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. 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, plan 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. 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. 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 reconciliations to the most directly comparable GAAP financial measure, is contained in the financial presentation and earnings release relating to this call, both of which are posted in the Investor Relations section of the company's website at www.kornferry.com. With that, I'll turn the call over to Mr. Burnison. Please go ahead, Mr. 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 first, as I was 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 have become and the opportunity ahead of us. From sport to industry, we're operating in the market at its highest level in over 5 decades in business. I can remember the first acquisition we did in our consulting and digital offerings. We doubled the revenue of the business to about $30 million. Today, those solutions are almost $1.1 billion 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 tapping not only a large addressable market, but one that is extremely synergistic to our brand. Furthermore, more recently, we've seen improved growth in executive search, and we're experiencing stable trends across professional search and RPO. Our marquee regional accounts make up 37% of our portfolio, and cross referrals are about 27% of our revenue. Consulting rates have increased by over one-third over the last few years, reflecting the value of our solutions, and SaaS agreements now exceed one-third of our digital new business. And as importantly, we've added tremendous intellectual property 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. So yes, 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 during 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 intellectual property and incredible colleagues and expertise across our firm to drive even deeper impact for our clients. 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. This is just the beginning for Korn Ferry. I'm convinced that we're only scratching the surface of tapping into an estimated $300 billion market opportunity. And going forward to capitalize on that opportunity, our strategy will be anchored on 5 strategic pillars. Number one is our go-to-market approach and nowhere is that more pronounced than with our marquee regional accounts, in which almost all of our marquee clients use at least 3 of our service offerings and benefit from our full suite of offerings and expertise. Second, innovation and IP. Our continued investments in IP are giving clients a shared language to describe what great organizations and talent look like. We are embedding that language across their enterprise and throughout their talent assessment, coaching, and development processes. 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. 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 an opportunity. Our firm sits 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. With that, Bob, I'll turn it over to you.

Thank you, Gary, and good afternoon, good morning. Our results for the first quarter reflect a strong start to our new fiscal year, with both fee revenue and profitability meeting or exceeding the upper end of our guidance. We have expanded our adjusted EBITDA margin for the fifth consecutive quarter. Our consulting and interim bill rates increased year-over-year by 8% and 9%, respectively. Employee productivity, measured by fee revenue per headcount, is now 36% higher than pre-pandemic levels. In the current business environment, this quarter served as another validation of our long-term strategy. In short, we continue to successfully execute our plan, providing value to our clients through unique and differentiated solutions and reinforcing our position as a trusted brand in organizational consultancy. Our consolidated fee revenue for the first quarter reached $675 million, which represents a modest 2% decline year-over-year at constant currency. The first quarter's fee revenue was bolstered by continued stability in Consulting and Digital, and we observed a return to growth in our executive search division. We also noticed stabilizing demand for our other permanent placement talent acquisition solutions, including Pro Search and RPO. In the first quarter, we achieved $111 million of adjusted EBITDA, with our adjusted EBITDA margin increasing to 16.5%, and our adjusted diluted earnings per share rose year-over-year to $1.18 per share. The growth in profitability during the first quarter is significant, driven by improvements in employee productivity and disciplined cost management. Our capacity to achieve greater operating leverage in a challenging and uncertain business environment is crucial, positioning us for enhanced earnings growth once the business climate improves and top-line growth resumes. Lastly, regarding our capital deployment in the first quarter, while Gregg will provide additional details, I want to emphasize our confidence in maintaining stability while also reinvesting in the business to capture future growth and return capital to shareholders. In the first quarter, we reinvested in the business by hiring around 50 fee earners across all lines of business, contributing $11 million in capital for digital product upgrades and technology for our other business lines. Additionally, we returned a total of $43 million to shareholders through dividends and share repurchases. Now, I will turn the call over to Gregg, who will share some 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 continued 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% on 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, 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 up 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, which includes $84 million of 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. Adjusted fully diluted earnings per share in the first quarter were $1.18, up $0.19 or 19% year-over-year. Fully diluted earnings per share measured by GAAP were $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 of fiscal '25, we deployed $63 million of cash, investing $11 million in capital expenditures, using $9 million for debt service, and returning $43 million to shareholders, which included $19.5 million in dividends and $23.5 million used to repurchase 351,000 shares. Now I'll turn the call over to Tiffany to review our operating segments in more detail.

