Core Insights - The staffing industry is evolving rapidly due to digital innovation, demographic changes, and the demand for flexible work arrangements, making effective staffing solutions critical for companies [3][4] - Staffing firms are increasingly viewed as growth enablers, helping organizations navigate economic uncertainties and scale for growth [4][5] Industry Overview - The staffing ecosystem has transformed, with organizations seeking strategic partners who understand talent needs and market trends [3] - Technology, including AI-enabled recruitment tools and talent analytics, is becoming standard in staffing strategies, allowing for faster and smarter hiring decisions [3] Investment Opportunities - The staffing sector presents compelling opportunities for investors, with firms like ADP, Korn Ferry, and Barrett Business Services positioned as key players in workforce transformation [5][6] - As hiring accelerates, staffing companies are at the forefront of providing scalable solutions that contribute to economic growth and long-term value creation [5] Company Highlights - **ADP**: A leader in human capital management solutions, ADP reported revenues of $5.1 billion for Q3 fiscal 2025, a 5.7% year-over-year increase, and is focused on expanding its cloud-based HCM and HR outsourcing solutions [8][9] - **Korn Ferry**: Specializes in executive search and workforce transformation, leveraging data-driven insights and AI tools to enhance hiring processes and leadership development [10][11][12] - **Barrett Business Services (BBSI)**: Provides HR outsourcing and management consulting, focusing on personalized client interactions and local market expertise, which supports its sustained growth [13]

Industry Overview - The Zacks Staffing industry encompasses a wide range of human resources and workforce solutions, including recruitment, payroll administration, and organizational consulting services tailored for various sectors [2] - The industry is currently facing challenges due to a contraction in the manufacturing sector, which negatively impacts the demand for temporary workers [3] Current Trends - The staffing industry is expected to recover to pre-pandemic revenues, income, and cash flows despite the ongoing contraction in manufacturing [3] - There is an increased adoption of remote work and hybrid models, prompting staffing agencies to prioritize flexible staffing solutions to meet evolving workplace preferences [4] - Technology is increasingly being utilized in the staffing sector to enhance operations, with AI-driven tools and platforms improving the efficiency of attracting and onboarding talent [5] Market Performance - The Zacks Staffing Firms industry has underperformed compared to the broader sector and the S&P 500, declining 32% over the past year, while the S&P 500 grew by 15.9% [8] - The industry currently trades at an EV-to-EBITDA ratio of 6.53X, significantly lower than the S&P 500's 18.03X and the sector's 11.37X [11] Company Highlights - **Korn Ferry (KFY)**: This firm is leveraging its broad array of solutions and large-scale client engagements, with a focus on technology and AI investments. KFY's digital subscription and license business is enhancing revenue stability [14][15] KFY has a Zacks Rank 3 and a consensus estimate for its 2025 bottom line at $5.16, reflecting an 11% increase over the past 60 days [17] - **RCM Technologies (RCMT)**: RCMT is transitioning into an innovative company with a strong growth narrative in its healthcare segment, particularly in K-12 behavioral health. The company is also expanding in life sciences and engineering, supported by multi-year contracts [20][22] RCMT holds a Zacks Rank 3 with a consensus estimate for its 2025 bottom line at $2.2 [22] - **Heidrick & Struggles International (HSII)**: HSII focuses on value creation through effective leadership placement, supported by a diversified revenue model and zero debt. The company has a Zacks Rank 3 and a consensus estimate for 2025 EPS at $2.86 [25][27]

Core Viewpoint - Korn/Ferry International (KFY) has reached a significant support level and is considered a potential investment opportunity due to a recent "golden cross" technical pattern, indicating a bullish breakout [1]. Technical Analysis - KFY's 50-day simple moving average has recently crossed above its 200-day moving average, forming a "golden cross," which is a bullish signal in technical analysis [1]. - A successful golden cross event consists of three stages: the stock price bottoms out, the shorter moving average crosses above the longer moving average, and the stock maintains upward momentum [2]. Performance Metrics - Over the past four weeks, KFY has gained 5.2%, indicating positive price movement [3]. - The company currently holds a 3 (Hold) rating on the Zacks Rank, suggesting it may be poised for further breakout [3]. - There has been one upward earnings estimate revision for KFY in the past 60 days, with no downward revisions, and the Zacks Consensus Estimate has also increased [3]. Investment Outlook - The combination of positive earnings estimate revisions and the technical breakout suggests that KFY could see more gains in the near future, making it a stock to watch for investors [4].

