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, 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 environmental, social and governance 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 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.

Previous wording

Korn Ferry (referred to herein as the “Company” or in the first-person notations “we,” “our” and “us”) is a leading global organizational consulting firm. We help clients synchronize strategy, operations and talent to drive superior business performance. We work with organizations to design their structures, roles and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop and motivate their people.

Current wording

Korn Ferry (referred to herein as the “Company” or in the first-person notations “we,” “our” and “us”) is a global organizational consulting firm, bringing together strategy and talent to drive superior performance for our clients. We work with clients to design their organizational structures, roles, and responsibilities. We help organizations hire the right people and advise them on how to reward, develop, and motivate their workforce. And we help professionals navigate and advance their careers.

Previous wording

Leveraging the strong connection between our various service offerings and our lines of business, we have an integrated go-to-market strategy. As we drive this strategy, a focal point for us is our Marquee and Regional account program which is comprised of more than 340 of our top clients. These accounts have Global Account Leaders assigned who help to orchestrate the delivery of core and integrated solutions that cut across multiple lines of business – effectively making all of the Firm’s resources available as our clients tackle their business and human capital issues. Despite near-term headwinds, such as economic uncertainty, we believe Korn Ferry is poised for continued growth. We are capitalizing on the current and growing relevance of our core and integrated solutions which, in combination with the strong connections amongst our service offerings and our acquisition activities, drives top-line synergies that have resulted in double digit fee revenue growth rates (CAGR) over the past twenty years.

Current wording

Leveraging the strong connection between our various service offerings and our lines of business, we have an integrated go-to-market strategy. As we drive this strategy, a focal point for us is our Marquee and Regional account program which is comprised of approximately 350 of our top clients. These accounts have Global Account Leaders assigned who help to orchestrate the delivery of core and integrated solutions that cut across multiple lines of business – effectively making all of the Firm’s resources available as our clients tackle their business and human capital issues. Despite near-term headwinds, such as economic uncertainty, we believe Korn Ferry is poised for continued growth. We are capitalizing on the current and growing relevance of our core and integrated solutions which, in combination with the strong connections amongst our service offerings and our acquisition activities, drives top-line synergies that have resulted in double digit fee revenue growth rates (CAGR) over the past twenty years.

Previous wording

•Fee revenue in Q2 FY'25 was $674.4 million, a year-over-year decrease of 4%.

Current wording

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

Previous wording

•Operating income was $87.5 million and Adjusted EBITDA was $117.0 million.

Current wording

•Net income attributable to Korn Ferry was $58.4 million and Adjusted EBITDA was $114.5 million.

Previous wording

•Net income attributable to Korn Ferry was $60.8 million, while diluted earnings per share was $1.14 in Q2 FY'25.

Current wording

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

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 October 31, 2024, Adjusted EBITDA excluded $0.6 million of restructuring charges, net, and $3.9 million of integration/acquisition costs. For the six months ended October 31, 2024, Adjusted EBITDA excluded $0.6 million of restructuring charges, net, and $5.0 million of integration/acquisition costs. For the three months ended October 31, 2023, Adjusted EBITDA excluded $63.5 million of restructuring charges, net, $5.0 million of integration/acquisition costs, and $1.5 million impairment of fixed assets. For the six months ended October 31, 2023, Adjusted EBITDA excluded $63.9 million of restructuring charges, net, $9.2 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 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.

Previous wording

Consolidated and the subtotals of Executive Search Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and have limitations as analytical tools. They should not be viewed as a substitute for financial information determined in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. In addition, they may not necessarily be comparable to non-GAAP performance measures that may be presented by other companies.

Current wording

Consolidated and subtotals of Executive Search Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and have limitations as analytical tools. They should not be viewed as a substitute for financial information determined in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. In addition, they may not necessarily be comparable to non-GAAP performance measures that may be presented by other companies.

Previous wording

Executive Search North America. Executive Search North America reported fee revenue of $129.9 million, a decrease of $2.6 million, or 2%, in the three months ended October 31, 2024 compared to $132.5 million in the year-ago quarter driven by a 7% decrease in the weighted-average fee billed per engagement (calculated using local currency), partially offset by a 5% increase in the number of engagements billed during the three months ended October 31, 2024 compared to the year-ago quarter.

Current wording

Executive Search North America. Executive Search North America reported fee revenue of $128.3 million, an increase of $6.9 million, or 6%, in the three months ended January 31, 2025 compared to $121.4 million in the year-ago quarter driven by a 7% increase in the number of engagements billed, partially offset by a 1% decrease 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.

