO, new business in the first quarter was strong at $104 million with new awards of new awards, which includes $84 million over renewals and extensions and $20 million of new logo assignments. Earnings and profitability continued to grow in the first quarter, driven by both greater consultant and execution staff productivity and disciplined cost management across all lines of business. Consolidated adjusted EBITDA in the first quarter grew $16 million or 16% year-over-year, with our adjusted EBITDA margin improving to 16.5%, up 280 basis points year-over-year. Our adjusted EBITDA margin has now improved sequentially for 5 consecutive quarters.

Gregg: For RPO, new business in the first quarter was strong at $104 million, with new awards, which, it...

Gregg: of New Awards, which includes 84 million of renewals and extensions and $20 million of new logo assignments.

Gregg: Earnings and profitability continue to grow in the first quarter, driven by both greater consultant and execution staff productivity and discipline cost management across all lines of business.

Bob Rozek: Our consolidated fee revenue for the first quarter was $675 million, which was down only 2 percent year over year at constant currency, fee revenue in the first quarter was driven by continuous stability in consulting and digital, and we actually saw return to growth for executive search. Additionally, we saw signs of stabilizing demand for our other permanent placement, talent, acquisition solutions, both pro-search and RPO. Now in the first quarter, we delivered $111 million of adjusted EBITDA.

Gregg: Consolidated just an EBITDA in the first quarter grew $16 million or 16% year over here with our adjusted EBITDA margin improving to 16.5% up 280 basis points year over year.

Gregg: Our adjusted EBITDA margin has now improved sequentially for five consecutive quarters.

Gregg Kvochak: Adjusted fully diluted earnings per share in the first quarter will $1.18, up 19 or 19% year-over-year. Fully diluted earnings per share measured by GAAP or $1.17 in the first quarter. Our investable cash position at the end of the first quarter improved to $553 million. Our capital allocation continues to be balanced. In the first quarter fiscal 25, we deployed $63 million of cash, investing $11 million in capital expenditures, using $9 million for debt service, and returned $43 million to shareholders: $19.5 million in dividends and $23.5 million to repurchase $351,000 in shares. First.

Speaker Change: Justice Fully Deluded Ernest for Share on the first quarter will $1.18 up 19 cents or 19% year over year.

Bob Rozek: Our adjusted EBITDA margin grew to 16.5 percent, and our adjusted deluded earnings per share grew year over year to $1.18 per share. The first quarter's growth in profitability is notable, and was driven by continuing improvements in our employee productivity and our discipline cost management. Our continued ability to achieve greater operating leverage in a prolonged choppy and uncertain business environment is really important, and it positions us for greater earnings growth when the business environment approves, and we start to see top line growing again.

Gregg: Fully-deluted earnings per share measured by GAP, or $1.17 in the first quarter.

Gregg: Our Investible Cash position at the end of the first quarter improved to $553 million.

Speaker Change: Our capital allocation continues to be balanced, and the first quarter of this will 25, we deployed $63 million of cash, investing $11 million in capital expenditures using $9 million for debt service, and return $43 million to shareholders.

Speaker Change: 19.5 million dollars in dividends and $23.5 million to repurchase $351,000 in shares.

Bob Rozek: Last, I'd like to provide an update on our capital deployment during the first quarter. Greg will get you some more of the details, but I'd like to point out that in spite of the current business environment, we remain very confident that we can maintain our current levels of profitability, and at the same time reinvest back into the business to make sure we capture future growth, and also return capital to shareholders. In the first quarter, we invested back into the business by hiring approximately 50 fear owners across all lines of business, spending $11 million in capital for both digital product upgrades and technology that enables our other lines of business. In addition, we returned a total of $43 million to shareholders through a combination of dividends and sharey purchases.

Tiffany Louder: That will turn the call over to Tiffany to review your operating segments in more detail. Thanks, Gregg. Starting with KF Digital, be revenue in the first quarter was 88 million, which was up 2% year over year at constant currency. Digital subscription and license fee revenue was 34 million in the first quarter, which was up 7% year over year at constant currency and accounted for approximately 39% of fee revenue for the quarter. New business per KF Digital was strong at 97 million, with 35 million, or 36% of the total, tied to subscription and license sales. The overall pipeline for Digital remains healthy as we head into the second quarter.

Speaker Change: That'll turn the call over to Tiffany to review our operating segments in more detail.

Tiffany: Thanks, Gregg. Starting with Candidate Digital, the revenue in the first quarter was 88 million, which was up to percent year over year at constant current base.

Tiffany: Digital subscription and license fee revenue was 34 million in the first quarter, which was up 7% year over year at constant currency and accounted for approximately 39% of fee revenue for the quarter.

Speaker Change: New Business for KF Digital was strong at 97 million, with 35 million, or 36% of the total high description and license sales. The overall pipeline for digital remains healthy as we head into the second quarter.

Tiffany Louder: Digital's adjusted EBITDA margin also remained strong in the first quarter, reaching 30.2%, driven by stable fee revenue and disciplined cost management.

Speaker Change: Digital adjusted EBITDA margin also remains strong in the first quarter, reaching 30.2% driven by stable fee revenue and discipline cost management.

Gregg Kvochak: Now I'm going to turn a call over to Greg, who's going to take you through some of the overall company financial highlights. Thanks, Bob. Consolidated fee revenue in the first quarter of fiscal 25 was down 2% year-over-year at constant currency, stabilizing at $675 million, fee revenue growth trends for both consulting and digital continue to be stable with consulting up 1% and digital up 2% year-over-year at constant currency. Within talent acquisition, our permanent placement solutions also showed early signs of both growth and stability in the first quarter.

Tiffany Louder: For consulting, fee revenue in the first quarter was 168 million, which was up 1% year over year at constant currency. Fee revenue growth was strongest in organizational strategy, which increased 10% year over year. Consulting's average bill rate was 425 per hour in the first quarter, which was up 8% year over year. Adjusted EBITDA margin also continued to improve for consulting, increasing 250 basis points year over year to 17.5%, driven by both higher bill rates and greater consultant and execution staff utilization.

Speaker Change: For consulting, C. Revenue in the first quarter was 168 million, which was up 1% year over year at constant currency.

Speaker Change: The revenue growth was strongest in organizational strategy, which increased 10% year over year. Consulting to average bill rate was 425 per hour in the first quarter, which was up 8% year over year.

Speaker Change: Adjusted EBITDA margin also continued to improve for consulting, increasing 250 basis points year over year to 17.5% driven by both higher bill rates and greater consultant and execution staff utilization.

Gregg Kvochak: Executive search grew 3% year-over-year at constant currency, led by North America, which was up 6%, while RPO and permanent placement professional search stabilized at down 7% and down 10% respectively. Market demand for professional interim services remained challenging with fee revenue down approximately 17% year-over-year in the first quarter. Excluding RPO, Consolidated new business in the first quarter was also down 2% year-over-year at constant currency. Consulting new business in the first quarter was slightly slower and down 2% year-over-year at constant currency, while digital new business was stronger and up 7% year-over-year at constant currency.