Part I [Business](index=6&type=section&id=Item%201.%20Business) Korn Ferry is a global consulting firm specializing in talent and organizational performance across five main solution areas Fiscal 2025 Financial Highlights | Metric | Value (USD Million) | | :--- | :--- | | Fee Revenue | $2,730.1 | | Net Income Attributable to Korn Ferry | $246.1 | | Net Income Margin | 9.0% | | Adjusted EBITDA | $463.9 | | Adjusted EBITDA Margin | 17.0% | | Diluted Earnings Per Share | $4.60 | - The Marquee and Diamond Accounts Program, covering 350 key clients, generated approximately **39%** of consolidated fee revenue in fiscal 2025[29](index=29&type=chunk) - Cross-solution referrals accounted for approximately **25%** of consolidated fee revenue in fiscal 2025, demonstrating successful collaboration across its business segments[30](index=30&type=chunk) - The company operates through five solution areas: Consulting, Digital, Executive Search, Professional Search & Interim, and RPO, corresponding to eight reportable segments[37](index=37&type=chunk) [Consulting](index=9&type=section&id=Consulting) The Consulting segment offers talent strategies and organizational solutions, serving over **4,300** clients in fiscal 2025 Consulting FY2025 Performance | Metric | Value | | :--- | :--- | | Fee Revenue | $662.7 million | | Adjusted EBITDA | $115.5 million | | Adjusted EBITDA Margin | 17.4% | | Year-End Staff | 1,599 | | Average Bill Rate | $439 per hour | - In fiscal 2025, the Consulting segment supported over **4,300** clients, and **28%** of its fee revenue was referred from other Korn Ferry solutions[43](index=43&type=chunk) [Digital](index=9&type=section&id=Digital) The Digital segment provides data-driven talent management tools via the Korn Ferry Talent Suite®, serving over **7,800** clients Digital FY2025 Performance | Metric | Value | | :--- | :--- | | Fee Revenue | $363.5 million | | Subscription/License Revenue | $137.7 million (+5.1% YoY) | | Adjusted EBITDA | $112.7 million | | Adjusted EBITDA Margin | 31.0% | - The Digital segment engaged with more than **7,800** clients in fiscal 2025, with **33%** of its fee revenue referred from other company solutions[45](index=45&type=chunk) [Executive Search](index=9&type=section&id=Executive%20Search) The Executive Search segment recruits board-level and senior executive talent, opening over **6,300** new engagements Executive Search FY2025 Performance | Metric | Value | | :--- | :--- | | Fee Revenue | $846.2 million | | Adjusted EBITDA | $206.2 million | | Adjusted EBITDA Margin | 24.4% | | New Engagements | > 6,300 | - In fiscal 2025, the Executive Search segment partnered with over **3,700** clients, including many of the world's most recognized public and private enterprises[51](index=51&type=chunk) [Professional Search & Interim](index=10&type=section&id=Professional%20Search%20%26%20Interim) This segment provides scalable recruiting and interim talent solutions for professional roles, partnering with over **3,200** clients Professional Search & Interim FY2025 Performance | Metric | Value | | :--- | :--- | | Fee Revenue | $503.5 million | | Adjusted EBITDA | $107.6 million | | Adjusted EBITDA Margin | 21.4% | | Average Bill Rate | $133 per hour | - The segment partnered with over **3,200** clients globally in fiscal 2025, with **23%** of its fee revenue referred from other Korn Ferry solutions[53](index=53&type=chunk) [Recruitment Process Outsourcing (RPO)](index=10&type=section&id=Recruitment%20Process%20Outsourcing%20(RPO)) The RPO segment offers high-volume, outsourced hiring solutions, securing **$533.4 million** in new business RPO FY2025 Performance | Metric | Value | | :--- | :--- | | Fee Revenue | $354.1 million | | Adjusted EBITDA | $52.6 million | | Adjusted EBITDA Margin | 14.9% | | New Business | $533.4 million | - The RPO segment supported over **240** enterprise clients in fiscal 2025, with **59%** of its fee revenue coming from referrals from other Korn Ferry solutions[59](index=59&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from competition, talent retention, indebtedness, cybersecurity, and global economic factors - The company faces significant competition from large consulting firms, specialized boutiques, and technology-based providers, which may lead to pricing pressures and reduced market share[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) - The loss of key consultants is a major risk, as the top ten consultants combined generated approximately **5%** of total fee revenues