KORN FERRY

Previous wording

This Annual Report on Form 10-K 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 recent workforce, real estate, and other restructuring initiatives, restrictions imposed by off-limits agreements, reliance on information processing systems, cybersecurity 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 regulatio…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Annual Report on Form 10-K 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 on…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

▪Approximately 80% of the executive searches we performed in fiscal 2024 were for board level, chief executive and other senior executive and general management positions. Our more than 3,700 search engagement clients in fiscal 2024 included many of the world’s largest and most prestigious public and private companies.

Current wording

▪More than 80% of the executive searches we performed in fiscal 2025 were for board level, chief executive and other senior executive and general management positions. Our more than 3,700 search engagement clients in fiscal 2025 included many of the world’s largest and most prestigious public and private companies.

Previous wording

▪We have built strong client loyalty, with more than 85% of the assignments performed during fiscal 2024 having been on behalf of clients for whom we had conducted assignments in the previous three fiscal years.

Current wording

▪We have built strong client loyalty, with more than 83% of the assignments performed during fiscal 2025 having been on behalf of clients for whom we had conducted assignments in the previous three fiscal years.

Previous wording

▪More than 75% of our revenues were generated from clients that have utilized multiple lines of our business.

Current wording

▪More than 75% of our fee revenues were generated from clients that have utilized multiple solutions.

Previous wording

▪Our fiscal 2024 Marquee and Regional Account fee revenue generated slightly more than 37% of our consolidated fee revenue and grew 3% compared to fiscal year 2023.

Current wording

▪Our fiscal 2025 Marquee and Diamond Accounts fee revenue generated approximately 39% of our consolidated fee revenue and grew 3% compared to fiscal year 2024.

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 fiscal 2024, Adjusted EBITDA excluded $68.6 million of restructuring charges, net, $14.9 million of integration/acquisition costs, $1.6 million impairment of right-of-use assets and $1.6 million impairment of fixed assets. For fiscal 2023, Adjusted EBITDA excluded $42.6 million of restructuring charges, net, $14.9 million of integration/acquisition costs, $5.5 million impairment of right-of-use assets and $4.4 million impairment of fixed assets. For fiscal 2022, Adjusted EBITDA excluded $7.9 million of integration/acquisition costs, $7.4 million impairment of right-of-use assets and $1.9 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 fiscal 2025, Adjusted EBITDA excluded $8.8 million of integration/acquisition costs, $4.6 million of management separation charges due to contractual obligations upon an executive's death, $2.5 million of impairment of right-of-use assets, $1.9 million of restructuring charges, net, and $0.5 million of impairment of fixed assets. For fiscal 2024, Adjusted EBITDA excluded $68.6 million of restructuring charges, net, $14.9 million of integration/acquisition costs, $1.6 million impairment of right-of-use assets and $1.6 million impairment of fixed assets. For fiscal 2023, Adjusted EBITDA excluded $42.6 million of restructuring charges, net, $14.9 million of integration/acquisition costs, $5.5 million impairment of right-of-use assets and $4.4 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

As of January 31, 2024, we completed our annual qualitative test which did not indicate any impairment. During the fourth quarter, we voluntarily changed the date of the annual impairment test from January 31 to February 1. This voluntary change is preferable under the circumstances as it results in better alignment with our annual operating plan process. This voluntary change in accounting principle related to the annual impairment testing date was applied prospectively and did not delay, accelerate or avoid an impairment charge. The quantitative test performed on February 1, 2024 did not indicate any impairment and as a result, no impairment charge was recognized. While historical performance and current expectations have resulted in fair values of goodwill in excess of carrying values, if our assumptions are not realized, it is possible that in the future an impairment charge may need to be recorded. However, it is not possible at this time to determine if an impairment charge would result or if such a charge would be material. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment test will prove to be accurate predictions of the future. There was no indication of potential impairment through April 30, 2024 that would have required further testing.