Tiffany Louder: Total fee revenue for professional search and interim in the first quarter was 122 million, down 20 million, or 14% year over year. Fee revenue trends for permanent placement professional search continued to stabilize in the first quarter, with revenue contracting 10% year over year and only 7% sequentially. Consultant productivity in the first quarter for professional search also remained stable sequentially at 640,000 annualized and was up 10% measured year over year. Interim fee revenue was 70 million for the first quarter, which was down 14 million or 17% year over year, but down only 4% sequentially. Despite the slowdown in demand, interim's average bill rate increased to $133 per hour, which is up 9% from one year ago and is reflective of the added value of being part of the broader corn theory ecosystem.

Speaker Change: Total fee revenue for professional search and interim in the first quarter was 120 to million, down 20 million or 14% year over year.

Speaker Change: The revenue trends for permanent placement professional search continue to stabilize in the first quarter, with revenue contracting 10% your year and only 7% sequentially.

Speaker Change: Consultant productivity in the first quarter for professional search also remains stable to coincidentally at 640,000 annually and with up 10% measured year over year.

Speaker Change: Interim C. Revenue, what 70 million for the first quarter, which was down 14 million or 17% year every year, but down only 4% sequentially.

Gregg Kvochak: Like fee revenue, new business growth trends for talent acquisition continued to stabilize with executive search of 1% year-over-year at constant currency and professional search in interim down 14% year-over-year at constant currency with new business for permanent placement professional search flat sequentially. For RPO, new business in the first quarter was strong at $104 million with new awards of new awards, which includes $84 million over newals and extensions and $20 million of new logo assignments.

Speaker Change: Despite the slowdown in demand, Enderam's average bill rate increased to $133 per hour, which is up 9% from one year ago, and is reflective of the added value of the part of the broader corn theory ecosystem.

Tiffany Louder: Adjusted EBITDA margin for professional search and interim improved to 21.1% in the first quarter, driven primarily by disciplined cost management. Moving on to recruitment process outsourcing. Fee revenue in the first quarter for RPO stabilized at 89 million, which was down 7% year over year at constant currency and flat sequentially, due in part to an increase in hiring volume by base clients. Total revenue under contract at the end of the first quarter was 656 million, with approximately 295 million, or 45%, to be recognized within the next four quarters. Although the timing of new business can be lumpy, the pipeline for RPO remains strong for both renewals and extensions with existing clients and new logo.

Speaker Change: Adjusted even on margin for professional search and interim improved to 21.1% in the first quarter, driven primarily by discipline cost management.

Speaker Change: Moving on to recruitment process out forcing.

Speaker Change: B. Revenue in the first quarter for RPO stabilized at 89 million, which was down 7% your career at constant currency and flat sequentially. Do, in part, to an increase in hiring volume by base clients.

Gregg Kvochak: Earnings and profitability continued to grow in the first quarter driven by both greater consultant and execution staff productivity and discipline cost management across all lines of business. Consolidated adjusted EBITDA in the first quarter grew $16 million or 16% year-over-year with our adjusted EBITDA margin improving to 16.5% up 280 basis points year-over-year. Our adjusted EBITDA margin has now improved sequentially for 5 consecutive quarters. Adjusted fully diluted earnings per share in the first quarter will $1.18 up 19 or 19% year-over-year.

Speaker Change: Total revenue and contract at the end of the first quarter was 656 million, with approximately 295 million or 45 percent to be recognized within the next four quarters.

Speaker Change: Although the timing of new business can be lumpy, the pipeline for RPO remains strong for both renewals and extensions with existing clients and new logo wins.

Tiffany Louder: Lins. The adjusted EBITDA margin for RPO improved to 14.1% in the first quarter, driven by both greater execution staff productivity and discipline cost management.

Speaker Change: The adjusted event on margin for RPO improved, the 14.1% in the first quarter, driven by both greater execution staff productivity and discipline cost management.

Tiffany Louder: Finally, global fee revenue in the first quarter for executive search was $209 million, up 3% year-over-year at constant currency. Global fee revenue for executive search has been stable for the past several quarters, with Q1 marking a return to growth for the segment. Both the number of search consultants and consultant productivity measured by fee revenues for consultants improved sequentially in the first quarter, driving adjusted EBITDA to $49 million with an adjusted EBITDA margin of 23.7%.

Speaker Change: Finally, Global Fee revenue in the first quarter for executive search was 209 million. 3% year over year at constant currency. Global Fee revenue for executive search has been stable for the past several quarters, with Q1 marking a return to growth for the segment.

Gregg Kvochak: Fully diluted earnings per share measured by GAP or $1.17 in the first quarter. Our investable cash position at the end of the first quarter improved to $553 million. Our capital allocation continues to be balanced. In the first quarter fiscal 25, we deployed $63 million of cash investing $11 million in capital expenditures using $9 million for debt service and we turned $43 million to shareholders. $19.5 million in dividends and $23.5 million to repurchase $351,000 shares.

Operator: Conference.

Speaker Change: Both the number of search consultants and consultant productivity measures by C. Revenue for consultants improved sequentially in the first quarter, driving a just city-va.to 49 million with an just an event on margin of 23.7%.

Bob Rozek: I will now turn the call back over to Bob to discuss our outlook for the second quarter of fiscal 25. Great. Thanks, Tiffany. For the last several months, our new business growth trends have continued to be choppy. You know, exiting the first quarter and entering the second quarter, our new business was up 10% year-over-year in July, and then August came back down in line with expectations.

Speaker Change: I will now turn the call back over to Bob to discuss our outlet for the second quarter of fiscal.

Bob: and for the last several months, our new business growth trends have continued to be choppy. And you know, getting the first quarter and entering the second quarter, our new business was up 10% year over year in July, and then August came back down in line with expectations.

Tiffany Louder: That will turn the call over to Tiffany to review your operating segments in more detail. Thanks, Gregg. Starting with KF Digital, be revenue in the first quarter was 88 million, which was up 2% year over year at constant currency. Digital subscription and license fee revenue was 34 million in the first quarter, which was up 7% year over year at constant currency and accounted for approximately 39% of fee revenue for the quarter.

Bob Rozek: Assuming no further changes in the worldwide geopolitical conditions, economic conditions, financial markets, and foreign exchange rates, we expect fee revenue in the second quarter to range from $655 million to $685 million. Our adjusted EBITDA margin to approximate 16.3% to 16.7%, and our consolidated adjusted diluted earnings per share to range from $1.14 to $1.26. And finally, we expect our gap deluded earnings per share in the first quarter to range from $1.11 to $1.23.

Speaker Change: Assuming no further change in the worldwide geopolitical conditions, economic conditions.

Speaker Change: Financial Markets and Foreign Exchange rates, we expect fee revenue.

Speaker Change: in the second quarter to range from 655 million.

Speaker Change: $2,685 million dollars.

Speaker Change: I regested EBITDA marriage into approximate 16.3% to 16.7%.

Tiffany Louder: New business for KF Digital was strong at 97 million, with 35 million, or 36% of the total tied to subscription and license sales. The overall pipeline for digital remains healthy as we head into the second quarter. Digital's adjusted EBITDA margin also remained strong in the first quarter, reaching 30.2% driven by stable fee revenue and discipline cost management. For consulting, fee revenue in the first quarter was 168 million, which was up 1% year over year at constant currency, fee revenue growth was strongest in organizational strategy, which increased 10% year over year.