in fiscal 2025, and client relationships are highly portable[72](index=72&type=chunk) - The company's use of AI technology introduces risks related to operational challenges, data privacy, regulatory compliance, and potential IP infringement[108](index=108&type=chunk)[109](index=109&type=chunk) - As of April 30, 2025, the company had approximately **$400.0 million** in total indebtedness, which could affect its financial condition and ability to operate[96](index=96&type=chunk) - Goodwill and purchased intangibles accounted for approximately **27%** of total assets as of April 30, 2025, and changes in business conditions could lead to impairment charges[130](index=130&type=chunk) - In fiscal 2025, **47%** of fee revenue was generated from operations outside of the U.S., exposing the company to risks associated with social, political, and economic instability in international markets[134](index=134&type=chunk) [Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - Not applicable[150](index=150&type=chunk) [Cybersecurity](index=25&type=section&id=Item%201C.%20Cybersecurity) Korn Ferry maintains an ISO 27001-based cybersecurity program, overseen by the Board, with no material incidents to date - The company's cybersecurity program is based on the ISO 27001 framework, which incorporates NIST and Center for Internet Security frameworks[152](index=152&type=chunk) - The Board of Directors is responsible for overseeing the cybersecurity risk program and is briefed at least annually by the Chief Information Officer[160](index=160&type=chunk) - The company has not experienced a cybersecurity incident that has materially affected its business strategy, results of operations, or financial condition as of the report date[153](index=153&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company's corporate office is in Los Angeles, California, leasing **103** offices globally totaling **0.9 million** square feet - As of April 30, 2025, the company leased approximately **0.9 million** square feet of office space across **103** offices in **51** countries[162](index=162&type=chunk)[33](index=33&type=chunk) [Legal Proceedings](index=27&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in litigation but expects no material adverse effect on its business or financial condition - The company is not currently engaged in any legal proceedings that are expected to have a material adverse effect on its business[163](index=163&type=chunk) [Executive Officers](index=27&type=section&id=Information%20about%20our%20Executive%20Officers) The report details background information for five key executive officers, including the President and CEO, and segment CEOs Executive Officers as of April 30, 2025 | Name | Age | Position | | :--- | :--- | :--- | | Gary D. Burnison | 64 | President and Chief Executive Officer | | Robert P. Rozek | 64 | Executive Vice President, Chief Financial Officer and Chief Corporate Officer | | Lesley Uren | 63 | Chief Executive Officer, Consulting | | Michael Distefano | 55 | Chief Executive Officer, Professional Search & Interim | | Jeanne MacDonald | 56 | Chief Executive Officer, RPO | Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Korn Ferry's common stock trades on NYSE (KFY), with a capital allocation strategy including dividends and share repurchases - The Board of Directors increased the quarterly dividend to **$0.48** per share on March 10, 2025[181](index=181&type=chunk) Share Repurchases | Period | Amount Repurchased (USD Million) | | :--- | :--- | | Fiscal 2025 | $88.9 | | Fiscal 2024 | $52.5 | | Fiscal 2023 | $93.9 | Issuer Purchases of Equity Securities (Q4 FY2025) | Period | Total Shares Purchased | Average Price Paid Per Share ($) | Value of Shares Remaining for Purchase (USD Million) | | :--- | :--- | :--- | :--- | | Feb 2025 | 39,820 | 66.88 | 106.3 | | Mar 2025 | 65,577 | 66.97 | 102.0 | | Apr 2025 | 131,000 | 62.69 | 93.8 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2025 fee revenue decreased 1% to **$2.73 billion**, while net income increased 45% to **$246.1 million** due to cost management [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Fiscal 2025 fee revenue decreased 1% to **$2.73 billion**, while net income increased 45% to **$246.1 million** with a **17.0%** Adjusted EBITDA margin Consolidated Financial Performance (FY2025 vs. FY2024) | Metric | FY2025 (USD Million) | FY2024 (USD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Fee Revenue | $2,730.1 | $2,762.7 | (1%) | | Net Income Attributable to