Core Insights - The company attributes its record performance to the 'We Are Korn Ferry' strategy, which transitions from five siloed businesses to a unified provider of integrated talent solutions [1] - Performance is driven by a structural 'labor recession' characterized by declining birth rates and aging demographics, creating a permanent scarcity of high-skilled talent, which insulates the firm from traditional unemployment cycles [1] - Operational efficiency has significantly improved over three years, with revenue per headcount increasing by nearly 33% and margins expanding by over 300 basis points [1] Strategic Focus - The strategic focus is on deepening penetration within 4,500 core clients, who represent 90% of revenue but currently utilize only 1.5 to 2 solutions on average [1] - The launch of Talent Suite is likened to 'Moneyball for business,' utilizing proprietary data to help clients identify the '20% of people doing 80% of the work' as they aim to do more with less [1] - Cross-business referrals reached a near-high of 27% of total business, validating the integrated go-to-market approach across consulting, digital, and search solutions [1]

Core Insights - Korn Ferry (KFY) has set a fee revenue target for Q4 2026 between $730 million and $750 million, indicating a strong outlook for the upcoming quarter [2] - The company is focusing on expanding its Talent Suite and promoting cross-solution growth, which reflects its strategic direction towards a more integrated business model [2] Management Perspective - CEO Gary Burnison emphasized the firm's transition from "One Korn Ferry" to "We Korn Ferry," highlighting the ongoing evolution and outstanding performance during the quarter [2]

Financial Data and Key Metrics Changes - Consolidated fee revenue grew 7% to $717 million, marking the fifth consecutive quarter of accelerating year-over-year growth [11] - Adjusted EBITDA increased by $9 million or 7.5% to $123 million, with an adjusted EBITDA margin of 17.2%, up 10 basis points [11] - Adjusted diluted earnings per share rose by $0.09 or 8% to $1.28 [11] - Total company new business, excluding RPO, grew 11%, with consulting and digital reaching all-time quarterly highs [11] Business Line Data and Key Metrics Changes - The interim portion of the PS&I solution grew 4%, benefiting from new business referrals [14] - Subscription and licensed new business grew 30% year-over-year, accounting for 43% of Digital's total new business [15] - Average hourly bill rates for consulting and interim grew by 2% and 15% respectively, indicating high client value [15] Market Data and Key Metrics Changes - Fee revenue in the Americas increased by 6%, driven by growth in executive search and RPO [16] - EMEA fee revenue grew 13%, with double-digit growth in executive search, consulting, digital, and PS&I [16] - APAC fee revenue slightly declined by 2%, with growth in executive search offset by weakness in other solutions [16] Company Strategy and Development Direction - The company is transitioning from "One Korn Ferry" to "We Are Korn Ferry," focusing on client centricity and deepening relationships with existing clients [7] - The strategy emphasizes expanding solutions offered to the top 4,500 clients, which represent 90% of revenue, with significant room for growth [8] - The company aims to leverage its Talent Suite as a foundational tool for business transformation, viewing it as a comprehensive solution rather than just a digital product [9] Management's Comments on Operating Environment and Future Outlook - Management highlighted the ongoing labor supply imbalance and the critical role of technology and AI in addressing workforce challenges [5] - The company remains confident in its outlook, expecting fee revenue in Q4 FY 2026 to range from $730 million to $750 million [16] - Management noted that the current economic environment remains challenging, but the diversified business model has allowed for resilience [10] Other Important Information - The board approved a 15% increase in the quarterly cash dividend to $0.55 per share, marking the seventh increase in six years [13] - Estimated remaining fees under existing contracts at the end of the quarter were $1.85 billion, up 11% year-over-year [12] Q&A Session Summary Question: How do you see AI impacting Korn Ferry? - Management believes AI will drive efficiency and create more opportunities, particularly in high-end labor markets [20][22] Question: Can the company grow in an environment of higher unemployment? - Management indicated that the diversified business model allows for growth even in challenging labor market conditions [26][27] Question: Will Talent Suite deepen existing relationships or expand into new ones? - Management sees Talent Suite primarily as a tool to deepen existing client relationships, with significant opportunities for expansion [30] Question: What drove the recent strengths in consulting new business? - The focus on transformation and AI readiness among clients has driven demand for consulting services [60] Question: What is the outlook for technology spending? - Management anticipates a balanced approach to capital deployment, with a potential shift towards stock buybacks [39][40] Question: What are the demand trends in the interim business? - Management noted a slight uptick in demand and emphasized the importance of high-end talent solutions [44] Question: How long until meaningful changes in client behavior are expected? - Management suggested it may take around 90 days to assess the impact of recent geopolitical events on client behavior [80]