Previous wording

Executive Search EMEA. Executive Search EMEA reported fee revenue of $46.8 million, an increase of $3.7 million, or 9%, in the three months ended October 31, 2024 compared to $43.1 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $1.7 million, or 4%, in the three months ended October 31, 2024 compared to the year-ago quarter. The increase in fee revenue was due to a 6% increase in the weighted-average fee billed per engagement (calculated using local currency), partially offset by a 2% decrease in the number of engagements billed during the three months ended October 31, 2024 compared to the year-ago quarter.

Current 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.

Previous wording

Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $21.5 million, an increase of $2.2 million, or 11%, in the three months ended October 31, 2024 compared to $19.3 million in the year-ago quarter. The increase in fee revenue was due to an 8% increase in the weighted-average fee billed per engagement (calculated using local currency) and a 1% increase in the number of engagements billed during the three months ended October 31, 2024 compared to the year-ago quarter.

Current wording

Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $21.7 million in the three months ended January 31, 2025, essentially flat compared to $21.3 million in the year-ago quarter.

Previous wording

Executive Search Latin America. Executive Search Latin America reported fee revenue of $15.2 million, an increase of $0.7 million, or 5%, in the six months ended October 31, 2024 compared to $14.5 million in the year-ago period. Exchange rates unfavorably impacted fee revenue by $1.5 million, or 10%, in the six months ended October 31, 2024 compared to the year-ago period.

Current wording

Executive Search Latin America. Executive Search Latin America reported fee revenue of $6.8 million, a decrease of $0.7 million, or 9%, in the three months ended January 31, 2025, compared to $7.5 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $1.1 million, or 15%, in the three months ended January 31, 2025 compared to the year-ago quarter.

Previous wording

Professional Search & Interim. Professional Search & Interim reported fee revenue of $121.1 million, a decrease of $17.3 million, or 13%, in the three months ended October 31, 2024 compared to $138.4 million in the year-ago quarter. The decrease in fee revenue was primarily due to lower demand in the current economic environment.

Current wording

Professional Search & Interim. Professional Search & Interim reported fee revenue of $130.0 million in the three months ended January 31, 2025 essentially flat compared to $130.9 million in the year-ago quarter. The change in fee revenue was impacted by the Industry-wide slowdown in demand for permanent and Interim professionals offset by additional fee revenue from the acquisition of Trilogy, effective November 1, 2024.

Previous wording

RPO. RPO reported fee revenue of $87.6 million in the three months ended October 31, 2024, essentially flat compared to $87.7 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $1.5 million, or 2%, in the three months ended October 31, 2024 compared to the year-ago quarter.

Current wording

RPO. RPO reported fee revenue of $84.7 million in the three months ended January 31, 2025, an increase of $3.5 million, or 4%, in the three months ended January 31, 2025 compared to $81.2 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $1.5 million, or 2%, in the three months ended January 31, 2025 compared to the year-ago quarter. The increase in fee revenue was primarily due to recent new client wins being stood up and an increase in demand from our base clients in the North America and Asia Pacific regions.

Previous wording

General and administrative expenses decreased by $1.2 million, or 2%, to $64.5 million in the three months ended October 31, 2024 from $65.7 million in the year-ago quarter. The decrease in general and administrative expenses was primarily due to decreases in bad debt expense and impairment of fixed assets of $2.5 million and $1.5 million, respectively, in the three months ended October 31, 2024 compared to the year-ago quarter, partially offset by an increase in integration and acquisition cost of $2.2 million and marketing and business development expenses of $1.1 million.

Current wording

Executive Search EMEA compensation and benefits expense decreased by $1.2 million, or 3%, to $35.5 million in the three months ended January 31, 2025 compared to $36.7 million in the year-ago quarter. The decrease in compensation and benefits expense was primarily due to a decrease of $2.0 million in performance-related bonus expense as a result of lower segment fee revenue in the three months ended January 31, 2025 compared to the year-ago quarter, partially offset by an increase in salaries and related payroll taxes of $0.7 million.

Previous wording

Professional Search & Interim compensation and benefits expense decreased by $7.3 million, or 13%, to $49.8 million in the three months ended October 31, 2024 from $57.1 million in the year-ago quarter. The decrease in compensation and benefits expense was primarily due to a decrease in salaries and related payroll taxes of $4.7 million as a result of an 18% decrease in average headcount in the three months ended October 31, 2024 compared to the year-ago quarter. Also contributing to the decrease in compensation and benefits expense were decreases in commission expense and integration and acquisition cost of $3.9 million and $3.3 million, respectively, partially offset by an increase in performance-related bonus expense of $5.0 million in the three months ended October 31, 2024 compared to the year-ago quarter.