Korn Ferry | $246.1 | $169.2 | 45% | | Adjusted EBITDA | $463.9 | $408.2 | 14% | | Adjusted EBITDA Margin | 17.0% | 14.8% | +220 bps | Fee Revenue by Segment (FY2025 vs. FY2024) | Segment | FY2025 Fee Revenue (USD Million) | FY2024 Fee Revenue (USD Million) | Change (%) | | :--- | :--- | :--- | :--- | | Consulting | $662.7 | $695.0 | (5%) | | Digital | $363.5 | $366.7 | (1%) | | Executive Search | $846.2 | $806.2 | 5% | | Professional Search & Interim | $503.5 | $540.6 | (7%) | | RPO | $354.1 | $354.1 | 0% | - Compensation and benefits expense decreased by **$86.2 million (5%)** in FY2025, primarily due to a **7%** reduction in average headcount and lower commission expense[228](index=228&type=chunk) - Restructuring charges were significantly lower in FY2025 at **$1.9 million**, compared to **$68.6 million** in FY2024 related to a plan to eliminate excess capacity[249](index=249&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) As of April 30, 2025, the company held **$1.28 billion** in cash and marketable securities, generating **$364.4 million** cash from operations Cash and Liquidity Position (as of April 30, 2025) | Item | Value (USD Million) | | :--- | :--- | | Cash, Cash Equivalents & Marketable Securities | $1,277.0 | | Working Capital | $794.5 | | Long-Term Debt (Notes) | $400.0 | | Availability under Revolver | $645.6 | Cash Flow Summary (FY2025) | Cash Flow Activity | Value (USD Million) | | :--- | :--- | | Net Cash from Operating Activities | $364.4 | | Net Cash used in Investing Activities | ($125.5) | | Net Cash used in Financing Activities | ($190.7) | - On November 1, 2024, the company acquired Trilogy for **$44.4 million**, net of cash acquired[265](index=265&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from foreign currency fluctuations and interest rate changes, with mitigation strategies in place - The company is exposed to foreign currency risk as a material portion of its revenue and expenses are generated internationally. A **10%** change in the value of its ten largest currency exposures could result in a gain or loss of **$16.0 million**[290](index=290&type=chunk) - Interest rate risk is primarily related to the variable-rate Amended Credit Agreement, under which there were no amounts outstanding as of April 30, 2025[291](index=291&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of April 30, 2025, with no material internal control changes - Management concluded that the company's disclosure controls and procedures were effective as of April 30, 2025[295](index=295&type=chunk) Part III [Directors, Compensation, Security Ownership, and Accountant Fees](index=47&type=section&id=Item%2010,%2011,%2012,%2013,%2014) Information for Items 10 through 14 is incorporated by reference from the company's definitive proxy statement for its 2025 Annual Meeting - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the registrant's definitive proxy statement for its 2025 Annual Meeting of Stockholders[299](index=299&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=48&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K report - This section provides an index of all financial statements, schedules, and exhibits filed with the Form 10-K[307](index=307&type=chunk) Financial Statements and Supplementary Data [Reports on Financial Statements and Internal Controls](index=54&type=section&id=Reports%20on%20Financial%20Statements%20and%20Internal%20Controls) Management concluded internal control over financial reporting was effective, with Ernst & Young LLP issuing an unqualified opinion and identifying Consulting Revenue Recognition as a Critical Audit Matter - Management concluded that the Company's internal control over financial reporting was effective as of April 30, 2025[323](index=323&type=chunk) - Ernst & Young LLP issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[326](index=326&type=chunk)[335](index=335&type=chunk) - The audit identified 'Consulting Revenue Recognition' as a Critical Audit Matter, highlighting the complexity and judgment required in estimating total hours for project completion[339](index=339&type=chunk)[341](index=341&type=chunk)[342](index=342&type=chunk) [Notes to Consolidated Financial Statements](index=64&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment performance, debt, and acquisitions, including the **$44.4 million** Trilogy acquisition and restructuring charges Fee Revenue by Industry (FY2025) | Industry | Fee Revenue (USD Million) | Percentage of Total | | :--- | :--- | :--- | | Industrial | $814.6 | 29.9% | | Financial Services | $516.7 | 18.9% | | Life Sciences/Healthcare | $475.8 | 17.4% | | Technology | $396.0 | 14.5% | | Consumer Goods | $349.2 | 12.8% | | Education/Non–Profit/General | $177.7 | 6.5% | - The company has **$400 million** in **4.625%** Senior Unsecured Notes due 2027. As of April 30, 2025, the fair value of these notes was **$389.0 million**[466](index=466&type=chunk)[467](index=467&type=chunk) - Goodwill as of April 30, 2025 was **$948.8 million**, with the largest allocations to the Digital (**$326.1M**), Professional Search & Interim (**$293.3M**), and Consulting (**$173.2M**) segments[494](index=494&type=chunk) - The company recorded restructuring charges of **$1.9 million** in FY2025, following charges of **$68.6 million** in FY2024 and **$42.6 million** in FY2023 to align its workforce with business needs[490](index=490&type=chunk)[491](index=491&type=chunk)

Core Insights - The article introduces DCF Value Investor as a new contributing analyst on Seeking Alpha, emphasizing a focus on unique investment ideas across various stocks and commodities [2]. Group 1: Analyst's Approach - The analyst specializes in fundamental analysis and valuation, targeting undervalued companies based on their financial statements [2]. - Preferred sectors for analysis include materials, technology, and real estate, indicating a diverse investment strategy [2]. - The research process involves screening for undervalued companies, followed by a detailed fundamental analysis that includes valuation ratios and industry trends [2]. Group 2: Investment Philosophy - The investment thesis is grounded in value investing principles, aiming to uncover hidden opportunities in the market [2]. - The analyst seeks to provide a different perspective from traditional Wall Street views, focusing on overhyped stocks and conducting in-depth financial analysis [2].

Group 1 - The article provides a hold rating for Korn Ferry (NYSE: KFY), indicating that while there are early signs of recovery, they are not yet strong enough to warrant a more bullish outlook [1] - The investment approach emphasizes understanding core business economics, including competitive moat, unit economics, reinvestment runway, and management quality, which are crucial for long-term free cash flow generation and shareholder value creation [1] - The focus is on sectors with strong secular tailwinds, suggesting a strategic preference for industries that are expected to grow over time [1] Group 2 - The author identifies as a fundamental, valuation-driven investor with a decade of experience, managing personal funds sourced from friends and family [1] - The motivation for writing is to share investment insights and gather feedback from fellow investors, aiming to help readers focus on long-term equity value drivers [1] - The analysis is intended to be both analytical and accessible, adding value to readers seeking high-quality, long-term investment opportunities [1]

Company Overview - Invictus Origin is a high-alpha investment management firm founded by Oliver Rodzianko in May 2025, aiming to become a globally recognized actively managed fund [1] - The firm is developing innovative portfolio strategies, particularly through its Nasdaq High-Alpha Black Swan Portfolio, designed to sustainably outperform the Nasdaq-100 [1] - The portfolio maintains approximately 20% in strategic cash reserves, providing downside protection and flexibility during market disruptions [1] Leadership and Expertise - Oliver Rodzianko has extensive experience as a macro-focused investment analyst specializing in public equities, emphasizing fundamental valuation and long-term market cycles [1] - His sector expertise includes technology, semiconductors, artificial intelligence, and energy, integrating U.S. market specialization with international market awareness [1] - Rodzianko has built a strong reputation as an Investment Analyst for platforms like Seeking Alpha, TipRanks, and GuruFocus, providing actionable insights to sophisticated investors [1] Investment Strategy - The investment process at Invictus Origin focuses on capturing asymmetric upside by navigating market dislocations and intrinsic value cycles [1] - The firm is characterized by resilience, performance, and disciplined capital stewardship, supported by a complementary family office structure for lower-volatility capital preservation [1]