Speaker Change: and our consolidation adjusted to reduce earnings per share to range from $1.14 to $1.26. And finally, we expect our gap to reduce earnings per share in the first quarter to range from $1.11 to $1.23.

Bob Rozek: Now, in closing, I will reiterate the message from my last earnings call. The economic environment we are operating in today is full of contradictions, uncertainties, and new challenges. You know, as a management team, we're confronting these issues head on, and we are laser focused on controlling what we can control, which includes the discipline and maintenance of our cost base and driving productivity to maintain our profitability while making measured investments to position the firm for long-term growth.

Speaker Change: Now, in closing, I will reiterate the message from my last earnings call.

Speaker Change: The economic environment we're operating in today is full of contradictions, uncertainties.

Speaker Change: and New Challenges. You know, as a management team, we're confronting these issues head-on, and we are laser-focused on controlling what we can't control, which includes...

Speaker Change: The discipline and maintenance of our cost-based and driving productivity to maintain our profitability while making measured investments to position the firm for a long-term growth.

Tiffany Louder: Consulting's average bill rate was 425 per hour in the first quarter, which was up 8% year over year. Adjusted EBITDA margin also continued to improve for consulting, increasing 250 basis points year over year to 17.5% driven by both higher bill rates and greater consultant and execution staff utilization.

Bob Rozek: And as I always say, we are beginning of what's going to be a very long ballgame, and I agree wholeheartedly with Gary. I truly believe our best is yet to come.

Speaker Change: And as I always say, we are beginning of what's going to be a very long ball game, and I agree wholeheartedly with Gary, I truly believe our best is yet to come. With that, we would be glad to answer any questions you may have.

Operator: With that, we would be glad to answer any questions you may have.

Operator: Ladies and gentlemen, if you would like to ask a question, please press 1, then 0 on your telephone keypad. You will hear information that your line has been placed in queue. Once again, to ask a question, press 1, then 0.

Tiffany Louder: Total fee revenue for professional search and interim in the first quarter was 122 million, down 20 million or 14% year over year, fee revenue trends for permanent placement professional search continued to stabilize in the first quarter, with revenue contracting 10% year over year and only 7% sequentially. Consultant productivity in the first quarter for professional search also remained stable sequentially at 640,000 annualized and was up 10% measured year over year. Interim fee revenue was 70 million for the first quarter, which was down 14 million or 17% year over year, but down only 4% sequentially.

Speaker Change: Ladies and gentlemen, if you would like to ask a question, please press 1, then 0 on your telephone keypad. You will hear information that you in line has been placed in queue.

Trevor Romeo: Our first question is from Trevor Romeo with William Blair. Please go ahead. Hi, thanks so much for taking the questions. First one I had was just on margins. I think, again, really nice to see some upward momentum there this quarter. But just kind of thinking about the 16 to 18 percent longer-term target for EBITDA margins, you know, you're already kind of that 16 and a half. And in this type of macro environment, without really much of a cyclical uptick coming through yet, so is that still a good range to think about over the next several years, or do you think there could be some upside to that once we do get more of a rebound in the cyclical uptick?

Speaker Change: Once again to ask a question, press 1, then 0. Our first question is from Trevor Romeo with William Blair. Please go ahead.

Speaker Change: Hi. Thanks so much for taking the questions. First one I had was just on margins. I think, again, really nice to see some upward moments in there. This quarter.

Speaker Change: But just kind of thinking about the 16 to 18 percent longer term target for EBITDA margins, you know, you're already kind of that.

Speaker Change: 16.5, and this type of macro environment without really much of a cyclical uptick coming through you get. So is that still a good range to think about over the next several years or do you think there could be some upside to that once we do get more of a rebound in the cyclical businesses?

Tiffany Louder: Despite the slowdown in demand, interim's average bill rate increased to $133 per hour, which is up 9% from 1 year ago and is reflective of the added value of being part of the broader corn theory ecosystem. Adjusted EBITDA margin for professional search and interim improved to 21.1% in the first quarter, driven primarily by discipline cost management, moving on to recruitment process outsourcing, fee revenue in the first quarter for RPO stabilized at 89 million, which was down 7% year over year at constant currency and flat sequentially due in part to an increase in hiring volume by base clients.

Gary Burnison: Businesses. I do think there could be upside to that, but for now, we feel very comfortable with the 16-day team. You know, a year ago, you know, what we've seen over the last year is exactly what we predicted a year ago, and we thought there would be a multi-quarter reset in economies around the world, and it's played out exactly as we thought. And so we made some very hard decisions a year ago around our operating structure, and those have turned out to be very, very good decisions in hindsight. And, you know, at the same time, we are reinvesting in the business.

Speaker Change: I do think there could be upside to that, but for now we feel very comfortable with the 16 to 18.

Speaker Change: You know, a year ago.

Speaker Change: You know what we've seen over the last year is exactly what we predicted a year ago and we thought there would be a multi-quarter reset in economies around the world and it's played out exactly as we thought.

Speaker Change: And so we made some very hard decisions a year ago around our operating structure and those have turned out to be very, very good decisions in hindsight. And you know, at the same time, we are reinvesting in the business.

Tiffany Louder: Total revenue under contract at the end of the first quarter was $656 million, with approximately 295 million or 45% to be recognized within the next four quarters. Although the timing of new business can be lumpy, the pipeline for RPO remains strong for both renewals and extensions with existing clients and new logo. The adjusted EBITDA margin for RPO improved to 14.1% in the first quarter driven by both greater execution staff productivity and discipline cost management.

Trevor Romeo: And as Bob said, this quarter, we brought on 51 new consultants onto the platform in total. So, yes, there could be some upside to that, for sure. But for now, we're sticking with the 16-day team. Okay, great.

Speaker Change: and as Bob said this quarter we brought on 51.

Bob: New Consultants, onto the platform and total. So yes, there could be some upside to that, for sure. But for now, we're sticking with the 16-day team.

Tiffany Louder: Finally, global fee revenue in the first quarter for executive search was 209 million, up 3% year-over-year at constant currency. Global fee revenue for executive search has been stable for the past several quarters, with Q1 marking a return to growth for the segment. Alt, the number of search consultants and consultant productivity measured by fee revenues for consultants improved sequentially in the first quarter, driving adjusted EBITDA to 49 million with an adjusted EBITDA margin of 23.7%.

Gary Burnison: Thanks, Gary. And then for my follow-up here, just looking at the revenue guidance, you know, I think if I take the midway, it looks like you're expecting about a 1% sequential decline. You know, Q1 and Q2, typically I think you see a pretty nice uptick most years in Q2. So, it's kind of just wondering if you could maybe give a bit more color on what you're seeing across the businesses, and what, if anything, is different than prior years in terms of that sequential progression. Thanks. Yeah, I think you're right. Generally, we see an uptick of 4% something like that.

Bob: Okay, great, thanks, Gary. And then for my follow-up here, just looking at the revenue guidance.