Thanks, Greg. Starting with KF Digital, fee 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 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 disciplined 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. Consulting's average bill rate was $425 per hour in the first quarter, which was up 8% year-over-year. The 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. 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. The consultant productivity in the first quarter for Professional Service 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 1 year ago and is reflective of the added value of being part of the broader Korn Ferry ecosystem. The 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 4 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 wins. The adjusted EBITDA margin for RPO improved to 14.1% in the first quarter, driven by both greater fusion staff productivity and disciplined cost management. 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 revenue per consultant improved sequentially in the first quarter, driving adjusted EBITDA to $49 million with an adjusted EBITDA margin of 23.7%. 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. 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 line with expectations. 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 diluted earnings per share to range from $1.14 to $1.26. Finally, we expect our GAAP diluted earnings per share in the first quarter to range from $1.11 to $1.23. In closing, I will reiterate the message from our last earnings call. The economic environment we are operating in today is full of contradictions, uncertainties, and new challenges. 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 disciplined maintenance of our cost base and driving productivity to maintain our profitability while making measured investments to position the firm for long-term growth. As I always say, we are at the beginning of what's going to be a very long ball game. 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.

First one I had was just on margins. I think, again, it's 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're already kind of at 16.5% 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 businesses?

I do think there could be upside to that. But for now, we feel very comfortable with the 16% to 18%. A year ago, what we've seen over the last year is exactly what we predicted. We thought there would be a multi-quarter reset in economies around the world, and it has played out exactly as we thought. We made some very hard decisions a year ago around our operating structure, and those have turned out to be very, very advantageous in hindsight. At the same time, we are reinvesting in the business. 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% to 18%.

For my follow-up here, just looking at the revenue guidance, I think if I take the midpoint, it looks like you're expecting about a 1% sequential decline Q1 to Q2. Typically, I think you see a pretty nice uptick most years in Q2. So I was 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?

Yes, I think you're right. Generally, we see an uptick of around 4%, something like that. We've had two snap elections, continued trade conflicts, the wars that you know about, and the Olympics in Paris. There has just been a lot going on, and given that environment in July and August with events around the world, we feel like the business will be flat in the next quarter. The other thing happening is on the consulting business, and you see it in the rate per hour. We're moving towards much bigger and more impactful engagements. For example, engagements over $2.5 million have tripled. Those take longer to work through, and that's certainly playing into it as well.

And just maybe to quickly follow up because you mentioned kind of the snap elections in Europe, I believe. Are you seeing any impact or hearing from clients that there could be some impact in the near term in North America with the U.S. election coming up at all?

We haven't seen that. Speaking of EMEA, new business trailing four months has been up three of the four months, which, given the summertime, is a very, very strong sign. But no, we have not seen that in the United States.

Your North American exec search business saw a 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. The business today is actually doing slightly more in new business and revenue than before the pandemic. Our productivity is very good at about $1.5 million or so. We look at that and say there's plenty of room to run, for sure, in that search business. The level of work that we're doing these days in executive search is probably the highest that I've seen, which ranges from sport to industry. We've seen quite a bit of work recently focused around succession. That has clearly been driving some of our search business as well as our consulting business. The broader backdrop is the demographic trends; peak 65, the number of people turning age 65 over the next 2 to 3 years. The United States is probably going to lose 4 to 5 million workers a year from the last of the baby boom retirements. That definitely provides sustained momentum. We've seen an uptick since we last talked to you, and we'll have to see what the environment holds in the future, but we feel very comfortable and confident about where we're operating in the executive search business in North America.

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?