Current wording

As of February 1, 2025, we completed our annual qualitative test which did not indicate any impairment. While historical performance and current expectations have resulted in fair values of goodwill in excess of carrying values, if our assumptions are not realized, it is possible that in the future an impairment charge may need to be recorded. However, it is not possible at this time to determine if an impairment charge would result or if such a charge would be material. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment test will prove to be accurate predictions of the future. There was no indication of potential impairment through April 30, 2025 that would have required further testing.

Previous wording

Fair value of goodwill for purposes of the goodwill impairment test when performing the quantitative test is determined utilizing (1) a discounted cash flow analysis based on forecasted cash flows (including estimated underlying revenue and operating income growth rates) discounted using an estimated weighted-average cost of capital for market participants and (2) a market approach, utilizing observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). We also reconcile the results of these analyses to its market capitalization. If the carrying amount of a reporting unit exceeds its estimated fair value, goodwill is considered potentially impaired and further tests are performed to measure the amount of impairment loss, if any.

Current wording

When a quantitative test is required the fair value of goodwill for purposes of the goodwill impairment test is determined utilizing (1) a discounted cash flow analysis based on forecasted cash flows (including estimated underlying revenue and operating income growth rates) discounted using an estimated weighted-average cost of capital for market participants and (2) a market approach, utilizing observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). We also reconcile the results of these analyses to its market capitalization. If the carrying amount of a reporting unit exceeds its estimated fair value, goodwill is considered impaired and further tests are performed to measure the amount of impairment loss, if any.

Previous wording

▪A prolonged downturn in the business environment in which the reporting units operate including a longer than anticipated public health crisis;

Current wording

▪A prolonged downturn in the business environment in which the reporting units operate;

Previous wording

▪Technological advances such as artificial intelligence that impact labor markets and can diminish the value of our IP.

Current wording

▪Technological advances such as AI that impact labor markets and can diminish the value of our IP.

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 Solutions areas and are financial metrics used by the Company’s investor base.

Previous wording

Consulting. Consulting reported fee revenue of $695.0 million in fiscal 2024, an increase of $18.0 million, or 3%, compared to $677.0 million in fiscal 2023. The increase in fee revenue was mainly driven by increases in demand for our organizational strategy offering and assessment & succession solutions. Exchange rates favorably impacted fee revenue by $2.1 million, compared to fiscal 2023.

Current wording

Consulting. Consulting reported fee revenue of $662.7 million in fiscal 2025, a decrease of $32.3 million, or 5%, compared to $695.0 million in fiscal 2024. Exchange rates unfavorably impacted fee revenue by $4.0 million, or 1% in fiscal 2025 compared to fiscal 2024. 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

Executive Search EMEA. Executive Search EMEA reported fee revenue of $184.5 million in fiscal 2024, a decrease of $2.5 million, or 1%, compared to $187.0 million in fiscal 2023. Exchange rates favorably impacted fee revenue by $7.0 million, or 4%, in fiscal 2024 compared to fiscal 2023. The decrease in fee revenue was primarily due to a 7% decrease in the number of engagements billed, partially offset by a 2% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2024 compared to fiscal 2023.

Current wording

Executive Search EMEA. Executive Search EMEA reported fee revenue of $194.1 million in fiscal 2025, an increase of $9.6 million, or 5%, compared to $184.5 million in fiscal 2024. The increase in fee revenue was due to a 5% increase in the weighted-average fee billed per engagement (calculated using local currency) in fiscal 2025 compared to fiscal 2024.

Previous wording

Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $85.9 million in fiscal 2024, a decrease of $9.7 million, or 10%, compared to $95.6 million in fiscal 2023. Exchange rates unfavorably impacted fee revenue by $2.2 million, or 2%, in fiscal 2024 compared to fiscal 2023. The decrease in fee revenue was due to a 15% decrease in the number of engagements billed, partially offset by an 8% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2024 compared to fiscal 2023.

Current wording

Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $87.3 million in fiscal 2025, an increase of $1.4 million, or 2%, compared to $85.9 million in fiscal 2024. The slight increase in fee revenue was due to a 1% increase in the number of engagements billed coupled with a 1% increase in the weighted-average fee billed per engagement (calculated using local currency) in fiscal 2025 compared to fiscal 2024.