Speaker Change: Now I think if I take the midway, it looks like you're expecting about a 1% sequential decline. You know, Q1 that Q2, typically I think you see a pretty nice uptick most years in Q2. So it was kind of just wondering if you could maybe give.

Speaker Change: A bit more color on what you're seeing across the businesses and what if anything is, is different than prior years in terms of that sequential progression.

Bob Rozek: I will now turn the call back over to Bob to discuss our outlook for the second quarter of fiscal 25. Great, thanks, Tiffany. For the last several months, our new business growth trends have continued to be choppy. You know, exiting the first quarter and entering the second quarter, our new business was up 10% year-over-year in July and then August came back down in line with expectations.

Speaker Change: Yeah, I think it you're right. Generally we see an uptick of 4% something like that. So you're right on that. We've had two snap elections.

Gary Burnison: So, you're right on that. You know, we've had two snap elections, continued trade conflicts, the wars that you know about, the Olympics in Paris. There's just been a lot of things that have been going on. And given that environment, you know, in July and August with events around the world, we feel like the business will be flatish in this next quarter. The other thing that's happening is on the consulting business, and you see it in the rape rower. We're moving towards much bigger and more impactful engagements. And so the, for example, engagements over two and a half million have tripled.

Speaker Change: Continued Trade Complex, the war that you know about the Olympics.

Speaker Change: In Paris, there's just been a lot of things that have been going on and given that environment in July and August with events around the world.

Bob Rozek: Assuming no further changes in worldwide geopolitical conditions, economic conditions, financial markets and foreign exchange rates, we expect fee revenue in the second quarter to range from $655 million to $685 million. Our adjusted EBITDA margin to approximate 16.3% to 16.7%. And our consolidated adjusted deluded earnings per share to range from $1.14 to $1.26. And finally, we expect our gap deluded earnings per share in the first quarter to range from $1.11 to $1.23.

Speaker Change: We feel like the business will be flat-ish in this next quarter. The other thing that's happening is on the consulting business and you see it in the free-for-hour.

Speaker Change: We're moving towards much bigger and more impactful engagements, and so the, for example.

Trevor Romeo: And so, those take longer to work through. And so, that's certainly playing into it as well. Thanks, Gary. That's helpful.

Speaker Change: Engagement Silver 2.5 million.

Bob Rozek: Now, in closing, I will reiterate the message from my last earnings call. The economic environment we are operating in today is full of contradictions, uncertainties and new challenges. You know, as a management team, we're confronting these issues head on and we are laser focused on controlling what we can control, which includes the discipline and maintenance of our cost-base and driving productivity to maintain our profitability while making measured investments to position the firm for long-term growth.

Speaker Change: Have Triple, and so those take longer to work through, and so that's certainly playing into it as well.

Gary Burnison: Just maybe to quickly follow up because you mentioned the snap elections in Europe, I believe. Are you seeing any impact or hearing from clients? I guess that there could be some impact in the near term in North America with the US election coming up at all? You know, we haven't seen that. And, you know, speaking of AMIA, you know, new business, trailing for months; the last four months, it's been up three of the four months. Which given, you know, the summertime is a very, very strong sign, but no, we have not seen that in the United States.

Speaker Change: Thanks, Gary. That's helpful. Just maybe to quickly follow up, because you mentioned the snap elections in Europe, I believe. Are you seeing any impact or hearing from clients? I guess that there could be some impact in the near term in North America with the US election coming

Speaker Change: You know, we haven't seen that.

Bob Rozek: And as I always say, we are beginning of what's going to be a very long ballgame, and I agree wholeheartedly with Gary, I truly believe our best is yet to come.

Speaker Change: and you know, speaking of a Mia, you know, new business trailing for months, the last four months, it's been up three of the four months, which given, you know, the summertime is, is a very, very strong sign, but no, we have not, we have not seen that in the United States.

Operator: With that, we would be glad to answer any questions you may have. Ladies and gentlemen, if you would like to ask a question, please press one, then zero on your telephone keypad. You will hear information that your line has been placed in queue. Once again, to ask a question, press one, then zero.

Trevor Romeo: Jones. Okay. Well, thanks again.

Operator: Appreciate all the color.

Speaker Change: Well thanks again, please show all the color.

George Tong: Next, we go to the line of George Tong with Goldman Sachs. Please go ahead. You're North American exec search business saw notable improvement in its growth rate in the quarter. Can you elaborate on what drove the improvement and how sustainable the current trajectory of growth is? Well, how sustainable it is, we, you know, the business today is actually doing more new business and revenue slightly more than before the pandemic. Our productivity was very, very good at about a million, five or so. And so, you know, we look at that and say there's plenty of room to run, for sure in that search business.

Speaker Change: Next we go to the line of George Tong with Goldman Sachs, please go ahead.

Trevor Romeo: Our first question is from Trevor Romeo with William Blair. Please go ahead. Hi, thanks so much for taking the questions. The first one I had was just on margins. I think again, really nice to see some upward momentum there, this quarter. But just kind of thinking about the 16 to 18% longer-term target for EBITDA margins, you know, you're already kind of that 16 and a half. And in this type of macro environment, without really much of a cyclical uptick coming through yet.

George Tong: You're North American exec search business saw notable improvement in its growth rate in the quarter. Can you elaborate on what drove the improvement and how sustainable the current trajectory of growth is?

Speaker Change: Well, how sustainable it is. We, you know, the business today is actually doing more new business in revenue slightly more than before the pandemic.

Speaker Change: Our productivity was very, very good at about a million, five or so and so, you know, we, we look at that and say there's plenty of room to run.

Trevor Romeo: So is that still a good range to think about over the next several years? Or do you think there could be some upside to that once we do get more of a rebound in the cyclical? Businesses.

Gary Burnison: I do think there could be upside to that, but for now, we feel very comfortable with the 16-day team. You know, a year ago, you know, what we've seen over the last year is exactly what we predicted a year ago, and we thought there would be a multi-quarter reset in economies around the world, and it's played out exactly as we thought. And so we made some very hard decisions a year ago around our operating structure, and those have turned out to be very, very good decisions in hindsight.

George Tong: I'll tell you that the level of work that we're doing these days and executive search is probably the highest that I've seen. And that ranges from sports to industry. We've seen quite a bit of work recently a focus around succession. And that that clearly has been driving some of our search business as well as our consulting business. And, you know, the broader backdrop is the demographic trends. You know, peak 65, the number of people turning age 65 over the next two to three years. The United States is probably going to lose four million, five million workers a year from the last of the baby boom retirements.

Speaker Change: For sure in that search business I'll tell you that the level of work that we're doing these days in executive search is probably the highest that I've seen.

Speaker Change: and that range is from sport to industry. We've seen quite a bit of work recently of focus around succession.

Speaker Change: And that clearly has been driving some of our search business as well as our consulting business. And you know, the broader backdrop is the demographic trends.

Speaker Change: You know, Pete 65, the number of people turning age 65 over the next, you know, two to three years.

Gary Burnison: And you know, at the same time, we are reinvesting in the business. And as Bob said, this quarter, we brought on 51 new consultants onto the platform in total. So, yes, there could be some upside to that, for sure, but for now, we're sticking with the 16-day team. Okay, great. Thanks, Gary. And then for my follow-up here, just looking at the revenue guidance, you know, I think if I take the midway, it looks like you're expecting about a 1% sequential decline.

