KORN FERRY

Previous wording

This Quarterly Report on Form 10-Q may contain certain statements that we believe are, or may be considered to be, “forward-looking” statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “will,” “likely,” “estimates,” “potential,” “continue” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals, including the timing and anticipated impacts of our business strategy, expected demand for and relevance of our products and services, and expected results of our business diversification strategy, are also forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statement. The principal risk factors that could cause actual performance and future actions to differ materially from the forward-looking statements include, but are not limited to, those relating to global and local political and or economic developments in or affecting countries where we have operations, such as inflation, trade wars, global slowdowns, or recessions, competition, geopolitical tensions, shifts in global trade patterns, changes in demand for our services as a result of automation, dependence on and costs of attracting and retaining qualified and experienced consultants, impact of inflationary pressures on our profitability, maintaining our relationships with customers and suppliers and retaining key employees, maintaining our brand name and professional reputation, potential legal liability and regulatory developments, portability of client relationships, consolidation of or within the industries we serve, changes and developments in governmental laws and regulations, evolving investor and customer expectations with regard to corporate responsibility matters, currency fluctuations in our international operations, risks related to growth, alignment of our cost structure, including as a result of workforce, real estate, and other restructuring initiatives, restrictions imposed by off-limits agreements, reliance on information processing systems, cyber security vulnerabilities or events, changes to data security, data privacy, and data protection laws, dependence on third parties for the execution of critical functions, limited protection of our intellectual property (“IP”), our ability to enhance and develop new technology, including artificial intelligence ("AI"), our ability to successfully recover from a disaster or other business continuity problems, employment liability risk, an impairment in the carrying value of goodwill and other intangible assets, treaties, or regulations…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Quarterly Report on Form 10-Q may contain certain statements that we believe are, or may be considered to be, “forward-looking” statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “will,” “likely,” “estimates,” “potential,” “continue” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals, including the timing and anticipated impacts of our business strategy, expected demand for and relevance of our products and services, and expected results of our business diversification strategy, are also forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause our actual results or outcomes, or the timing of our results or outcomes, to differ materially from those contemplated by the relevant forward-looking statement. The principal risk factors that could cause actual performance, results, outcomes and timing and future actions to differ materially from the forward-looking statements include, but are not limited to, those relating to global and local political and or economic developments in or affecting countries where we have operations, such as inflation, trade wars, global slowdowns, or recessions, competition, geopolitical tensions, shifts in global trade patterns, changes in demand for our services as a result of automation, dependence on and costs of attracting and retaining qualified and experienced consultants, impact of inflationary pressures on our profitability, maintaining our relationships with customers and suppliers and retaining key employees, maintaining our brand name and professional reputation, potential legal liability and regulatory developments, portability of client relationships, consolidation of or within the industries we serve, changes and developments in governmental laws and regulations, evolving investor and customer expectations with regard to corporate responsibility matters, currency fluctuations in our international operations, risks related to growth, alignment of our cost structure, including as a result of workforce, real estate, and other restructuring initiatives, restrictions imposed by off-limits agreements, reliance on information processing systems, cyber security vulnerabilities or events, changes to data security, data privacy, and data protection laws, dependence on third parties for the execution of critical functions, limited protection of our intellectual property (“IP”), our ability to enhance and develop new technology, including artificial intelligence (“AI”), our ability to successfully recover from a disaster or other business continuity problems, employment liability risk, an impairment in…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

•Fee revenue in Q3 FY'25 was $668.7 million, flat year over year.

Current wording

•Fee revenue in Q1 FY'26 was $708.6 million, a year-over-year increase of 5%.

Previous wording

Net Income Attributable to Korn Ferry

Current wording

•Net income attributable to Korn Ferry was $66.6 million, an increase of 6% year-over-year, with a margin of 9.4%, an increase of 10bps year-over-year.

Previous wording

•Diluted earnings per share was $1.10 in Q3 FY'25.

Current wording

•Diluted earnings per share was $1.26 in Q1 FY'26, up 8% compared to the year-ago quarter.

Previous wording

The Company evaluates performance and allocates resources based on the chief operating decision maker’s review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other impairments charges). For the three months ended January 31, 2025, Adjusted EBITDA excluded $2.5 million of impairment of right-of-use assets, $2.1 million of integration/acquisition costs, $1.3 million of restructuring charges, net, and $0.5 million impairment of fixed assets. For the nine months ended January 31, 2025, Adjusted EBITDA excluded $7.1 million of integration/acquisition costs, $2.5 million of impairment of right-of-use assets, $1.9 million of restructuring charges, net, and $0.5 million impairment of fixed assets. For the three months ended January 31, 2024, Adjusted EBITDA excluded $4.6 million of restructuring charges, net, and $3.9 million of integration/acquisition costs. For the nine months ended January 31, 2024, Adjusted EBITDA excluded $68.6 million of restructuring charges, net, $13.1 million of integration/acquisition costs, $1.6 million of impairment of right-of-use assets, and $1.6 million impairment of fixed assets.

Current wording

The Company evaluates performance and allocates resources based on the chief operating decision maker’s review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other impairments charges). For the three months ended July 31, 2025, Adjusted EBITDA excluded $1.5 million of integration/acquisition costs. For the three months ended July 31, 2024, Adjusted EBITDA excluded $1.1 million of integration/acquisition costs.