Financial Data and Key Metrics Changes - The consolidated fee revenue grew 7% to $717 million, marking the fifth consecutive quarter of accelerating year-over-year growth [11] - Adjusted EBITDA increased by $9 million or 7.5% to $123 million, with an adjusted EBITDA margin of 17.2%, up 10 basis points [11] - Adjusted diluted earnings per share rose by $0.09 or 8% to $1.28 [11] - Total company new business, excluding RPO, grew 11%, with consulting and digital reaching all-time quarterly highs [11] Business Line Data and Key Metrics Changes - The interim portion of the PS&I solution grew 4%, benefiting from new business referrals [14] - Subscription and licensed new business grew 30% year-over-year, accounting for 43% of Digital's total new business [15] - Average hourly bill rates for consulting and interim grew by 2% and 15% respectively, indicating high client value [15] Market Data and Key Metrics Changes - Fee revenue in the Americas increased by 6%, led by growth in executive search and RPO [16] - EMEA fee revenue grew 13%, with double-digit growth in executive search, consulting, digital, and PS&I [16] - APAC fee revenue declined slightly by 2%, with growth in executive search offset by weakness in other solutions [16] Company Strategy and Development Direction - The company is focused on deepening relationships with existing clients, aiming to increase the number of solutions provided to the top 4,500 clients that represent 90% of revenue [7][17] - The "We Are Korn Ferry" initiative aims to unify the company's approach and enhance client centricity [7] - The company is leveraging its Talent Suite to provide data-driven insights for talent management, positioning itself as a leader in the evolving labor market [9][36] Management's Comments on Operating Environment and Future Outlook - Management highlighted the ongoing labor supply imbalance and the critical role of technology and AI in addressing workforce challenges [5][6] - The company expects fee revenue in Q4 FY 2026 to range from $730 million to $750 million, with adjusted EBITDA margins between 17.1% and 17.3% [16] - Management expressed confidence in the company's ability to continue driving top-line growth despite challenging market conditions [10][14] Other Important Information - The board approved a 15% increase in the quarterly cash dividend to $0.55 per share, marking the seventh increase in six years [13] - Estimated remaining fees under existing contracts at the end of the quarter were $1.85 billion, up 11% year-over-year [11] Q&A Session Summary Question: How do you see AI impacting Korn Ferry? - Management believes AI will drive efficiency and create more opportunities, particularly for high-end labor talent [20][22] Question: Can the company grow in an environment of higher unemployment? - Management noted the diversified business model allows for growth even in challenging labor market conditions [26][27] Question: Will Talent Suite deepen existing relationships or expand into new ones? - Management indicated that Talent Suite is primarily aimed at deepening existing client relationships [30] Question: What are the demand trends in the interim business? - Management reported a slight uptick in demand and emphasized the importance of high-end talent solutions [42][44] Question: How is the company approaching technology spending? - Management indicated a balanced approach to capital deployment, with a focus on technology investments [39][40] Question: What is the outlook for margin expansion? - Management expects margins to remain in the 16%-18% range, influenced by M&A execution and interim market opportunities [61] Question: How long until client behavior changes due to current economic conditions? - Management suggested it may take about 90 days to assess the impact of recent geopolitical events on client behavior [80]

Financial Data and Key Metrics Changes - Consolidated fee revenue grew 7% to $717 million, marking the fifth consecutive quarter of accelerating year-over-year growth [12] - Adjusted EBITDA increased by $9 million or 7.5% to $123 million, with an adjusted EBITDA margin of 17.2%, up 10 basis points [12] - Adjusted diluted earnings per share rose by $0.09 or 8% to $1.28 [12] - Total company new business, excluding RPO, grew 11%, with consulting and digital reaching all-time quarterly highs [12] Business Line Data and Key Metrics Changes - The interim portion of the PS&I solution grew 4%, benefiting from new business referrals [14] - Subscription and licensed new business grew 30% year-over-year, accounting for 43% of Digital's total new business [15] - Average hourly bill rates for consulting and interim grew by 2% and 15% respectively, indicating high client value [15] Market Data and Key Metrics Changes - Fee revenue in the Americas increased by 6%, led by growth in executive search and RPO [16] - EMEA fee revenue grew 13%, with double-digit growth in executive search, consulting, digital, and PS&I [16] - APAC fee revenue declined slightly by 2%, with growth in executive search offset by weakness in other solutions [16] Company Strategy and Development Direction - The company is focused on deepening relationships with existing clients, aiming to increase penetration of solutions among the top 4,500 clients that represent 90% of revenue [8][17] - The "We Are Korn Ferry" initiative aims to unify the company's approach and enhance client-centricity [7][17] - The company is leveraging its Talent Suite to provide data-driven insights for talent management, positioning itself as a leader in the evolving labor market [10][35] Management's Comments on Operating Environment and Future Outlook - Management highlighted the ongoing labor supply imbalance and the critical role of technology and AI in addressing workforce challenges [5][6] - The company expects fee revenue in Q4 FY 2026 to range from $730 million to $750 million, with adjusted EBITDA margins between 17.1% and 17.3% [16] - Management expressed confidence in the company's ability to grow despite economic uncertainties, citing a diversified business model [25][26] Other Important Information - The board approved a 15% increase in the quarterly cash dividend to $0.55 per share, marking the seventh increase in six years [13] - The company returned approximately $113 million to shareholders through share repurchases and dividends [13] Q&A Session Summary Question: How do you see AI impacting Korn Ferry? - Management believes AI will drive efficiency and create more opportunities, particularly in high-end labor markets [20][21] Question: Can the company grow in an environment of higher unemployment? - Management noted the diversified business model allows for growth even in challenging labor market conditions [25][26] Question: Is Talent Suite more likely to deepen existing relationships or expand into new ones? - Management indicated that Talent Suite is primarily aimed at deepening existing client relationships [28] Question: What drove the recent strengths in consulting new business? - The focus on transformation and AI readiness among clients has driven demand for consulting services [56][57] Question: What is the outlook for technology spending? - Management anticipates a balanced approach to capital deployment, with a potential shift towards stock buybacks [37][39] Question: What are the demand trends in the interim business? - Management noted a slight uptick in demand and emphasized the importance of high-end talent solutions [40][41] Question: How are sales cycles and client spending behavior changing? - Management reported no significant changes in sales cycles or client spending behavior despite macroeconomic conditions [46][49]