Previous wording

Professional Search & Interim. Professional Search & Interim reported fee revenue of $540.6 million in fiscal 2024, an increase of $37.2 million, or 7%, compared to $503.4 million in fiscal 2023. Exchange rates favorably impacted fee revenue by $1.5 million in fiscal 2024 compared to fiscal 2023. The increase in fee revenue was due to an increase in interim fee revenue of $94.8 million, mainly driven by the Acquired Companies. This increase was partially offset by a decrease in permanent placement fee revenue of $57.6 million.

Current wording

Professional Search & Interim. Professional Search & Interim reported fee revenue of $503.5 million in fiscal 2025, a decrease of $37.1 million, or 7%, compared to $540.6 million in fiscal 2024. The decrease in fee revenue was primarily due to a decrease in permanent placement fee revenue of $19.7 million as well as a decrease in interim fee revenue of $17.4 million, each of which resulted from lower demand in the current economic environment.

Previous wording

RPO. RPO reported fee revenue of $354.1 million in fiscal 2024, a decrease of $70.5 million, or 17%, compared to $424.6 million in fiscal 2023. Exchange rates favorably impacted fee revenue by $3.4 million, or 1%, in fiscal 2024 compared to fiscal 2023. The decrease in fee revenue was primarily due to a decline in the number of placements being requested by existing clients as a result of clients being affected by the challenging economic environment as well as clients "labor hoarding" during fiscal 2024.

Current wording

RPO. RPO reported fee revenue of $354.1 million in both fiscal 2025 and 2024.

Previous wording

Executive Search North America compensation and benefits expense decreased by $14.9 million, or 4%, to $371.2 million in fiscal 2024 compared to $386.1 million in fiscal 2023. Exchange rates favorably impacted compensation and benefits by $0.3 million in fiscal 2024 compared to fiscal 2023. The decrease in compensation and benefits expense was primarily due to decreases in performance-related bonus expense of $28.1 million due to lower segment fee revenue and salaries and related payroll taxes of $5.8 million driven by a 4% decrease in average headcount. The decrease in compensation and benefits expense was partially offset by a higher deferred compensation expense of $21.0 million as a result of increases in the fair value of participants' accounts in fiscal 2024 compared to 2023.

Current wording

Executive Search North America compensation and benefits expense decreased by $8.9 million, or 2%, to $362.3 million in fiscal 2025 compared to $371.2 million in fiscal 2024. Compensation and benefits expense decreased primarily due to a decrease of $8.3 million in deferred compensation expense due to a decrease in the fair value of participants' accounts in fiscal 2025 compared to fiscal 2024.

Previous wording

Professional Search & Interim general and administrative expenses decreased by $6.0 million, or 20%, to $24.3 million in fiscal 2024 from $30.3 million in fiscal 2023. The decrease in general and administrative expenses was primarily due to decreases in bad debt expense of $2.6 million and integration/acquisition costs of $2.1 million in fiscal 2024 compared to fiscal 2023 and impairment of fixed and right-of-use assets of $0.6 million incurred in fiscal 2023.

Current wording

Consulting general and administrative expenses decreased by $3.2 million, or 6%, to $51.5 million in fiscal 2025 compared to $54.7 million in fiscal 2024. The decrease in general and administrative expenses was primarily due to decreases in legal and other professional fees and foreign exchange loss of $1.2 million and $0.8 million, respectively, in fiscal 2025 compared to fiscal 2024. Further contributing to the decrease in general and administrative expenses was an impairment of right-of-use assets of $0.6 million incurred in fiscal 2024.

Previous wording

Digital general and administrative expenses decreased by $0.7 million, or 2%, to $39.9 million in fiscal 2024 compared to $40.6 million in fiscal 2023.

Current wording

Digital general and administrative expenses were $39.1 million in fiscal 2025, essentially flat compared to $39.9 million in fiscal 2024.

Previous wording

Executive Search Latin America general and administrative expenses increased by $3.4 million, or 243%, to $4.8 million in fiscal 2024 from $1.4 million in fiscal 2023. The increase in general and administrative expenses was primarily due to a foreign exchange loss of $0.8 million in fiscal 2024 compared to a foreign exchange gain of $1.4 million in fiscal 2023.