Previous wording

In the tables that follow, the Company presents a subtotal for Executive Search Adjusted EBITDA and a single percentage for Executive Search Adjusted EBITDA margin, which reflects the aggregate of all of the individual Executive Search Regions. These figures are non-GAAP financial measures and are presented as they are consistent with the Company’s lines of business and are financial metrics used by the Company’s investor base.

Current wording

In the tables that follow, the Company presents a subtotal for Executive Search Adjusted EBITDA and a single percentage for Executive Search Adjusted EBITDA margin, which reflects the aggregate of all of the individual Executive Search Regions. These figures are non-GAAP financial measures and are presented as they are consistent with the Company’s Solution areas and are financial metrics used by the Company’s investor base.

Previous wording

Digital. Digital reported fee revenue of $90.8 million, an increase of $0.5 million, or 1%, in the three months ended January 31, 2025, compared to $90.3 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $2.1 million, or 2%, in the three months ended January 31, 2025 compared to the year-ago quarter.

Current wording

Digital. Digital reported fee revenue of $89.2 million, an increase of $1.0 million, or 1%, in the three months ended July 31, 2025 compared to $88.2 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $1.6 million, or 2%, in the three months ended July 31, 2025 compared to the year-ago quarter.

Previous wording

Executive Search EMEA. Executive Search EMEA reported fee revenue of $47.8 million, a decrease of $1.2 million, or 2%, in the three months ended January 31, 2025 compared to $49.0 million in the year-ago quarter. The decrease in fee revenue was due to a 3% decrease in the number of engagements billed, partially offset by a 2% increase in the weighted-average fee billed per engagement (calculated using local currency) during the three months ended January 31, 2025 compared to the year-ago quarter.

Current wording

Executive Search EMEA. Executive Search EMEA reported fee revenue of $53.8 million, an increase of $7.8 million, or 17%, in the three months ended July 31, 2025 compared to $46.0 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $2.6 million, or 6%, in the three months ended July 31, 2025 compared to the year-ago quarter. The increase in fee revenue was primarily due to a 16% increase in the number of engagements billed, partially offset by a 5% decrease in weighted-average fee billed per engagement (calculated using local currency) during the three months ended July 31, 2025 compared to the year-ago quarter.

Previous wording

Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $63.7 million, a decrease of $1.5 million, or 2%, in the nine months ended January 31, 2025 compared to $65.2 million in the year-ago period. The decrease in fee revenue was due to a 3% decrease in the number of engagements billed, partially offset by a 2% increase in the weighted-average fee billed per engagement (calculated using local currency) during the nine months ended January 31, 2025 compared to the year-ago period.

Current wording

Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $24.7 million, an increase of $4.1 million, or 20%, in the three months ended July 31, 2025 compared to $20.6 million in the year-ago quarter. The increase in fee revenue was primarily due to a 20% increase in the number of engagements billed during the three months ended July 31, 2025 compared to the year-ago quarter.

Previous wording

Professional Search & Interim. Professional Search & Interim reported fee revenue of $372.8 million, a decrease of $38.7 million, or 9%, in the nine months ended January 31, 2025 compared to $411.5 million in the year-ago period. The decrease in fee revenue was primarily due to a decrease in interim fee revenue of $24.4 million as well as a decrease in permanent placement fee revenue of $14.3 million, each of which resulted from lower demand in the current economic environment.

Current wording

Professional Search & Interim. Professional Search & Interim reported fee revenue of $133.9 million, an increase of $12.2 million, or 10%, in the three months ended July 31, 2025 compared to $121.7 million in the year-ago quarter. The increase in fee revenue was primarily due to an increase in interim fee revenue of $9.7 million as a result of the acquisition of Trilogy International effective November 1, 2024.

Previous wording

Digital compensation and benefits expense decreased by $2.5 million, or 5%, to $43.3 million in the three months ended January 31, 2025 compared to $45.8 million in the year-ago quarter. Exchange rates favorably impacted compensation and benefits by $1.0 million, or 2%, in the three months ended January 31, 2025 compared to the year-ago quarter. The decrease in compensation and benefits expense was primarily due to a decrease in commission expense of $1.6 million and lower performance-related bonus expense of $0.8 million in the three months ended January 31, 2025 compared to the year-ago quarter.

Current wording

Digital compensation and benefits expense decreased by $0.8 million, or 2%, to $44.5 million in the three months ended July 31, 2025 compared to $45.3 million in the year-ago quarter. The decrease in compensation and benefits expense was primarily due to lower performance-related bonus expense of $5.8 million, partially offset by increases in severance expense, salaries and related payroll taxes and commission expense of $1.6 million, $1.5 million and $1.1 million, respectively, in the three months ended July 31, 2025 compared to the year-ago quarter.

Previous wording

Executive Search North America compensation and benefits expense decreased by $11.9 million, or 12%, to $88.7 million in the three months ended January 31, 2025 compared to $100.6 million in the year-ago quarter. Compensation and benefits expense decreased primarily due to a decrease in deferred compensation expense of $9.8 million as a result of a decrease in the fair value of participants' accounts in the three months ended January 31, 2025 compared to the year-ago quarter and lower performance-related bonus expense of $2.4 million.