Current wording

Professional Search & Interim compensation and benefits expense decreased by $8.7 million, or 16%, to $45.8 million in the three months ended January 31, 2025 from $54.5 million in the year-ago quarter. The decrease in compensation and benefits expense was primarily due to a decrease in integration and acquisition cost of $2.1 million as well as a decline in performance-related bonus expense of $1.9 million and a decrease in deferred compensation expense of $1.2 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. Also contributing to the decrease in compensation and benefits expense were decreases in commission expense of $1.6 million and salaries and related payroll taxes of $1.5 million as a result of an 8% decrease in average headcount in the three months ended January 31, 2025 compared to the year-ago quarter.

Previous wording

Executive Search EMEA general and administrative expenses increased by $0.3 million, or 8%, to $4.2 million in the three months ended October 31, 2024 compared to $3.9 million in the year-ago quarter.

Current 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.

Previous wording

Executive Search Asia Pacific general and administrative expenses decreased by $0.5 million, or 26%, to $1.4 million in the three months ended October 31, 2024, compared to $1.9 million in the year-ago quarter.

Current 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.

Previous wording

RPO general and administrative expenses increased by $1.0 million, or 29%, to $4.5 million in the three months ended October 31, 2024 compared to $3.5 million in the year-ago quarter. The increase in general and administrative expenses was primarily due to a decrease in foreign exchange gain of $1.0 million in the three months ended October 31, 2024 compared to the year-ago quarter.

Current wording

RPO general and administrative expenses was $4.4 million in the three months ended January 31, 2025, essentially flat compared to $4.5 million in the year-ago quarter.

Previous wording

Corporate general and administrative expenses increased by $1.7 million, or 11%, to $17.4 million in the three months ended October 31, 2024 compared to $15.7 million in the year-ago quarter. The increase in general and administrative expenses was primarily due to an increase in integration/acquisition costs of $2.4 million, partially offset by the impact of foreign currency, with a foreign currency gain of $0.2 million in the three months ended October 31, 2024 compared to a foreign currency loss of $0.6 million in the year-ago quarter.

Current 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.

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 decreased by $13.8 million, or 18%, to $64.7 million in the three months ended October 31, 2024 compared to $78.5 million in the year-ago quarter. Professional Search & Interim accounts for $11.8 million of the decrease due to a decline in fee revenue in the segment as the Company's 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 $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.

Previous wording

During the second quarter of fiscal 2024, we implemented a plan intended to eliminate excess capacity resulting from the challenging and uncertain macroeconomic business environment. As a result the Company recorded restructuring charges, net of $63.5 million and made adjustments to the previously recorded restructuring accruals of $0.4 million for total restructuring charges of $63.9 million during the six months ended October 31, 2023. During the six months ended October 31, 2024, we recorded an adjustment to the previously recorded restructuring accruals of $0.6 million.

Current wording

During the second quarter of fiscal 2024, we implemented a restructuring plan to eliminate excess capacity resulting from a challenging macroeconomic business environment impacting demand. During the three months ended January 31, 2025 and 2024, we recorded an adjustment to the previously recorded restructuring accruals of $1.3 million and $4.6 million, respectively.

Previous wording

Consulting Adjusted EBITDA was $29.1 million in the three months ended October 31, 2024, essentially flat compared to $28.9 million in the year-ago quarter. Consulting Adjusted EBITDA, as a percentage of fee revenue, was 17% and 16% in the three months ended October 31, 2024 and 2023, respectively.

Current 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.

Previous wording

Digital Adjusted EBITDA was $29.2 million in the three months ended October 31, 2024, essentially flat compared to $29.0 million in the year-ago quarter. Digital Adjusted EBITDA, as a percentage of fee revenue, was 31% and 30% in the three months ended October 31, 2024 and 2023, respectively.

Current 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.

Previous wording

Executive Search North America Adjusted EBITDA increased by $7.5 million, or 26%, to $36.9 million in the three months ended October 31, 2024 compared to $29.4 million in the year-ago quarter. The increase was mainly driven by decreases in performance-related bonus expense and salaries and related payroll taxes, partially offset by a decrease in fee revenue in the three months ended October 31, 2024 compared to year-ago quarter. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 28% and 22% in the three months ended October 31, 2024 and 2023, respectively.