Speaker Change: The United States is probably going to live, you know, 4 million, 5 million workers a year.

Gary Burnison: And so clearly, you know that that provides can provide sustained momentum. And so, we've seen, yeah, we've seen an uptick since we last talked to you in JIT. And, you know, we'll have to see what the environment holds in the future.

Speaker Change: from the last of the baby boom retirements and so clearly, you know, that's that provides.

Speaker Change: And so we've seen an uptick since we lost talk to you in Japan and you know, we'll have to see what the environment holds in the future, but we feel very, very comfortable and confident about where we're operating in the executive search business in North America.

George Tong: But we feel very, very comfortable and confident about where we're operating in the executive search business in North America. Got it. That's very helpful context. You also cited stable trends in your professional search and RPO businesses.

Gary Burnison: You know, Q1, the Q2. Typically, I think you see a pretty nice uptick most years in Q2. So, it's kind of just wondering if you could maybe give a bit more color on what you're seeing across the businesses, and what, if anything, is different than prior years in terms of that sequential progression, thanks. Yeah, I think you're right. Generally, we see an uptick of 4%, something like that. So, you're right on that.

Speaker Change: Got it. That's very helpful, contact. You also cited stable trends in your professional search and RPO businesses. Can you talk a little bit about what you would need to see for those stable trends to inflect into or positive trends?

Gary Burnison: Can you talk a little bit about what you would need to see for those stable trends to inflect into or positive trends? I think one thing that is there's a couple broader, you know, perspectives on the results. You know, one is China. And, you know, although not a significant part of the firm, you know, what you've seen in China has definitely had an impact on our growth rates. And it's, you know, it's been significant for us. And I just reflect on, you know, I read someplace that before the pandemic, there was something like 325 flights to China, mainland China a week from the United States.

Speaker Change: I think one thing that is, there's a couple broader perspectives on the results, you know, one is China.

Gary Burnison: Which, you know, we've had two snap elections, continued trade conflicts, the wars that you know about, the Olympics, in Paris. There's just been a lot of things that have been going on. And given that environment, you know, in July and August with events around the world, we feel like the business will be flatish in this next quarter. The other thing that's happening is on the consulting business, and you see it in the rape rower.

Speaker Change: and you know although not a significant part of the firm.

Speaker Change: You know, what you've seen in China has definitely had an impact.

Speaker Change: On our growth rates, and it's been significant for us, and I just reflect on, you know, I read some place that before the pandemic, there was something like 325 flights to China.

Gary Burnison: And now it's like 35. And that's definitely reflected in our business. And so, our growth would have been substantially different. Or the decline wouldn't have been as much with China. But, you know, the other thing on the, on both the professional search and interim side, it goes back to a decision that we made over a year ago, slightly over a year ago. And that was when we thought about the mega trends and the forward 12 to 24 months, we really did see this multi-quarter reset. And we made a decision that we would pivot the pro-search and interim businesses towards more profitable engagements.

Speaker Change: Maneland China, a week from the United States, and now it's like 35.

Speaker Change: and that's definitely reflected in our business and so our growth.

Gary Burnison: We're moving towards much bigger and more impactful engagements. And so the, for example, engagement is over two and a half million, have triple. And so, those take longer to work through. And so, that's certainly playing into it as well. Thanks, Gary. That's helpful. Just maybe to quickly follow up because you mentioned the kind of snap elections in Europe, I believe. Are you seeing any impact or hearing from clients? I guess that there could be some impact in the near term in North America with the US election coming up at all?

Speaker Change: would have been substantially different, or the decline wouldn't have been as much with China. But you know the other thing on both the professional search and interim side.

Speaker Change: It goes back to a decision that we made over a year ago.

Speaker Change: Slightly over a year ago. And that was when we thought about the mega trends and the four word 12 to 24 months. We really did see this multi-quarter reset and we made a decision.

Speaker Change: that we would pivot the pro search and interim businesses towards more profitable engagements. And with that, we made a decision that we would adjust.

Gary Burnison: You know, we haven't seen that. And, you know, speaking of AMIA, you know, new business trailing for months, the last four months, it's been up three of the four months. Which given, you know, the summertime is a very, very strong sign. But no, we have not seen that in the United States. Jones. Okay.

Gary Burnison: And with that, we made a decision that we would adjust the number of consultants in that business. So when you look at Pro Search and Interim. You're seeing, when you see the revenue decline, a big part of that story is not only the macro environment, which is definitely challenging, as Bob said, but it's also decisions we made to move the business towards what we have now proven to be true: more profitable work. And so, you know, we've reduced the number of consultants in those businesses year over year, like 25%.

Speaker Change: The number of consultants in that business, so when you look at...

Speaker Change: Frouce Search and Enter on...

Speaker Change: You're seeing when you see the revenue decline.

Speaker Change: A big part of that story is not only the macro environment, which is definitely challenging as Bob said, but it's also decisions we made.

Trevor Romeo: Well, thanks again. Appreciate all the color.

George Tong: Next we go to the line of George Tong with Goldman Sachs. Please go ahead. You're North American exec search business saw notable improvement in its growth rate in the quarter. Can you elaborate on what drove the improvement and how sustainable the current trajectory of growth is? Well, how sustainable it is, you know, the business today is actually doing more new business and revenue slightly more than before the pandemic. Our productivity was very, very good at about a million five or so.

Speaker Change: To move the business towards what we have now proven to be true, more profitable work. And so, you know, we've reduced...

Speaker Change: The number of consultants in those businesses year over year, like 25%. And now this last quarter, as Bob said, we did reinvest in the platform in terms of number of consultants.

George Tong: And now, this last quarter, as Bob said, we did reinvest in the platform in terms of number of consultants, as well as putting money in the CapEx. Very helpful. Thank you.

Speaker Change: as well as putting money in the capbacks.

Tobey Sommer: And next we go to the line of Tobey Sommer with Truist. Please go ahead. Thank you. I wanted to ask about your hiring of additional fee owners. Is that 5051 number? Is that a net number, and maybe could talk about how they're dispersed around the businesses and whether your posture for the balance of the year is still to be sort of a net hiring, hiring and just coming up. What? Thanks. It is our posture.

Speaker Change: and Gary Opel. Thank you.

Speaker Change: Next, we go to the line of Toby Summer with Trust, please go ahead.

George Tong: And so, you know, we look at that and say there's plenty of room to run, for sure, in that search business. I'll tell you that the level of work that we're doing these days and executive search is probably the highest that I've seen. And that ranges from sport to industry. We've seen quite a bit of work recently a focus around succession. And that that clearly has been driving some of our search business as well as our consulting business.

Toby Summer: Thank you. I wanted to ask about your hiring of additional firmers, you said.

Toby Summer: 5051 number is that? A net number, and maybe could you talk about how they're dispersed around the businesses and whether you're posture?

Speaker Change: For the balance of the year is still to be sort of a net hiring hire and just coming in and why. Thanks.