Current wording

Executive Search North America compensation and benefits expense decreased by $1.7 million, or 2%, to $99.5 million in the three months ended July 31, 2025 compared to $101.2 million in the year-ago quarter. Compensation and benefits expense decreased primarily due to a decrease in performance-related bonus expense of $2.6 million, partially offset by an increase of $0.6 million in severance-related costs in the three months ended July 31, 2025 compared to the year-ago quarter.

Previous wording

Corporate general and administrative expenses increased by $2.5 million, or 19%, to $15.5 million in the three months ended January 31, 2025 compared to $13.0 million in the year-ago quarter. The increase in general and administrative expenses was primarily due to a foreign exchange loss of $0.6 million in the three months ended January 31, 2025 compared to a foreign exchange gain of $0.8 million in the year-ago quarter.

Current wording

Executive Search Asia Pacific compensation and benefits expense increased by $2.7 million, or 19%, to $17.1 million in the three months ended July 31, 2025 compared to $14.4 million in the year-ago quarter. The increase in compensation and benefits expense was primarily due to an increase in performance-related bonus expense of $1.8 million driven by the higher segment fee revenue in the three months ended July 31, 2025 compared to the year-ago quarter.

Previous wording

Consulting general and administrative expenses decreased by $2.6 million, or 6%, to $38.3 million in the nine months ended January 31, 2025 compared to $40.9 million in the year-ago period. The decrease in general and administrative expenses was primarily due to decreases in legal and other professional fees and bad debt expense of $0.8 million and $0.7 million, respectively, in the nine months ended January 31, 2025 compared to the year-ago period. Also contributing to the decrease was an impairment of right-to-use-assets of $0.5 million in the year-ago period.

Current wording

General and administrative expenses increased by $3.9 million, or 7%, to $63.9 million in the three months ended July 31, 2025 from $60.0 million in the year-ago quarter. The increase in general and administrative expenses was primarily due to increases of $2.4 million and $1.5 million in legal and other professional fees and computer software licenses, respectively, in the three months ended July 31, 2025 compared to the year-ago quarter.

Previous wording

Executive Search EMEA general and administrative expenses was $4.4 million in the three months ended January 31, 2025, essentially flat compared to $4.3 million in the year-ago quarter.

Current wording

Executive Search EMEA general and administrative expenses were $4.4 million in the three months ended July 31, 2025, essentially flat compared to $4.1 million in the year-ago quarter.

Previous wording

Executive Search Asia Pacific general and administrative expenses decreased by $0.6 million, or 24%, to $1.9 million in the three months ended January 31, 2025, compared to $2.5 million in the year-ago quarter.

Current wording

Executive Search Asia Pacific general and administrative expenses were $2.1 million in the three months ended July 31, 2025, essentially flat compared to $2.2 million in the year-ago quarter.

Previous wording

Executive Search Latin America general and administrative expenses decreased by $0.4 million, or 31%, to $0.9 million in the three months ended January 31, 2025 compared to $1.3 million in the year-ago quarter.

Current wording

Executive Search Latin America general and administrative expenses were $0.9 million in the three months ended July 31, 2025, a slight increase compared to $0.2 million in the year-ago quarter.

Previous wording

Professional Search & Interim general and administrative expenses decreased by $0.6 million, or 10%, to $5.4 million in the three months ended January 31, 2025 compared to $6.0 million in the year-ago quarter.

Current wording

Professional Search & Interim general and administrative expenses were $5.1 million in the three months ended July 31, 2025, essentially flat compared to $5.2 million in the year-ago quarter.

Previous wording

General and administrative expenses decreased by $4.4 million, or 2%, to $189.9 million in the nine months ended January 31, 2025 from $194.3 million in the year-ago period. The decrease in general and administrative expenses was primarily due to decreases in bad debt expense and legal and other professional fees of $4.3 million and $2.6 million, respectively, in the nine months ended January 31, 2025 compared to the year-ago period, partially offset by an increase in integration/acquisition costs of $2.3 million.

Current wording

Corporate general and administrative expenses increased by $2.9 million, or 21%, to $16.9 million in the three months ended July 31, 2025, compared to $14.0 million in the year-ago quarter. The increase in general and administrative expenses was primarily due to an increase in legal and other professional fees of $3.0 million in the three months ended July 31, 2025 compared to the year-ago quarter.

Previous wording

Cost of services expense consists of contractor and product costs related to delivery of various services and products through Consulting, Digital, Professional Search & Interim and RPO. Cost of services expense increased by $2.2 million, or 3%, to $78.0 million in the three months ended January 31, 2025 compared to $75.8 million in the year-ago quarter. Professional Search & Interim accounts for $2.5 million of the increase due to contractor costs following the Trilogy acquisition, which performs a significant portion of interim services. Interim services have a higher cost of service expense as compared to the Company's other segments.

Current wording

Cost of services expense consists of contractor and product costs related to delivery of various services and products through Consulting, Digital, Professional Search & Interim and RPO. Cost of services expense increased by $9.7 million, or 14%, to $77.2 million in the three months ended July 31, 2025 compared to $67.5 million in the year-ago quarter. Professional Search & Interim accounted for $9.4 million of the increase due to an increase in fee revenue in the segment as a significant amount of interim services they perform have a higher cost of service expense as compared to the Company's other segments.