Current wording

Executive Search Latin America general and administrative expenses decreased by $2.3 million, or 48%, to $2.5 million in fiscal 2025 from $4.8 million in fiscal 2024. The decrease in general and administrative expenses was primarily due to the impact of a foreign exchange gain of $1.1 million in fiscal 2025 compared to a foreign exchange loss of $0.8 million in fiscal 2024.

Previous wording

Corporate general and administrative expenses decreased by $1.3 million, or 2%, to $58.8 million in fiscal 2024 compared to $60.1 million in fiscal 2023. The decrease was primarily due to lower legal and other professional fees of $5.3 million and a decrease in integration/acquisition costs of $3.6 million, partially offset by increases in marketing and business development expenses of $4.0 million and computer license expense of $1.7 million and a decrease in foreign exchange gain of $1.8 million in fiscal 2024 compared to fiscal 2023.

Current wording

Corporate general and administrative expenses increased by $4.5 million, or 8%, to $63.3 million in fiscal 2025 compared to $58.8 million in fiscal 2024. The increase was primarily due to increases in integration/acquisition costs of $2.4 million and $1.8 million in marketing and business development expenses in fiscal 2025 compared to fiscal 2024.

Previous wording

Cost of services expense consists of contractor and product costs related to the delivery of various services and products through Consulting, Digital, Professional Search & Interim and RPO. Cost of services expense was $300.0 million in fiscal 2024, an increase of $61.5 million, or 26%, compared to $238.5 million in fiscal 2023. Professional Search & Interim accounts for $54.8 million of the increase primarily due to the Acquired Companies, which perform a significant amount of interim services. Interim services have a higher cost of service expense as compared to the Company's other segments. The rest of the increase was from the Consulting and Digital segments due to an increase in fee revenue in the segments. Cost of services expense, as a percentage of fee revenue, was 11% and 8% in fiscal 2024 and fiscal 2023, respectively.

Current wording

Cost of services expense consists of contractor and product costs related to the delivery of various services and products through Consulting, Digital, Professional Search & Interim and RPO. Cost of services expense was $285.1 million in fiscal 2025, a decrease of $14.9 million, or 5%, compared to $300.0 million in fiscal 2024. Professional Search & Interim accounts for $15.0 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. Cost of services expense, as a percentage of fee revenue, decreased to 10% in fiscal 2025 from 11% in fiscal 2024.

Previous wording

Depreciation and amortization expenses were $78.0 million in fiscal 2024, an increase of $9.7 million, or 14%, compared to $68.3 million in fiscal 2023. The increase was primarily due to technology investments made in the current and prior year, and an increase in amortization of intangible assets due to the Acquired Companies.

Current wording

Depreciation and amortization expenses were $80.3 million in fiscal 2025, an increase of $2.3 million, or 3%, compared to $78.0 million in fiscal 2024. The increase was primarily due to the technology investments made in the current and prior year in our Digital segment.

Previous wording

During the second quarter of fiscal 2024, we implemented the Plan to eliminate excess capacity resulting from a challenging and uncertain macroeconomic business environment. As a result, in fiscal 2024, the Company recorded restructuring charges, net of $68.6 million. In fiscal 2023, the Company implemented a separate restructuring plan to eliminate excess capacity resulting from the challenging macroeconomic business environment impacting demand and to realign our workforce with our business needs and objectives and as a result recorded restructuring charges, net of $42.6 million.

Current 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 $68.6 million in fiscal 2024. During fiscal 2025, we recorded an adjustment to the previously recorded restructuring accruals of $1.9 million.