Current 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.

Previous wording

Executive Search EMEA Adjusted EBITDA increased by $1.9 million, or 34%, to $7.5 million in the three months ended October 31, 2024 compared to $5.6 million in the year-ago quarter. The increase was primarily driven by an increase in fee revenue, partially offset by higher compensation and benefits expense. Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, was 16% and 13% in the three months ended October 31, 2024 and 2023, respectively.

Current 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.

Previous wording

Executive Search Asia Pacific Adjusted EBITDA increased by $0.5 million, or 13%, to $4.4 million in the three months ended October 31, 2024 compared to $3.9 million in the year-ago quarter. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 21% and 20% in the three months ended October 31, 2024 and 2023, respectively.

Current 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.

Previous wording

RPO Adjusted EBITDA was $12.9 million in the three months ended October 31, 2024, an increase of $4.0 million, or 45%, as compared to $8.9 million in the year-ago quarter. The increase in Adjusted EBITDA was mainly driven by a decrease in compensation and benefits expense. RPO Adjusted EBITDA, as a percentage of fee revenue, was 15% and 10% in the three months ended October 31, 2024 and 2023, respectively.

Current wording

RPO Adjusted EBITDA was $12.7 million in the three months ended January 31, 2025, an increase of $3.4 million, or 37%, as compared to $9.3 million in the year-ago quarter. The increase in Adjusted EBITDA was mainly driven bygreater execution staff productivity and disciplined cost management, as shown by an increase in fee revenue while costs remained essentially flat compared to the year-ago quarter. RPO Adjusted EBITDA, as a percentage of fee revenue, was 15% and 11% in the three months ended January 31, 2025 and 2024, respectively.

Previous wording

Other income, net was $5.4 million in the three months ended October 31, 2024 compared to other loss, net of $13.8 million in the year-ago quarter. The difference was primarily due to 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 October 31, 2024 compared to losses in the year-ago quarter.

Current 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.

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 $5.6 million in the three months ended October 31, 2024 compared to $6.6 million in the year-ago quarter. Interest expense, net decreased due to an increase in interest income earned on cash and cash equivalent balances as a result of higher average cash and cash equivalents balances in the three months ended October 31, 2024 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 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.

Previous wording

The provision for income tax was $24.9 million in the three months ended October 31, 2024, with an effective tax rate of 28.5%, compared to $2.3 million in the three months ended October 31, 2023, with an effective rate of 98.2%. 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 effective tax rate for the three months ended October 31, 2023 was elevated due to lower earnings resulting from restructuring charges recorded in the quarter.

Current 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.

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 operations. Net income attributable to noncontrolling interest for the three months ended October 31, 2024 was $1.5 million, as compared to $1.8 million in the three months ended October 31, 2023.

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 January 31, 2025 was $0.9 million, compared to $0.6 million in the three months ended January 31, 2024.

Previous wording

Fee Revenue. Fee revenue was $674.4 million in the three months ended October 31, 2024, a decrease of $29.6 million, or 4% compared to $704.0 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $6.2 million, or 1%, in the three months ended October 31, 2024 compared to the year-ago quarter. The decrease in fee revenue was primarily due to lower fee revenues in Professional Search & Interim, Consulting and Digital driven by a decline in demand due to the current economic environment, partially offset by increases in fee revenue in Executive Search EMEA and Executive Search Asia Pacific.

Current wording

Fee Revenue. Fee revenue was $2,018.0 million, a decrease of $53.9 million, or 3%, in the nine months ended January 31, 2025 compared to $2,071.9 million in the year-ago period. Exchange rates unfavorably impacted fee revenue by $11.4 million, or 1%, in the nine months ended January 31, 2025 compared to the year-ago period. The decrease in fee revenue was primarily due to lower fee revenues in Professional Search & Interim, Consulting, RPO and Digital driven by a decline in demand due to the current economic environment and other factors, partially offset by an increase in fee revenue in Executive Search North America and Executive Search EMEA.

Previous wording

Consulting. Consulting reported fee revenue of $166.8 million, a decrease of $11.0 million, or 6%, in the three months ended October 31, 2024 compared to $177.8 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $2.1 million, or 1%, in the three months ended October 31, 2024 compared to the year-ago quarter. The decrease in Consulting fee revenue was primarily driven by a decline in demand for our organizational strategy and leadership and professional development offerings.