Previous wording

Net income attributable to Korn Ferry increased by $77.8 million, or 75%, to $181.8 million in the nine months ended January 31, 2025, as compared to $104.0 million in the year-ago period. The increase in net income attributable to Korn Ferry was primarily due to decreases in compensation and benefits expense, restructuring charges, net, and cost of services expense in the nine months ended January 31, 2025 compared to the year-ago period, partially offset by lower fee revenues and an increase in income tax provision. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 9% and 5% in the nine months ended January 31, 2025 and 2024, respectively.

Current wording

Net income attributable to Korn Ferry increased by $4.0 million, or 6%, to $66.6 million in the three months ended July 31, 2025, as compared to $62.6 million in the year-ago quarter. The increase in net income attributable to Korn Ferry was primarily due to an increase in fee revenue of $33.7 million, partially offset by increased cost of services expense of $9.7 million, compensation and benefits expense of $9.6 million, general and administrative expenses of $3.9 million, depreciation and amortization expenses of $3.1 million and income tax provision of $2.9 million in the three months ended July 31, 2025 compared to the year-ago quarter. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 9% in both the three months ended July 31, 2025 and 2024.

Previous wording

Consulting Adjusted EBITDA was $28.0 million in the three months ended January 31, 2025, essentially flat compared to $27.8 million in the year-ago quarter. Consulting Adjusted EBITDA, as a percentage of fee revenue, was 18% and 17% in the three months ended January 31, 2025 and 2024, respectively.

Current wording

Consulting Adjusted EBITDA was $28.8 million in the three months ended July 31, 2025, a decrease of $0.5 million, or 2%, as compared to $29.3 million in the year-ago quarter. Consulting Adjusted EBITDA, as a percentage of fee revenue, was 17% in both the three months ended July 31, 2025 and 2024.

Previous wording

Digital Adjusted EBITDA increased by $1.0 million, or 4%, to $28.4 million in the three months ended January 31, 2025 as compared to $27.4 million in the year-ago quarter. The increase in Adjusted EBITDA was primarily driven by improved consultant productivity and disciplined cost management. Digital Adjusted EBITDA, as a percentage of fee revenue, was 31% and 30% in the three months ended January 31, 2025 and 2024, respectively.

Current wording

Digital Adjusted EBITDA was $27.6 million in the three months ended July 31, 2025, an increase of $1.0 million, or 4%, as compared to $26.6 million in the year-ago quarter. This increase in Adjusted EBITDA was primarily driven by an increase in fee revenue. Digital Adjusted EBITDA, as a percentage of fee revenue, was 31% and 30% in the three months ended July 31, 2025 and 2024, respectively.

Previous wording

Executive Search North America Adjusted EBITDA increased by $7.8 million, or 27%, to $37.2 million in the three months ended January 31, 2025 compared to $29.4 million in the year-ago quarter. The increase was mainly driven by an increase in fee revenue coupled with a decrease in performance-related bonus expense. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 29% and 24% in the three months ended January 31, 2025 and 2024, respectively.

Current wording

Executive Search North America Adjusted EBITDA increased by $6.1 million, or 17%, to $41.2 million in the three months ended July 31, 2025 compared to $35.1 million in the year-ago quarter. The increase was mainly driven by higher fee revenue in the segment, coupled with a decrease in compensation and benefits expense for the three months ended July 31, 2025 compared to the year-ago quarter. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 30% and 26% in the three months ended July 31, 2025 and 2024, respectively.

Previous wording

Executive Search EMEA Adjusted EBITDA was $7.8 million in both the three months ended January 31, 2025 and the year-ago quarter. Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, was 16% in both the three months ended January 31, 2025 and 2024.

Current wording

Executive Search EMEA Adjusted EBITDA increased by $1.8 million, or 25%, to $9.1 million in the three months ended July 31, 2025 compared to $7.3 million in the year-ago quarter. The increase was primarily driven by an increase in fee revenue, partially offset by an increase in compensation and benefits expense for the three months ended July 31, 2025 compared to the year-ago quarter. Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, was 17% and 16% in the three months ended July 31, 2025 and 2024, respectively.

Previous wording

Executive Search Asia Pacific Adjusted EBITDA was $4.5 million in both the three months ended January 31, 2025 and the year-ago quarter. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 21% in both the three months ended January 31, 2025 and 2024.

Current wording

Executive Search Asia Pacific Adjusted EBITDA increased by $1.3 million, or 31%, to $5.5 million in the three months ended July 31, 2025 compared to $4.2 million in the year-ago quarter. The increase was primarily driven by an increase in fee revenue, partially offset by an increase in compensation and benefits expense. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 22% and 20% in the three months ended July 31, 2025 and 2024, respectively.

Previous wording

Executive Search Latin America Adjusted EBITDA was $1.7 million in the three months ended January 31, 2025, essentially flat compared to $1.8 million in the year-ago quarter. Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, was 25% and 23% in the three months ended January 31, 2025 and 2024, respectively.