I think one thing to consider is the broader perspectives on the results. One is China, and although not a significant part of the firm, the situation there has definitely impacted our growth rates. I read somewhere that before the pandemic, there were something like 325 flights to mainland China per week from the United States. Now it’s like 35. That has definitely reflected in our business. So our growth would have been substantially different if China had not been a factor. On both the professional search and interim side, it ties back to a decision we made slightly over a year ago. We saw this multi-quarter reset coming and decided to pivot Pro Search and interim businesses toward more profitable engagements. With that, we made adjustments to the number of consultants in that business. So the revenue decline you’re seeing there is being affected not only by the macro environment, which is challenging, but also by decisions we made to prioritize more profitable work. We reduced the number of consultants in those areas by about 25%, but as Bob mentioned last quarter, we have reinvested in the platform in terms of numbers and CapEx.

I wanted to ask about your hiring of additional fee earners. Is that 50, 61 number a net number? And could you talk about how they're dispersed across the businesses and whether your posture for the balance of the year is still to be sort of a net hirer?

It is our posture. I'll have Bob maybe 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 manage talent effectively. I will tell you that we certainly have a bias for professional search, interim, consulting, and digital. We're focused on those areas due to our decisions last year emphasizing more profitable work. We do have an appetite to be in the market and promoted many people this last quarter. Bob, can you provide some detail?

The fee earners we brought on, Tobey, were more concentrated across executive search and consulting. That's where, I would say, the lion's share of the 50 that came on board were in those lines of business.

Is that 50 number sort of a reasonable way to think about things on a go-forward basis? Because just from a modeling perspective, we're talking about 50 hires, but is that net of consistent talent management, etc.?

No, the 50 hires is gross. I mean, it was the gross number of hires we had this quarter. As Gary indicated, we made decisions in a couple of other lines of business to proactively manage performance. Yes, I would expect the number of hires you see to be in that same range for the next couple of quarters.

Can you give us more detail about what the pivot to more profitable engagements in interim and Pro Search means? What are those characteristics? Does it impact your total addressable market that you're sort of not willing to dip down to something that is slightly less profitable? Maybe just dig into that a little more.

I think the first thing is around industry pivots. We've made decisions there, for example, to focus more on the industrial sector. That has been a conscious decision. Part of this starts with industry focus, but there's opportunity outside the United States. Both Professional Search and interim businesses are undersized given our brand. We could capture much more outside the United States, particularly in EMEA. We expect to make investments in those areas over the next few months to grow. It’s about focusing not only on industry and geography but also on the type of clients. We have 14,000 clients globally, with a laser focus on our marquee and regional clients, only about 350 of those 14,000. We want to ensure that we’re providing all of our solutions to this targeted group. We've had a large push on this over the past 4 or 5 quarters to drive deeper impact.

The other thing I would add is that when you bring these companies into our ecosystem, they're connecting with our executive search partners who have phenomenal relationships. So the companies operate at a higher level than perhaps they were prior to being acquired by Korn Ferry, which also drives up some of the profitability.

Last question for me, if I could. Gary, you mentioned large engagements over $2.5 million have tripled. Could you give us some context for over what period they have tripled? Is that year-over-year? And in approximate terms, how many of those engagements there are?

I'll have to have Bob give you the details. I think even sequentially, they've improved. Our backlog in consulting at the end of the first quarter was about the same as in the fourth quarter. In terms of depth, Bob, maybe you can comment on that.

Yes. I think the backlog going into Q1 was approximately $150 million. Going into Q2, it's roughly in the same ballpark. We saw the large increase in engagements above $2.5 million go from about $3.5 million up to a little bit north of $12 million in just a 3-month period.

This is Alex Sinatra on for Mark Marcon. First off, congratulations on the continued margin strength. You've done a really good job keeping that. I was wondering if you could touch on how that progress has been received internally, particularly in those newer interim and professional services areas because you did mention quarterly talent management?

Everyone recognizes the current environment. Those decisions, which were made well over a year ago, have been viewed positively. Nothing has really changed over the last three or six months; those decisions were tough but necessary. We're past that. There are no issues in this area.

I was hoping to get a little more color regarding the confirmed orders by month. You mentioned July being up year-over-year. What are you seeing from flash reports for the current month, given the increasing signs of softening in the labor market?

We don't have insights here in September. I would just say the last four months have been consistent with what you've seen. September is too early to call.

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