Gary Burnison: I'll have Bob maybe could break it down a little bit, but our posture over the next year is absolutely to grow the net consultants that we have across the platform. At the same time, we're going to make sure, like we've always done, that we do quarterly talent management, which any great company will do. I will tell you that we certainly have a bias for professional search, interim consulting, and digital. Those areas, we're putting an increased focus on. Part of that is because of the decisions that we made a year ago to, you know, focus on more profitable work.

Speaker Change: It is our posture, I have a bottom, maybe you could break it down a little bit, but our posture over the next year is absolutely to grow.

George Tong: And, you know, the broader backdrop is the demographic trends. You know, peak 65, the number of people turning age 65 over the next two to three years. The United States is probably going to lose four million, five million workers a year from the last of the baby boom retirements. And so clearly, you know, that's, that provides, can provide sustained momentum. And so, we've seen, yeah, we've seen an uptick since we last talked to you in June.

Speaker Change: The net consultants that we have across the platform. At the same time, we're going to make sure, like we've always done, that we do, you know, quarterly talent management.

Speaker Change: which any great company will do. I will tell you that we certainly have a bias.

Speaker Change: for Professional Surge, Hannah Rom.

Speaker Change: Consulting and digital. Those areas.

Speaker Change: Um...

Speaker Change: We're putting an increased focus on part of that is because of the decisions that we made a year ago.

George Tong: And, you know, we'll have to see what, what the environment holds in the future. But we feel very, very comfortable and confident about where we're operating in the executive search business in North America. Got it. That's very helpful context. You also cited stable trends in your professional search and RPO businesses. Can you talk a little bit about what you would need to see for those stable trends to inflect into more positive trends?

Bob Rozek: So we do have an appetite to be in the market. We promoted a lot of people this last quarter.

Speaker Change: To, you know, focus on more profitable work. So we do have an appetite to be in the market. We promoted a lot of people, this, this last quarter. And Bob, maybe you can provide a little bit more detail.

Tobey Sommer: And Bob, maybe you can provide a little bit more detail. Yeah, the the the feeders that we brought on Toby were more concentrated across executive search and consulting. That's where the, I would say the line share the 50 or so that came on board were in those lines of business. And is that 50 or so number sort of a reasonable way to think about things on a go forward basis? Because this from a modeling perspective, we're talking about 50 hires, but is that, is that net of consistent talent management, et cetera? No, the 50 hires is gross.

Speaker Change: The fear is that we brought on Toby, we were more concentrated across executive search and consulting. That's where I would say the line sure, the fifth year or so that came on on board where in those lines of business.

George Tong: I think one thing that is there's a couple broader, you know, perspectives on the results. You know, one is China. And, you know, although not a significant part of the firm, you know, what you've seen in China has definitely had an impact on our growth rates. And it's, you know, it's been significant for us. And I just reflect on, you know, I read some place that before the pandemic, there was something like 325 flights to China, mainland China, a week from the United States.

George Tong: And now it's like 35. And that's definitely reflected in our business. And so our growth would have been substantially different. Or the decline wouldn't have been as much with China. But, you know, the other thing on the, on both the professional search and interim side, it goes back to a decision that we made over a year ago, slightly over a year ago. And that was when we thought about the mega trends and the forward 12 to 24 months, we really did see this multi-quarter reset.

Speaker Change: And is that 50 or so number, sort of a reasonable way to think about things that I go forward, basis. Because this is from a modeling perspective, we're talking about 50 hires, but is that net of...

Speaker Change: Consistent Talent Management Center.

Gary Burnison: It was the gross number of hires we had this quarter. It was getting indicated we made some decisions and a couple of yellow lines of business to proactively, you know, performance manage folks. Manage folks out, but I would say, yeah, that the number of hires that you see, I would expect us to be, for the next couple of quarters, in that same range. Okay, that's helpful.

Speaker Change: No, the 50 hires is gross, and it was the gross number of hires we had this quarter. It was Gary indicated we made some decisions and a couple of the airlines of business to proactively, you know.

Speaker Change: Performance Managed Folks.

Speaker Change: Managed folks out. But I would say that the number of hires that you see, I would expect us to be for the next couple of quarters in that same range.

Gary Burnison: And then could you give us some more detail about what the pivot to more profitable engagements and internment research means, give us some other characteristics of what those looked like and does it impact your time that you're sort of not willing to dip down to something that is, you know, slightly less profitable, maybe just dig into that a little bit more. Well, I think the first thing is around industry pivots. And so we've certainly made some decisions there. For example, to focus more on the industrial sector. That's been a conscious decision that we've made. So part of it starts with the industry focus.

Speaker Change: Okay, let's have a look.

Speaker Change: and then give us some more detail about it.

Speaker Change: What the pivot to more profitable engagements and interim approach to research means give us some other characteristics of what those looked like.

Speaker Change: Does it impact your tam that you're sort of not willing to dip down to something that is slightly less profitable, maybe just dig into that a little bit more to cook.

George Tong: And we made a decision that we would pivot the pro-search and interim businesses towards more profitable engagements. And with that, we made a decision that we would adjust the number of consultants in that business. So when you look at Pro Search and Interim. You're seeing, when you see the revenue decline, a big part of that story is not only the macro environment, which is definitely challenging as Bob said, but it's also decisions we made to move the business towards what we have now proven to be true, more profitable work.

Speaker Change: Well, I think the first thing is around...

Speaker Change: Industry Pevots.

Speaker Change: and so we've certainly made some decisions there. For example, to focus more on the industrial sector, that's been a conscious decision that we've made.

George Tong: And so, we've reduced the number of consultants in those business of years over year, like 25 percent. And now this last quarter, as Bob said, we did reinvest in the platform in terms of number of consultants, as well as putting money in the CapEx. Very helpful.

George Tong: Thank you.

Gary Burnison: The opportunity, a big opportunity there is outside the United States. Both those professional search and interim, both those businesses are undersized from given our brand in what they could be outside the United States, particularly in AMIA. And so I think you'll see us making investments in those businesses in Amia over the next few months to grow. And the other thing is to focus not only on industry, but geography, but the type of clients. And so, you know, we've got 14,000 clients around the world. We've got a laser focus on our marquee and regional clients, which are only about 350 of those 14,000.

Speaker Change: So part of it starts with the industry focus, the opportunity, a big opportunity there is outside the United States.

Speaker Change: Bow Toes.

Speaker Change: Professional Search and Interim, both those businesses are undersized from given our brand in what they could be outside the United States.

Speaker Change: Particularly in a Mia.

Speaker Change: And so I think you'll see us making investments in those businesses, in a meover the next few months to grow.

Speaker Change: And the other thing is to focus not only industry but geography but the type of clients.

Tobey Sommer: And next we go to the line of Tobey Sommer with Truist. Please go ahead. Thank you. I wanted to ask about your hiring of additional fee owners. Is that 5051 number? Is that a net number and maybe could you talk about how they're dispersed around the businesses and whether your posture for the balance of the year is still to be sort of a net hiring, hire and just come in a lot.

Speaker Change: and so...

Speaker Change: You know, we've got 14,000 clients around the world. We've got a laser focus on our marquee and regional.