Current wording

Executive Search Latin America Adjusted EBITDA decreased by $1.3 million, or 46%, to $1.5 million in the three months ended July 31, 2025 compared to $2.8 million in the year-ago quarter. The decrease was primarily driven by a decrease in fee revenue for the three months ended July 31, 2025 compared to the year-ago quarter. Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, was 25% and 38% in the three months ended July 31, 2025 and 2024, respectively.

Previous wording

Professional Search & Interim Adjusted EBITDA was $27.3 million in the three months ended January 31, 2025, an increase of $3.5 million, or 15%, as compared to $23.8 million in the year-ago quarter. The increase in Adjusted EBITDA was mainly driven by a decrease in compensation and benefits expense (excluding integration/acquisition costs), partially offset by an increase in cost of services expense. Professional Search & Interim Adjusted EBITDA, as a percentage of fee revenue, was 21% and 18% in the three months ended January 31, 2025 and 2024, respectively.

Current wording

Professional Search & Interim Adjusted EBITDA was $28.0 million in the three months ended July 31, 2025, an increase of $2.3 million, or 9%, as compared to $25.7 million in the year-ago quarter. The increase in Adjusted EBITDA was mainly driven by higher fee revenue, partially offset by an increase in cost of services expense. Professional Search & Interim Adjusted EBITDA, as a percentage of fee revenue, was 21% in both three months ended July 31, 2025 and 2024.

Previous wording

Other income, net was $9.4 million in the three months ended January 31, 2025 compared to $23.8 million in the year-ago quarter. The difference was primarily due to lower gains from the increase in the fair value of our marketable securities that are held in trust to for the settlement of the Company's obligation under the Executive Capital Accumulation Plan ("ECAP") during the three months ended January 31, 2025 compared to the year-ago quarter.

Current wording

Other income, net was $12.8 million in the three months ended July 31, 2025 compared to $14.5 million in the year-ago quarter. The difference was primarily due to a decrease in the gains generated from the increased fair value of our marketable securities that are held in trust for the settlement of the Company's obligation under the Executive Capital Accumulation Plan and similar plans in Asia Pacific and Canada (collectively, "ECAP") during the three months ended July 31, 2025 compared to the year-ago quarter.

Previous wording

Interest expense, net primarily relates to the Company's 4.625% Senior Unsecured Notes due 2027 ("Notes") issued in December 2019, borrowings under Company purchased company-owned life insurance ("COLI") policies and interest cost related to our deferred compensation plans, which are partially offset by interest earned on cash and cash equivalent balances. Interest expense, net was $5.5 million in the three months ended January 31, 2025 compared to $4.9 million in the year-ago quarter. Interest expense, net increased due to an increase in interest expense on deferred compensation plans in the three months ended January 31, 2025 compared to the year-ago quarter.

Current wording

Interest expense, net primarily relates to the Company's 4.625% Senior Unsecured Notes due 2027 ("Notes") issued in December 2019, borrowings under company-owned life insurance ("COLI") policies and interest cost related to our deferred compensation plans, which are partially offset by interest earned on cash and cash equivalent balances. Interest expense, net was $3.5 million in the three months ended July 31, 2025 compared to $3.9 million in the year-ago quarter.

Previous wording

The provision for income tax was $22.8 million in the three months ended January 31, 2025, with an effective tax rate of 27.8%, compared to $9.0 million in the three months ended January 31, 2024, with an effective rate of 13.1%. In addition to the impact of U.S. state income taxes and the jurisdictional mix of earnings, which generally create variability in our effective tax rate over time, the decrease in the effective tax rate for the three months ended January 31, 2024 was due to a $9.7 million non-recurring tax benefit from actions taken in connection with the worldwide minimum tax that resulted in the release of a valuation allowance.

Current wording

The provision for income tax was $25.3 million in the three months ended July 31, 2025, with an effective tax rate of 27.2%, compared to $22.4 million in the three months ended July 31, 2024, with an effective tax rate of 25.8%. Our effective tax rate is primarily impacted by U.S. state income taxes and jurisdictional mix of earnings, which generally create variability in our effective tax rate over time.

Previous wording

Net income attributable to noncontrolling interest represents the portion of a subsidiary’s net earnings that are attributable to shares of such subsidiary not held by Korn Ferry that are included in the condensed consolidated results of income. Net income attributable to noncontrolling interest for the three months ended January 31, 2025 was $0.9 million, compared to $0.6 million in the three months ended January 31, 2024.

Current wording

Net income attributable to noncontrolling interest represents the portion of a subsidiary’s net earnings that are attributable to shares of such subsidiary not held by Korn Ferry that are included in the condensed consolidated results of income. Net income attributable to noncontrolling interest for the three months ended July 31, 2025 was $0.8 million, as compared to $1.7 million in the three months ended July 31, 2024.

Previous wording

The Company and its Board of Directors endorse a balanced approach to capital allocation. The Company’s long-term priority is to invest in growth initiatives, such as the hiring of consultants, the continued development of IP and derivative products and services and the investment in synergistic, accretive merger and acquisition transactions that are expected to earn a return that is superior to the Company's cost of capital. Next, the Company’s capital allocation approach contemplates the return of a portion of excess capital to stockholders, in the form of a regular quarterly dividend, subject to the factors discussed below and in the “Risk Factors” section of the Form 10-K. Additionally, the Company considers share repurchases on an opportunistic basis and subject to the terms of our Amended Credit Agreement (defined below) and Notes, as well as using excess cash to repay the Notes.