Previous wording

Net income attributable to Korn Ferry was $169.2 million in fiscal 2024, a decrease of $40.3 million, or 19%, compared to $209.5 million in fiscal 2023. The decrease in net income attributable to Korn Ferry was primarily due to a decrease in fee revenue combined with an increase in cost of services as a result of the Acquired Companies. Further contributing to the decrease in net income attributable to Korn Ferry was an increase in the restructuring charges, net recorded during fiscal 2024 in order to align our workforce to the challenging macroeconomic business environment. The decrease in net income was partially offset by decreases in compensation and benefits expenses, income tax provision and general and administrative expenses and an increase in other income, net due to greater gains from the increase in the fair value of our marketable securities that are held in trust for the settlement of the Company's obligation under the ECAP in fiscal 2024 compared to fiscal 2023. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 6% in fiscal 2024 compared to 7% in fiscal 2023.

Current wording

Net income attributable to Korn Ferry was $246.1 million in fiscal 2025, an increase of $76.9 million, or 45%, compared to $169.2 million in fiscal 2024. 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 fiscal 2025 compared to fiscal 2024, partially offset by an increase in income tax provision, lower fee revenue and a decrease in other income, net. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 9% and 6% in fiscal 2025 and 2024, respectively.

Previous wording

Digital Adjusted EBITDA was $108.7 million in fiscal 2024, an increase of $11.2 million, or 11%, compared to $97.5 million in fiscal 2023. The increase in Adjusted EBITDA was mainly driven by an increase in fee revenue combined with a decrease in compensation and benefits expense, partially offset by an increase in cost of services expense in fiscal 2024 compared to fiscal 2023. Digital Adjusted EBITDA, as a percentage of fee revenue, was 30% in fiscal 2024 compared to 27% in fiscal 2023.

Current wording

Digital Adjusted EBITDA was $112.7 million in fiscal 2025, an increase of $4.0 million, or 4%, compared to $108.7 million in fiscal 2024. This increase in Adjusted EBITDA was mainly driven by a decrease in compensation and benefits expense, partially offset by a decrease in fee revenue in fiscal 2025 compared to fiscal 2024. Digital Adjusted EBITDA, as a percentage of fee revenue, was 31% in fiscal 2025 compared to 30% in fiscal 2024.

Previous wording

Executive Search North America Adjusted EBITDA decreased by $20.2 million, or 14%, to $120.7 million in fiscal 2024 compared to $140.9 million in fiscal 2023. The decrease in Adjusted EBITDA was primarily driven by a decrease in the segment fee revenue, partially offset by a decrease in compensation and benefits expense and an increase in other income driven by the increases in the value of our marketable securities (that are held in trust to satisfy obligations under our deferred compensation plan) due to market movements in fiscal 2024 compared to fiscal 2023. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 24% in fiscal 2024 compared to 25% in fiscal 2023.

Current wording

Executive Search North America Adjusted EBITDA increased by $27.5 million, or 23%, to $148.2 million in fiscal 2025 compared to $120.7 million in fiscal 2024. The increase in Adjusted EBITDA was primarily driven by an increase in fee revenue in fiscal 2025 compared to fiscal 2024. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 28% in fiscal 2025 compared to 24% in fiscal 2024.

Previous wording

Consulting Adjusted EBITDA was $114.3 million in fiscal 2024, an increase of $5.8 million, or 5%, compared to $108.5 million in fiscal 2023. The increase in Adjusted EBITDA was driven by an increase in fee revenue, partially offset by increases in compensation and benefits expense and cost of services expense in fiscal 2024 compared to fiscal 2023. Consulting Adjusted EBITDA, as a percentage of fee revenue, was 16% in both fiscal 2024 and fiscal 2023.

Current wording

Executive Search EMEA Adjusted EBITDA increased by $5.8 million, or 22%, to $31.7 million in fiscal 2025 compared to $25.9 million in fiscal 2024. The increase in Adjusted EBITDA was primarily driven by an increase in fee revenue, partially offset by an increase in compensation and benefits expense in fiscal 2025 compared to fiscal 2024. Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, was 16% in fiscal 2025 compared to 14% in fiscal 2024.

Previous wording

Executive Search Asia Pacific Adjusted EBITDA decreased by $5.3 million, or 22%, to $18.9 million in fiscal 2024 compared to $24.2 million in fiscal 2023. The decrease in Adjusted EBITDA was primarily driven by lower fee revenue in the segment, partially offset by decreases in compensation and benefits expense and general and administrative expenses in fiscal 2024 compared to fiscal 2023. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 22% in fiscal 2024 compared to 25% in fiscal 2023.