Speaker Change: Klein switcher only.

Gary Burnison: And part of it is to make sure that we're moving all of our solutions towards that go-to-market approach, not exclusively, but we want to make sure that we are penetrating and driving deeper impact on our existing client base. It's cheaper in many, many respects. And so we've had over the past four or five quarters is huge push on making sure that on our marquee and regional accounts, we're bringing all of our solutions, including professional search and interim, to those clients. And a year ago, we thought that we weren't doing as good a job as we could, particularly around interim and pro search, given that interim was a relatively new offering for us; that we needed to make a bigger push on those solutions around marquee and regional accounts.

Speaker Change: about 350, those 14,000, and part of it is to make sure that we're moving all of our solutions.

Speaker Change: towards that go-to-market approach, not exclusively.

Tobey Sommer: Thanks. It is our posture. I'll have Bob, maybe he could break it down a little bit, but our posture over the next year is absolutely to grow the net consultants that we have across the platform. At the same time, we're going to make sure, like we've always done, that we do quarterly talent management, which any great company will do. I will tell you that we certainly have a bias for professional search interim consulting and digital.

Speaker Change: But we want to make sure that we are penetrating and driving deeper impact on our existing client base. It's cheaper in many, many respects.

Speaker Change: and so we've had over the past four or five quarters, it's a huge push.

Speaker Change: I'm making sure that on our Marqueen Regional Accounts

Speaker Change: We're bringing all of our solutions, including

Speaker Change: Perfessional Search and Interim to those clients and in a year ago we thought that we weren't doing as good a job as we could, particularly around the Interman Pro Search, given that Interim was a relatively new offering for us.

Tobey Sommer: Those areas, we're putting an increased focus on. Part of that is because of the decisions that we made a year ago to focus on more profitable work. So we do have an appetite to be in the market. We promoted a lot of people this last quarter and Bob, maybe you can provide a little bit more detail. The feeders that we brought on Toby were more concentrated across executive search and consulting. That's where I would say the line share the 50 or so that came on board where in those lines of business.

Speaker Change: That we need to make a bigger push.

Bob Rozek: And the other one that we still I'm not satisfied with is the digital penetration on the marquee and regional accounts. That's going to be a push for us over the next four quarters.

Speaker Change: On those solutions around marquee and regional accounts. And the other one that we still, I'm not satisfied with is...

Speaker Change: The Digital Penetration on the Marqueen Regional Account, that's going to be a push for us over the next four quarters.

Bob Rozek: Hey Gary, it's Bob. The only thing I would add as well is that when you bring these companies into our ecosystem, you know, they're connecting with our executive search partners who have phenomenal relationships, and so the companies are naturally operating at a higher level than perhaps they were, you know, prior to being accorded by Korn Ferry, so that drives up, you know, some of the profitability as well. Right.

Speaker Change: I hear it's Bob the other thing I would add as well is that when you bring these companies into our ecosystem

Speaker Change: You know, they're connecting with our executive search partners who have phenomenal relationships and so the companies.

Speaker Change: are naturally operating at a higher level than perhaps they were prior to being acquired by corn fairy. So that drives up some of the profitability as well.

Tobey Sommer: And is that 50 or so number sort of a reasonable way to think about things on a go-forward basis? Because this is from a modeling perspective, we're talking about 50 hires, but is that net of consistent talent management, et cetera? No, the 50 hires is gross. It was the gross number of hires we had this quarter. It was getting indicated we made some decisions and a couple of yellow lines of business to proactively performance manage folks out.

Tobey Sommer: Last question from you, if I could. Gary, you mentioned large engagements over two and a half million have tripled. Could you give us some context for over what period have they tripled as a year-to-year and in, you know, in approximate terms how many of those engagements there are. Thanks.

Gary Opel: Right, last question for me if I could Gary, you mentioned large engagements over two and a half million have tripled. Can you give some context for over what period have they tripled? Is that a year or a year? And, you know, an approximate term as how many of those engagements there are? Thanks.

Gary Burnison: Well, I'll have to have Bob give you the details. I'll tell you that I think even sequentially they've improved our backlog in consulting. At the end of the first quarter, it was essentially about the same backlog, and Bob can correct me as it was in the fourth quarter. And then in terms of some of the deaf, Bob, maybe you can comment on that. Yeah, I think the, I don't have the exact number of engagements told me, but when you look at the, you know, the backlog going into Q1 was approximately $150 million and going into Q2, it's roughly, you know, in the same ballpark where we saw the large increase in engagements above two and a half million.

Gary Opel: Well, I'll have that Bob give you the details. I'll tell you that I think even sequentially

Bob: Dave improved, our backlog in consulting at the end of the first quarter was essentially about the same backlog and Bob can correct me as it was in the fourth quarter.

Tobey Sommer: But I would say that the number of hires that you see, I would expect us to be for the next couple of quarters in that same range. Okay, that's helpful. And then, could you give us some more detail about what the pivot to more profitable engagements and internment research means, give us some other characteristics of what those looked like and does it impact your time that you're sort of not willing to dip down to something that is, you know, slightly less profitable, maybe just dig into that a little bit more could.

Bob: of an in terms of some of the depth Bob, maybe you can comment on that.

Bob: Yeah, I don't have the exact number of engagements totally, but when you look at the, you know, the backlog going into Q1 was approximately $150 million and going in the Q2, it's roughly, you know, in the same ballpark.

Bob Rozek: Those went from about three and a half million up to a little bit north to 12 million in just in that three-month period of time.

Speaker Change: We saw the large increase in the gauge, about 2.5 million, those went from about 3.5 million up to a little bit north of 12 million, and just in that 3 month period of time.

Tobey Sommer: Well, I think the first thing is around industry pivots. And so we've certainly made some some decisions there. For example, to to focus more on the industrial sector that's been a conscious decision that we've made. So part of it starts with the industry focus. The opportunity, a big opportunity there is outside the United States. Both those professional search and interim, both those businesses are undersized from given our brand in what they could be outside the United States, particularly in Amia.

Speaker Change: [inaudible]

Tobey Sommer: Do we leave Toby? Toby, are you still there? Are you muted? I am. I'm all set. That was my last question. Thank you very much. Thank you.

Speaker Change: Are you ready?

Speaker Change: Toby, are you still there?

Speaker Change: I needed it. I'm not set, that was my last question. Thank you very much.

Alex Sintar: And our last question will come from Alex Sintar with Baird.

Alex Sintar: Please go ahead. Hi, this is Alex and I'll try on some mark mark on. I want to thank you for taking my question. First off, thank you. I'm sorry; congratulations on extending margin strength. I've done a really good job keeping that, and I was wondering if you could touch on how that progress has been received internally. And I guess in particular how it was received in those newer internment professional services areas because you did mention quarterly talent management. Well, I think everybody, you know, recognizes the environment that we're in, and all those decisions go back well over a year.

Speaker Change: Thank you, and our last question will come from Alex Sintar with Beard, please go ahead.

Speaker Change: Hi, this is Alex and I'll show you on to Mark Marcon. I want to thank you for taking my question. First off, thank you. Sorry, congratulations. Alex, can you please mark in the strength.