Current wording

The Company and its Board of Directors endorse a balanced approach to capital allocation. The Company’s long-term priority is to invest in growth initiatives, such as the hiring of consultants, the continued development of IP and derivative products and services and the investment in synergistic, accretive merger and acquisition transactions that are expected to earn a return that is superior to the Company's cost of capital. Next, the Company’s capital allocation approach contemplates the return of a portion of excess capital to stockholders, in the form of a regular quarterly dividend, subject to the factors discussed below and in the “Risk Factors” section of the Form 10-K. Additionally, the Company considers share repurchases on an opportunistic basis and subject to the terms of our Credit Agreement (defined below) and Notes, as well as using excess cash to repay the Notes.

Previous wording

On December 16, 2019, we completed a private placement of the Notes with a $400.0 million principal amount pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes were issued with a $4.5 million discount and will mature December 15, 2027, with interest payable semi-annually in arrears on June 15 and December 15 of each year, that commenced on June 15, 2020. The Notes represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness. We may redeem the Notes prior to maturity, subject to certain limitations and premiums defined in the indenture governing the Notes. The Notes are guaranteed by each of our existing and future wholly owned domestic subsidiaries to the extent such subsidiaries guarantee our obligations under the Credit Agreement (defined below). The indenture governing the Notes requires that, upon the occurrence of both a Change of Control and a Rating Decline (each as defined in the indenture), we shall make an offer to purchase all of the Notes at 101% of their principal amount, and accrued and unpaid interest. We used the proceeds from the offering of the Notes to repay $276.9 million outstanding under our prior revolving credit facility and to pay expenses and fees in connection therewith. As of January 31, 2025, the fair value of the Notes was $390.0 million, which is based on borrowing rates currently required of notes with similar terms, maturity and credit risk.

Current wording

On December 16, 2019, we completed a private placement of the Notes with a $400.0 million principal amount pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes were issued with a $4.5 million discount and will mature December 15, 2027, with interest payable semi-annually in arrears on June 15 and December 15 of each year, that commenced on June 15, 2020. The Notes represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness. We may redeem the Notes prior to maturity, subject to certain limitations and premiums defined in the indenture governing the Notes. The Notes are guaranteed by each of our existing and future wholly owned domestic subsidiaries to the extent such subsidiaries guarantee our obligations under the Credit Agreement (defined below). The indenture governing the Notes requires that, upon the occurrence of both a Change of Control and a Rating Decline (each as defined in the indenture), we shall make an offer to purchase all of the Notes at 101% of their principal amount, and accrued and unpaid interest. We used the proceeds from the offering of the Notes to repay $276.9 million outstanding under our prior revolving credit facility and to pay expenses and fees in connection therewith. As of July 31, 2025, the fair value of the Notes was $394.0 million, which is based on borrowing rates currently required of notes with similar terms, maturity and credit risk.

Previous wording

On June 24, 2022, we entered into an amendment (the "Amendment") to our December 16, 2019 Credit Agreement (the "Credit Agreement"; as amended by the Amendment, the “Amended Credit Agreement”) with the lenders party thereto and Bank of America, National Association as administrative agent, to, among other things (i) extend the existing maturity date of the revolving facility to June 24, 2027, (ii) replace the London interbank offered rate with Term Secured Overnight Financing Rate ("SOFR"), and (iii) replace the existing financial covenants with financial covenants described below. The Amended Credit Agreement provides for five-year senior secured credit facilities comprised of a $650.0 million revolving credit facility (the “Revolver”). The Amended Credit Agreement also provides that, under certain circumstances, the Company may incur term loans or increase the aggregate principal amount of revolving commitments by an aggregate amount of up to $250 million plus an unlimited amount subject to a consolidated secured net leverage ratio of 3.25 to 1.00. See Note 11 —Long-Term Debt for a further description of the Amended Credit Agreement. The Company has a total of $645.5 million available under the Revolver after $4.5 million of standby letters of credit have been issued as of January 31, 2025 and April 30, 2024. The Company had a total of$12.5 million and $13.2 million of standby letters with other financial institutions as of January 31, 2025 and April 30, 2024, respectively. The standby letters of credit were generally issued in connection with the entry into certain office premise leases.

Current wording

On July 1, 2025, we entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association as administrative agent and other lender parties thereto. The Credit Agreement provides for an $850.0 million five-year senior secured revolving credit facility (the “Facility”). The Credit Agreement also provides that, under certain circumstances, we may incur term loans or increase the aggregate principal amount of revolving commitments by an aggregate amount of up to $600.0 million plus an unlimited amount subject to a consolidated secured net leverage ratio of 3.25 to 1.00. The Credit Agreement replaced a previous credit agreement dated as of December 16, 2019 (as amended, amended and restated or otherwise modified, the “Prior Credit Agreement”) with Bank of America, National Association as administrative agent and other lenders party thereto. We repaid all outstanding obligations under the Prior Credit Agreement, and expenses and fees in connection therewith. See Note 11 —Long-Term Debtfor a further description of the Credit Agreement. The Company had a total of $845.6 million available under the Facility and $645.6 million available under the Prior Credit Agreement as of July 31, 2025 and April 30, 2025, respectively, after $4.4 million of standby letters of credit were issued as of both July 31, 2025 and April 30, 2025. The Company had a total of $13.2 million and $13.1 million of standby letters with other financial institutions as of July 31, 2025 and April 30, 2025, respectively. The standby letters of credit were generally issued as a result of entering into office premise leases.