Financial Data and Key Metrics Changes - Consolidated fee revenue for the fourth quarter was $712 million, growing 4% year over year at constant currency [15] - Adjusted EBITDA grew 8% to $121 million, with an adjusted EBITDA margin increase of 70 basis points to 17% [15] - Adjusted diluted earnings per share increased 5% to $1.32 [15] - Estimated remaining fees under existing contracts totaled approximately $1.7 billion, up 12% year over year [16] Business Line Data and Key Metrics Changes - Executive Search grew 15% year over year at constant currency, marking the fourth consecutive quarter of growth [14] - Digital subscription and license new business grew to 40% of total digital new business, up from 37% in the prior year quarter [14] - RPO (Recruitment Process Outsourcing) secured $119 million in new business awards, with 77% attributed to new logos [14] - Average hourly bill rates in consulting and interim portions remained strong at $454 and $131, respectively [14] Market Data and Key Metrics Changes - Fee revenue in The Americas was flat year over year at constant currency, with growth in Executive Search and RPO [17] - EMEA fee revenue grew 9% year over year at constant currency, driven by growth in Executive Search and Professional Search [18] - APAC fee revenue grew 8% year over year at constant currency, primarily due to growth in Executive Search and RPO [18] Company Strategy and Development Direction - The company is focused on extending its offerings and solutions, particularly in technology and AI, to drive organizational performance for clients [8][10] - The strategy emphasizes synergistic fee revenue sources, with 77% of clients purchasing two or more solutions [7] - The company aims to innovate and enhance its TalentSuite product, which is expected to create a significant impact in the market [9][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing economic challenges, including a cost of living crisis and its impact on client spending [33][34] - Despite the challenging environment, the company remains optimistic about future growth opportunities and its ability to drive performance for clients [19] - The leadership team is focused on adapting to changing market demands and the need for different leadership qualities in the current economic climate [50][51] Other Important Information - The company returned $173 million to shareholders through share repurchases and dividends in fiscal year 2025 [18] - The company invested $44 million in M&A and $62 million in capital expenditures focused on technology platforms and product enhancements [18] Q&A Session Summary Question: Insights on new business trends and revenue trends by month - Management noted that May was stronger than April, indicating a positive trend despite ongoing uncertainties [23] Question: Executive Search growth specifics - Management indicated that long-term growth has been consistent, with quarterly fluctuations expected [26] Question: Update on sales cycles and client spending behaviors - Management highlighted a cost of living crisis affecting client spending and overall economic growth [33][34] Question: Performance of consulting and digital segments - Digital business grew 4% year over year, while consulting remained flat, reflecting larger engagements taking longer to implement [41] Question: Impact of international news on business confidence - Management expressed uncertainty about the impact of geopolitical events on business confidence, emphasizing the ongoing cost of living crisis [58][59] Question: Headcount productivity and revenue generation - Management discussed the importance of monetizing intellectual property and the scalability of their offerings [73][74] Question: Changes in leadership qualities sought by boards - Management emphasized the need for leaders who can embrace ambiguity and adapt to rapid changes in the market [50][51]

Financial Data and Key Metrics Changes - Consolidated fee revenue for Q4 was $712 million, growing 4% year over year at constant currency [16] - Adjusted EBITDA grew 8% to $121 million, with an adjusted EBITDA margin increase of 70 basis points to 17% [16] - Adjusted diluted earnings per share increased 5% to $1.32 [16] - Estimated remaining fees under existing contracts totaled approximately $1.7 billion, up 12% year over year [17] Business Line Data and Key Metrics Changes - Executive Search grew 15% year over year at constant currency, marking the fourth consecutive quarter of growth [15] - Digital subscription and license new business accounted for 40% of total digital new business, up from 37% in the