Mark Marcon: I've done a really good job keeping that and I was wondering if you could touch on how that progress has been received internally. I guess in particular how it was received in those newer and German professional services areas because you did mention quarterly talent management.

Tobey Sommer: And so I think you'll you'll see us making investments in those businesses in Amia over the next few months to grow. And the other thing is to focus not only industry but geography, but the type of clients. And so, you know, we've got 14,000 clients around the world. We've got a laser focus on our marquee and regional clients, which are only about 350 of those 14,000. And part of it is to make sure that we're moving all of our solutions towards that go to market approach, not not exclusively, but we want to make sure that we are penetrating and driving deeper impact on our existing client base.

Speaker Change: Well, I think everybody recognizes the environment that we're in and all those decisions go back well over a year.

Gary Burnison: So nothing has really changed over the last three months, six months. You know, those decisions which were hard, we're done. We're done a year ago. And so, you know, when you take those decisions, those are the worst decisions that I have to make. And they weigh on my heart, my mind. But I, you know, we're past that. And, you know, I think everybody, you know, you look around and you see, you know, a very, very interesting environment, for sure. And I think employees recognize that, and colleagues recognize that. So I don't see any issues there.

Speaker Change: So nothing has really changed.

Speaker Change: Over the last three months, six months, you know, those decisions which were hard were done a year ago. And so, you know, when you take those decisions, those are the worst decisions that I have to make.

Speaker Change: and it way on my heart, my mind.

Speaker Change: [inaudible]

Speaker Change: and I think everybody, you look around and you see a very, very interesting environment for sure. I think employees recognize that, I think colleagues recognize that, so I don't see any issues there.

Alex Sintar: Okay, great.

Bob Rozek: And then, really quick, I was hoping to get a little bit more color regarding the confirmed orders by month. You mentioned July being out the year earlier. And I was just kind of wondering what you were seeing from flash reports at a current month, given the increasing signs of labor market suffering. Yeah, we don't, we can't, we don't know anything here in September. You know, I would just say the last four months have been pretty consistent with what you've seen. September is way too early to call.

Tobey Sommer: It's cheaper in many, many respects. And so we've we've had over the past four or five quarters is huge push on making sure that on our marquee and regional accounts, we're bringing all of our solutions, including professional search and interim to those clients. And a year ago, we thought that we weren't doing as good a job as we could, particularly around interim and pro search, given that interim was a relatively new offering for us, that we needed to make a bigger push on those solutions around marquee and regional accounts.

Speaker Change: Okay, great, and then really quick, I was hoping to get a little bit more color regarding the confirmed orders by month, you mentioned you're live being out the earlier, and I was just kind of wondering what you were seeing from black reports for the current month, given the increasing signs of labor market saw thing.

Speaker Change: Yeah, we don't know anything here in September. You know, I would just say the last four months have been pretty consistent with what you've seen, September's way purely to call.

Alex Sintar: Great.

Operator: Thank you.

Speaker Change: Good, thank you.

Operator: And we have no other questions. You may continue. Okay.

Gary Burnison: Thank you, everybody, for joining us. As I said at the beginning. I think for us, this is the beginning. I'm incredibly proud of our colleagues in our organization. And where this brand is off. We're operating around the world. So thank you for your time.

Speaker Change: And we have no other questions you may continue.

Tobey Sommer: And the other one that we still I'm not satisfied with is the digital penetration on the marquee and regional accounts. That's going to be a push for us over the next four quarters. Thank you, Gary. The only thing I would add, as well, is that when you bring these companies into our ecosystem, you know, they're connecting with our executive search partners who have phenomenal relationships, and so the companies are naturally operating at a higher level than perhaps they were, you know, prior to being accorded by Korn-Ferry, so that drives up, you know, some of the profitability as well.

Speaker Change: Okay, thank you everybody for joining us as I said at the beginning, I think for us as the beginning incredibly proud of our colleagues.

Speaker Change: and our organization and where this brand is operating around the world. So thank you for your time. Thank you for listening and we'll talk to you next time.

Operator: Thank you for listening, and we'll talk to you next time.

Operator: Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect. We're sorry. Your conference is ending now. Please hang up.

Speaker Change: Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.

Speaker Change: [inaudible]

Tobey Sommer: Right. Last question from you, if I could. Gary, you mentioned large engagements over two and a half million have tripled. Could you give us some context for over what period have they tripled, as a year-to-year, in, you know, in approximate terms, how many of those engagements there are? Thanks. Well, I'll have to have Bob give you the details. I'll tell you that I think even sequentially they've improved our backlog in consulting at the end of the first quarter was essentially about the same backlog.

Speaker Change: [inaudible]

Speaker Change: [inaudible]

Speaker Change: We're sorry, your conference is ending now, please hang up.

Speaker Change: [inaudible] Times, New York Times,

Tobey Sommer: And Bob can correct me as it was in the fourth quarter. And then in terms of some of the depth, Bob, maybe you can comment on that. Yeah, I think the, I don't have the exact number of engagements totally, but when you look at the, you know, the backlog going into Q1 was approximately $150 million and going into Q2, it's roughly, you know, in the same ballpark.

Tobey Sommer: Where we saw the large increase in engagements above two and a half million, those went from about three and a half million up to a little bit north to 12 million in just in that three month period of time. Do we leave Toby? Toby, are you still there? Are you muted? I am. I'm all set. That was my last question. Thank you very much. Thank you.

Alex Sintar: And our last question will come from Alex Sintar with Baird. Please go ahead. Hi, this is Alex and I'll try on some mark mark on I want to thank you for taking my question. First off, thank you. I'm sorry, congratulations. I'm extending margin strength. I've done a really good job keeping that and I was wondering if you could touch on how that progress has been received internally. I guess in particular how it was received in those newer internment professional services areas because you did mention quarterly talent management.

Alex Sintar: Well, I think everybody, you know, recognizes the environment that that we're in and all those decisions go back well over a year. So nothing has really changed over the last three months, six months. You know, those decisions which were hard were done a year ago. And so, you know, when you take those decisions, those are those are the worst decisions that I have to make. And they lay on my mind. But I, you know, we're we're past that.

Alex Sintar: And, you know, I think everybody, you know, you look around and you see, you know, a very, very interesting environment for sure. And I think I think employees recognize that and colleagues recognize that. So I don't see any issues there.

Alex Sintar: Okay, great. And then really quick, I was hoping to get a little bit more color regarding the confirmed orders by month. You mentioned July being out the year earlier. And I was just kind of wondering what you were seeing from flash reports of the current month, given the increasing signs of labor market suffering. Yeah, we don't, we can't, we don't know anything here in September. You know, I would just say the last four months have been pretty consistent with what you've seen. September is way too early to call.

Operator: Great. Thank you. And we have no other questions. You may continue. Okay. Thank you, everybody, for joining us.

Gary Burnison: As I said at the beginning, I think for us, this is the beginning. I'm incredibly proud of our colleagues in our organization. And where this brand is off. We're operating around the world. So thank you for your time. Thank you for listening. And we'll talk to you next time.

Operator: Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect. We're sorry. Your conference is ending now.

Operator: Please hang up.