Previous wording

On December 8, 2014, the Board of Directors adopted a dividend policy to distribute to our stockholders a regular quarterly cash dividend of $0.10 per share. Every quarter since the adoption of the dividend policy, the Company has declared a quarterly dividend. On June 21, 2021 and 2022, the Board of Directors increased the quarterly dividend to $0.12 per share and $0.15 per share, respectively. On June 26, 2023, the Board of Directors approved an increase of 20% in the quarterly dividend, which increased the quarterly dividend to $0.18 per share. On December 5, 2023, the Board of Directors approved an increase of 83% in the quarterly dividend, which increased the quarterly dividend to $0.33 per share. On June 12, 2024, the Board of Directors approved an increase in the quarterly dividend to $0.37 per share. On March 10, 2025, the Board of Directors approved a further increase of 30% in the quarterly dividend, which increased the quarterly dividend to $0.48 per share. The Amended Credit Agreement permits us to pay dividends to our stockholders and make share repurchases so long as there is no default under the Amended Credit Agreement, our total funded debt to adjusted EBITDA ratio (as set forth in the Amended Credit Agreement, the “consolidated net leverage ratio”) is no greater than 5.00 to 1.00, and we are in pro forma compliance with our financial covenant. Furthermore, our Notes allow us to pay $25.0 million of dividends per fiscal year with no restrictions plus an unlimited amount of dividends so long as our consolidated total leverage ratio is not greater than 3.50 to 1.00, and there is no default under the indenture governing the Notes. The declaration and payment of future dividends under the quarterly dividend program will be at the discretion of the Board of Directors and will depend upon many factors, including our earnings, capital requirements, financial conditions, the terms of our indebtedness and other factors our Board of Directors may deem to be relevant. Our Board of Directors may, however, amend, revoke or suspend our dividend policy at any time and for any reason.

Current wording

On December 8, 2014, the Board of Directors adopted a dividend policy to distribute to our stockholders a regular quarterly cash dividend of $0.10 per share. Every quarter since the adoption of the dividend policy, the Company has declared a quarterly dividend. On June 21, 2021 and 2022, the Board of Directors increased the quarterly dividend to $0.12 per share and $0.15 per share, respectively. On June 26, 2023, the Board of Directors approved an increase of 20% in the quarterly dividend, which increased the quarterly dividend to $0.18 per share. On December 5, 2023, the Board of Directors approved an increase of 83% in the quarterly dividend, which increased the quarterly dividend to $0.33 per share. On June 12, 2024, the Board of Directors approved an increase in the quarterly dividend to $0.37 per share. On March 10, 2025, the Board of Directors approved a further increase of 30% in the quarterly dividend, which increased the quarterly dividend to $0.48 per share. The Credit Agreement permits us to pay dividends to our stockholders and make share repurchases so long as there is no default under the Credit Agreement, our total funded debt to adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated net leverage ratio”) is no greater than 5.00 to 1.00, and we are in pro forma compliance with our financial covenants that require the Company to maintain a consolidated secured net leverage ratio of not greater than 3.75 to 1.00 (which may be temporarily increased to 4.25 following certain material acquisitions under certain circumstances) (the "Financial Covenant"). Furthermore, our Notes allow us to pay $25.0 million of dividends per fiscal year with no restrictions plus an unlimited amount of dividends so long as our consolidated total leverage ratio is not greater than 3.50 to 1.00, and there is no default under the indenture governing the Notes. The declaration and payment of future dividends under the quarterly dividend program will be at the discretion of the Board of Directors and will depend upon many factors, including our earnings, capital requirements, financial conditions, the terms of our indebtedness and other factors our Board of Directors may deem to be relevant. Our Board of Directors may, however, amend, revoke or suspend our dividend policy at any time and for any reason.

Previous wording

On June 21, 2022, our Board of Directors approved an increase to the share repurchase program of approximately $300.0 million, which at the time brought our available capacity to repurchase shares in the open market or privately negotiated transactions to $318.0 million. The Company repurchased approximately $74.0 million and $29.6 million of the Company’s stock during the nine months ended January 31, 2025 and 2024, respectively. As of January 31, 2025, $108.8 million remained available for common stock repurchases under our share repurchase program. Any decision to continue to execute our currently outstanding share repurchase program will depend on our earnings, capital requirements, financial condition and other factors considered relevant by our Board of Directors.

Current wording

On June 21, 2022, our Board of Directors approved an increase to the share repurchase program of approximately $300.0 million, which at the time brought our available capacity to repurchase shares in the open market or privately negotiated transactions to $318.0 million. The Company repurchased approximately $9.9 million and $23.5 million of the Company’s stock during the three months ended July 31, 2025 and 2024, respectively. As of July 31, 2025, $83.9 million remained available for common stock repurchases under our share repurchase program. Any decision to continue to execute our currently outstanding share repurchase program will depend on our earnings, capital requirements, financial condition and other factors considered relevant by our Board of Directors.