prior year [15] - RPO (Recruitment Process Outsourcing) secured $119 million in new business awards, with 77% attributed to new logos [15] - Average hourly bill rates in consulting and interim portions remained strong at $454 and $131, respectively [15] Market Data and Key Metrics Changes - Fee revenue in The Americas was flat year over year at constant currency, with growth in Executive Search and RPO [19] - EMEA fee revenue grew 9% year over year at constant currency, driven by growth in Executive Search and Professional Search [20] - APAC fee revenue increased 8% year over year at constant currency, primarily due to growth in Executive Search and RPO [20] Company Strategy and Development Direction - The company is focused on innovation, particularly in technology and AI, to enhance organizational performance for clients [9] - A balanced approach to capital allocation has been maintained, with $173 million returned to shareholders through share repurchases and dividends [20] - The company aims to leverage its extensive data and intellectual property to create knowledge transfer and drive client success [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing economic challenges but expressed confidence in the company's strategic direction and growth opportunities [5][21] - The leadership emphasized the importance of adapting to changing client needs and the evolving labor market, particularly in light of demographic shifts [56][72] - The company expects Q1 fiscal 2026 fee revenue to range from $675 million to $695 million, with adjusted EBITDA margins between 16.8% and 17.2% [21] Other Important Information - The company has raised its dividend six times in five years, indicating a commitment to returning value to shareholders [8] - The introduction of a new operating metric, estimated remaining fees under existing contracts, demonstrates the effectiveness of the company's diversification strategy [16] Q&A Session Summary Question: Insights on new business trends and revenue trends by month - Management noted that May was stronger than April, indicating a positive trend despite ongoing uncertainties in the market [25] Question: Executive Search growth specifics - Management indicated that while there are ebbs and flows, the long-term growth rate for Executive Search remains strong, driven by demographic factors and changing leadership demands [29][30] Question: Update on sales cycles and client spending behaviors - Management highlighted the cost of living crisis impacting client spending and noted that companies are cutting costs, which has been consistent for several quarters [36] Question: Performance of consulting and digital segments - Digital business grew 4% year over year, while consulting remained flat, with larger engagements taking longer to implement [45] Question: Changes in leadership expectations - Management emphasized the need for leaders to embrace ambiguity and adapt to profound changes in the market, particularly with the rise of AI [54][56] Question: International growth and consultant productivity - Management reported strong growth in international markets and increased consultant productivity, attributing it to both company strategy and market factors [59] Question: Impact of international news on business confidence - Management acknowledged the uncertainty created by international events but emphasized the ongoing cost of living crisis as a significant concern [63] Question: Bonus payout and investable cash - Management indicated that the bonus payout would be sufficient to reward top performers, with investable cash around $675 million [66][67]

Group 1 - Korn Ferry (NYSE: KFY) shares increased by 8.8%, trading at $72.64 after reporting better-than-expected earnings and revenue for the fiscal fourth quarter [1] - The stock broke above resistance at $72, which had emerged in January, and reached its highest level since early December [1] - Korn Ferry is on track for its largest single-day percentage increase since November, with a year-to-date gain of 7.9% [1] Group 2 - The options market for Korn Ferry is experiencing 43 times the average intraday volume, indicating heightened trading activity [2] - The most popular options contracts are the June 75 call and the 75 put, with new positions being opened for both [2] - Short-term options traders are exhibiting a more bearish sentiment than usual, as indicated by a Schaeffer's put/call open interest ratio (SOIR) of 1.53, ranking in the 99th percentile of annual readings [2]