Current wording

Executive Search Asia Pacific Adjusted EBITDA decreased by $0.8 million, or 4%, to $18.1 million in fiscal 2025 compared to $18.9 million in fiscal 2024. The decrease in Adjusted EBITDA was primarily driven by an increase in compensation and benefits expense, partially offset by an increase in fee revenue. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 21% in fiscal 2025 compared to 22% in fiscal 2024.

Previous wording

Executive Search Latin America Adjusted EBITDA decreased by $3.8 million, or 40%, to $5.6 million in fiscal 2024 compared to $9.4 million in fiscal 2023. The decrease in Adjusted EBITDA was driven by lower fee revenue in the segment and an increase in general and administrative expenses, partially offset by a decrease in compensation and benefits expense in fiscal 2024 compared to fiscal 2023. Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, was 19% in fiscal 2024 compared to 30% in fiscal 2023.

Current wording

Executive Search Latin America Adjusted EBITDA increased by $2.5 million, or 45%, to $8.1 million in fiscal 2025 compared to $5.6 million in fiscal 2024. The increase in Adjusted EBITDA was primarily driven by a decrease in general and administrative expenses in fiscal 2025 compared to fiscal 2024. Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, was 28% in fiscal 2025 compared to 19% in fiscal 2024.

Previous wording

Professional Search & Interim Adjusted EBITDA was $101.9 million in fiscal 2024, a decrease of $9.0 million, or 8%, compared to $110.9 million in fiscal 2023. The decrease in Adjusted EBITDA was mainly driven by higher cost of services expense, partially offset by higher fee revenue in the segment driven by the Acquired Companies and decreases in compensation and benefits expense (excluding integration/acquisition costs) and general and administrative expenses (excluding impairment charges and integration/acquisition costs). Professional Search & Interim Adjusted EBITDA, as a percentage of fee revenue, was 19% in fiscal 2024 compared to 22% in fiscal 2023.

Current wording

Professional Search & Interim Adjusted EBITDA was $107.6 million in fiscal 2025, an increase of $5.7 million, or 6%, compared to $101.9 million in fiscal 2024. The increase in Adjusted EBITDA was mainly driven by decreases in compensation and benefits expense (excluding integration/acquisition costs), cost of services expense, and general and administrative expenses (excluding integration/acquisition costs). These decreases were partially offset by lower fee revenue. Professional Search & Interim Adjusted EBITDA, as a percentage of fee revenue, was 21% in fiscal 2025 compared to 19% in fiscal 2024.

Previous wording

RPO Adjusted EBITDA was $40.4 million in fiscal 2024, a decrease of $12.2 million, or 23%, compared to $52.6 million in fiscal 2023. The decrease in Adjusted EBITDA was mainly driven by lower fee revenue in the segment, partially offset by decreases in compensation and benefits expense and general and administrative expenses (excluding impairment charges) in fiscal 2024 compared to fiscal 2023. RPO Adjusted EBITDA, as a percentage of fee revenue, was 11% in fiscal 2024 compared to 12% in fiscal 2023.

Current wording

RPO Adjusted EBITDA was $52.6 million in fiscal 2025, an increase of $12.2 million, or 30%, compared to $40.4 million in fiscal 2024. The increase in Adjusted EBITDA was primarily driven by a decrease in compensation and benefits expense, partially offset by an increase in general and administrative expenses (excluding impairment of right-of-use assets). RPO Adjusted EBITDA, as a percentage of fee revenue, was 15% in fiscal 2025 compared to 11% in fiscal 2024.

Previous wording

Other income, net was $30.7 million in fiscal 2024 compared to $5.3 million in fiscal 2023. The difference was primarily due to greater gains from the increase in the fair value of our marketable securities that are held in trust for the settlement of the Company's obligation under the ECAP in fiscal 2024 compared to fiscal 2023.