Previous wording

Our primary source of liquidity is the fee revenue generated from our operations, supplemented by our borrowing capacity under our Amended Credit Agreement. Our performance is subject to the general level of economic activity in the geographic regions and the industries we service. We believe, based on current economic conditions, that our cash on hand and funds from operations and the Amended Credit Agreement will be sufficient to meet anticipated working capital, capital expenditures, general corporate requirements, debt repayments, share repurchases and dividend payments under our dividend policy during the next 12 months and thereafter for the foreseeable future. However, if the national or global economy, credit market conditions and/or labor markets were to deteriorate in the future, including as a result of ongoing macroeconomic uncertainty due to inflation and a potential recession, such changes have and could put further negative pressure on demand for our services and affect our operating cash flows. If these conditions were to persist over an extended period of time, we may incur negative cash flows and it might require us to access additional borrowings under the Amended Credit Agreement to meet our capital needs and/or discontinue our share repurchases and dividend policy.

Current wording

Our primary source of liquidity is the fee revenue generated from our operations, supplemented by our borrowing capacity under our Credit Agreement. Our performance is subject to the general level of economic activity in the geographic regions and the industries we service. We believe, based on current economic conditions, that our cash on hand and funds from operations and the Credit Agreement will be sufficient to meet anticipated working capital, capital expenditures, general corporate requirements, debt repayments, share repurchases and dividend payments under our dividend policy during the next 12 months and thereafter for the foreseeable future. However, if the national or global economy, credit market conditions and/or labor markets were to deteriorate in the future, including as a result of ongoing macroeconomic uncertainty due to inflation and a potential recession, such changes have and could put further negative pressure on demand for our services and affect our operating cash flows. If these conditions were to persist over an extended period of time, we may incur negative cash flows and it might require us to access additional borrowings under the Credit Agreement to meet our capital needs and/or discontinue our share repurchases and dividend policy.

Previous wording

Cash and cash equivalents and marketable securities were $1,061.0 million and $1,195.4 million as of January 31, 2025 and April 30, 2024, respectively. Net of amounts held in trust for deferred compensation plans and accrued bonuses, cash and marketable securities were $544.2 million and $606.4 million at January 31, 2025 and April 30, 2024, respectively. As of January 31, 2025 and April 30, 2024, we held $368.0 million and $393.8 million, respectively, of cash and cash equivalents in foreign locations, net of amounts held in trust for deferred compensation plans and to pay accrued bonuses. Cash and cash equivalents consist of cash and highly liquid investments purchased with original maturities of three months or less. Marketable securities consist of mutual funds and investments in commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities. The primary objectives of our investment in mutual funds are to meet the obligations under certain of our deferred compensation plans, while the commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities are available for general corporate purposes.

Current wording

Cash and cash equivalents and marketable securities were $963.3 million and $1,277.0 million as of July 31, 2025 and April 30, 2025, respectively. Net of amounts held in trust for deferred compensation plans and accrued bonuses, cash and cash equivalents and marketable securities were $617.7 million and $667.3 million at July 31, 2025 and April 30, 2025, respectively. As of July 31, 2025 and April 30, 2025, we held $390.9 million and $405.2 million, respectively, of cash and cash equivalents in foreign locations, net of amounts held in trust for deferred compensation plans and to pay accrued bonuses. Cash and cash equivalents consist of cash and highly liquid investments purchased with original maturities of three months or less. Marketable securities consist of mutual funds and investments in commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities. The primary objectives of our investment in mutual funds are to meet the obligations under certain of our deferred compensation plans, while the commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities are available for general corporate purposes.

Previous wording

As of January 31, 2025 and April 30, 2024, marketable securities of $281.7 million and $254.4 million, respectively, included equity securities of $241.5 million (net of gross unrealized gains of $41.7 million and gross unrealized losses of $0.9 million) and $219.9 million (net of gross unrealized gains of $27.0 million and gross unrealized losses of $1.2 million), respectively, and were held in trust for settlement of our obligations under certain deferred compensation plans, of which $226.9 million and $202.5 million, respectively, are classified as non-current. These marketable securities were held to satisfy vested obligations totaling $220.3 million and $198.6 million as of January 31, 2025 and April 30, 2024, respectively. Unvested obligations under the deferred compensation plans totaled $19.9 million and $22.4 million as of January 31, 2025 and April 30, 2024, respectively.

Current wording

As of July 31, 2025 and April 30, 2025, marketable securities of $278.4 million and $270.0 million, respectively, included equity securities of $238.0 million (net of gross unrealized gains of $38.0 million and gross unrealized losses of $0.7 million) and $230.4 million (net of gross unrealized gains of $27.7 million and gross unrealized losses of $0.6 million), respectively, and were held in trust for settlement of our obligations under certain deferred compensation plans, of which $224.8 million and $218.0 million, respectively, were classified as non-current. These marketable securities were held to satisfy vested obligations totaling $223.8 million and $205.3 million as of July 31, 2025 and April 30, 2025, respectively. Unvested obligations under the deferred compensation plans totaled $14.2 million and $19.5 million as of July 31, 2025 and April 30, 2025, respectively.