Current wording

Consulting. Consulting reported fee revenue of $493.3 million, a decrease of $19.5 million, or 4%, in the nine months ended January 31, 2025 compared to $512.8 million in the year-ago period. Exchange rates unfavorably impacted fee revenue by $3.3 million, or 1%, in the nine months ended January 31, 2025 compared to the year-ago period. The decrease in fee revenue was primarily driven by a decline in demand for our organizational strategy, assessment & succession, and leadership and professional development offerings.

Previous wording

Digital. Digital reported fee revenue of $181.1 million, a decrease of $4.0 million, or 2%, in the six months ended October 31, 2024 compared to $185.1 million in the year-ago period. Exchange rates unfavorably impacted fee revenue by $1.1 million, or 1%, in the six months ended October 31, 2024 compared to the year-ago period. The decrease in fee revenue was primarily driven by decreases in demand for leadership and development and assessment & succession offerings.

Current wording

Digital. Digital reported fee revenue of $271.9 million, a decrease of $3.5 million, or 1%, in the nine months ended January 31, 2025 compared to $275.4 million in the year-ago period. Exchange rates unfavorably impacted fee revenue by $3.2 million, or 1%, in the nine months ended January 31, 2025 compared to the year-ago period. The decrease in fee revenue was primarily driven by decreases in demand for leadership and development and assessment & succession offerings, partially offset by increases in organizational strategy and total rewards offerings.

Previous wording

Executive Search North America. Executive Search North America reported fee revenue of $264.6 million, an increase of $4.6 million, or 2%, in the six months ended October 31, 2024 compared to $260.0 million in the year-ago period. North America’s fee revenue increased due to a 4% increase in the number of engagements billed, partially offset by a 2% decrease in the weighted-average fee billed per engagement (calculated using local currency) during the six months ended October 31, 2024 compared to the year-ago period.

Current wording

Executive Search North America. Executive Search North America reported fee revenue of $392.9 million, an increase of $11.4 million, or 3%, in the nine months ended January 31, 2025 compared to $381.5 million in the year-ago period. North America’s fee revenue increased due to a 4% increase in the number of engagements billed, partially offset by a 1% decrease 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.

Previous wording

Executive Search EMEA. Executive Search EMEA reported fee revenue of $92.8 million, an increase of $2.9 million, or 3%, in the six months ended October 31, 2024 compared to $89.9 million in the year-ago period. Exchange rates favorably impacted fee revenue by $1.3 million, or 1%, in the six months ended October 31, 2024 compared to the year-ago period. The increase in fee revenue was due to a 10% increase in the weighted-average fee billed per engagement (calculated using local currency), partially offset by an 8% decrease in the number of engagements billed during the six months ended October 31, 2024 compared to the year-ago period.

Current wording

Executive Search EMEA. Executive Search EMEA reported fee revenue of $140.6 million, an increase of $1.7 million, or 1%, in the nine months ended January 31, 2025 compared to $138.9 million in the year-ago period. The increase in fee revenue was due to a 7% increase in the weighted-average fee billed per engagement (calculated using local currency), partially offset by a 6% decrease in the number of engagements billed during the nine months ended January 31, 2025 compared to the year-ago period.

Previous wording

Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $42.0 million, a decrease of $1.8 million, or 4%, in the six months ended October 31, 2024 compared to $43.8 million in the year-ago period. The decrease in fee revenue was due to a 4% decrease in the number of engagements billed, partially offset by a 1% increase in the weighted-average fee billed per engagement (calculated using local currency) during the six months ended October 31, 2024 compared to the year-ago period.

Current 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.

Previous wording

Executive Search Latin America. Executive Search Latin America reported fee revenue of $7.9 million in the three months ended October 31, 2024, essentially flat compared to $8.1 million in the year-ago quarter.

Current wording

Executive Search Latin America. Executive Search Latin America reported fee revenue of $22.0 million in both the nine months ended January 31, 2025 and 2024. Exchange rates unfavorably impacted fee revenue by $2.6 million, or 12%, in the nine months ended January 31, 2025 compared to the year-ago period.

Previous wording

Professional Search & Interim. Professional Search & Interim reported fee revenue of $242.8 million, a decrease of $37.8 million, or 13%, in the six months ended October 31, 2024 compared to $280.6 million in the year-ago period. The decrease in fee revenue was primarily due to a decrease in interim fee revenue of $28.0 million as well as a decrease in permanent placement fee revenue of $9.8 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 $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.