Current wording

Other income, net was $19.0 million in fiscal 2025 compared to $30.7 million in fiscal 2024. The difference was primarily due to lower gains from the increase in the fair value of our marketable securities that are held in trust for the settlement of the Company's obligation under the ECAP in fiscal 2025 compared to fiscal 2024.

Previous wording

Interest expense, net primarily relates to our Notes issued in December 2019, borrowings under our 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 $21.0 million in fiscal 2024 compared to $25.9 million in fiscal 2023. Interest expense, net decreased due to an increase in interest income earned on cash and cash equivalent balances as a result of higher interest rates in fiscal 2024 compared to fiscal 2023.

Current wording

Interest expense, net primarily relates to our Notes issued in December 2019, borrowings under our 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 $20.4 million in fiscal 2025 compared to $21.0 million in fiscal 2024. Interest expense, net decreased due to an increase in interest income earned on cash and cash equivalent balances and investment income from our marketable securities as a result of higher average cash and cash equivalent and marketable securities balances in fiscal 2025 compared to fiscal 2024, partially offset by an increase in interest expense on deferred compensation plans.

Previous wording

The provision for income tax was $50.1 million in fiscal 2024 compared to $82.7 million in fiscal 2023. This reflects a 22.5% effective tax rate for fiscal 2024 compared to a 28.0% effective tax rate for fiscal 2023. In addition to the impact of U.S. state income taxes and jurisdictional mix of earnings, which generally create variability in our effective tax rate over time, the lower effective tax rate in fiscal 2024 was primarily 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. The fiscal 2023 effective tax rate was higher due to a tax expense recorded for withholding taxes that were not eligible for credit.

Current wording

The provision for income tax was $93.8 million in fiscal 2025 compared to $50.1 million in fiscal 2024. This reflects a 27.2% effective tax rate for fiscal 2025 compared to a 22.5% effective tax rate for fiscal 2024. The effective tax rate for fiscal 2025 was primarily impacted by U.S. state income taxes and jurisdictional mix of earnings, which generally create variability in our effective tax rate over time. The lower effective tax rate in fiscal 2024 was primarily 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 consolidated results of income. Net income attributable to noncontrolling interest was $3.4 million and $3.5 million in fiscal 2024 and fiscal 2023, respectively.

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 consolidated results of income. Net income attributable to noncontrolling interest was $5.0 million and $3.4 million in fiscal 2025 and fiscal 2024, respectively.

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 April 30, 2024, the fair value of the Notes was $380.5 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 April 30, 2025, the fair value of the Notes was $389.0 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) provide for a new delayed draw term loan facility as described below, (iii)replace the London interbank offered rate with Term SOFR, and (iv) replace the existing financial covenants with financial covenants described below. The Amended Credit Agreement provides for five-year senior secured credit facilities in an aggregate amount of $1,150.0 million comprised of a $650.0 million revolving credit facility (the "Revolver") and a $500.0 million delayed draw term loan facility with the delayed draw having an expiration date of June 23, 2023 (the "Delayed Draw Facility", and together with the Revolver, the "Credit Facilities"). 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 Debtfor a further description of the Amended Credit Agreement. The Company has a total of $645.5 million and $1,145.4 million available under the Credit Facilities after $4.5 million and $4.6 million of standby letters of credit have been issued as of April 30, 2024 and 2023, respectively. Of the amount available under the Credit Facilities as of April 30, 2023, $500.0 million was under the Delayed Draw Facility that expired on June 24, 2023. The Company had a total of $13.2 million and $11.5 million of standby letters with other financial institutions as of April 30, 2024 and 2023, respectively. The standby letters of credit were generally issued as a result of entering into office premise leases.

Current 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 Debtfor a further description of the Amended Credit Agreement. The Company has a total of $645.6 million and $645.5 million available under the Revolver after $4.4 million and $4.5 million of standby letters of credit have been issued as of April 30, 2025 and 2024, respectively. The Company had a total of $13.1 million and $13.2 million of standby letters with other financial institutions as of April 30, 2025 and 2024, respectively. The standby letters of credit were generally issued in connection with the entry into certain 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. 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 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.