FY'26 Q3 Earnings Presentation MARCH 9, 2026 | © 2025 Korn Ferry Safe Harbor Statement FORWARD-LOOKING STATEMENTS Statements in this presentation that relate to goals, strategies, future plans and expectations are based on Korn Ferry's current expectations. You are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from those currently expected because of a number of risks and uncertainties. For a detailed description of many of those risks and u ...

Financial Data and Key Metrics Changes - Consolidated fee revenue grew 7% year-over-year to $722 million [11] - Adjusted EBITDA increased by $8 million, or 7% year-over-year, to $125 million, with an adjusted EBITDA margin of 17.3% [11] - Adjusted diluted earnings per share rose by $0.12, or 10% year-over-year, to $1.33 [11] - Estimated remaining fees under existing contracts increased to $1.84 billion, up 20% year-over-year [10] Business Line Data and Key Metrics Changes - Executive search fee revenue grew 10%, marking the sixth consecutive quarter of year-over-year growth [11] - Professional search and interim fee revenue increased by 17% year-over-year, with professional search up 7% and interim up 24% [11] - RPO delivered $253 million of new business in the quarter, with 16% from new logos and 84% from renewals [11] - Business referrals grew to 27.6% of consolidated fee revenue, up approximately 250 basis points year-over-year and quarter-sequential [10] Market Data and Key Metrics Changes - Fee revenue in the Americas was up 3% year-over-year, led by executive search and RPO [12] - EMEA fee revenue grew 20% year-over-year, with growth in executive search, professional search, interim, consulting, and digital [12] - APAC fee revenue remained flat, with moderate growth in executive search and professional search, offset by slight declines in RPO, consulting, and digital [12] Company Strategy and Development Direction - The company is focusing on a unified strategy under "We Are Korn Ferry," emphasizing client centricity and integrated solutions [4][7] - The launch of the new Talent Suite technology platform is expected to enhance the company's ability to serve clients as a holistic talent partner [9] - The company aims to drive long-term, profitable, and sustainable growth by leveraging foundational assets to deliver differentiated solutions [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for a strong 2026, despite the uncertain business environment [7][15] - The company anticipates fee revenue in the third quarter of fiscal 2026 to range from $680-$694 million, with adjusted EBITDA margins between 17.2%-17.4% [14] - Management noted that the current economic conditions have not significantly changed, and they remain focused on identified growth opportunities [25][59] Other Important Information - The company returned almost $70 million to shareholders through combined repurchases and dividends during the quarter [12] - Capital expenditures of $43 million were focused on Talent Suite, productivity tools, and other solution enhancements [13] Q&A Session Summary Question: Strength in Executive Search Business - Management noted significant growth in executive search worldwide, driven by changing leadership needs and demographic shifts [17][18] Question: Placement Solutions Improvement - Management confirmed that the strategy is working, with sequential growth in Professional Search and Interim Solutions, and highlighted the quality of their IP and AI integration [24][25] Question: Consulting Bill Rates and Margins - Management indicated that bill rates have increased due to larger, more impactful engagements, and there is substantial opportunity for further growth in consulting [26][30] Question: Seasonal Trends in Executive Search - Management expects typical seasonal softness in Q3 due to holiday impacts, which is factored into their guidance [33] Question: Digital Business Performance - Management acknowledged a purposeful reduction in sellers in the digital solution to pivot towards enterprise-oriented sales, impacting top-line performance [58][59] Question: New RPO Contracts - The majority of new RPO contracts were renewals from existing marquee clients, with a significant portion coming from the healthcare and industrial sectors [60][61]

Financial Data and Key Metrics Changes - Consolidated fee revenue grew 7% year-over-year to $722 million [11] - Adjusted EBITDA increased by $8 million, or 7% year-over-year, to $125 million, with an adjusted EBITDA margin of 17.3% [11] - Adjusted diluted earnings per share rose by $0.12, or 10% year-over-year, to $1.33 [11] Business Line Data and Key Metrics Changes - Executive search fee revenue grew 10%, marking the sixth consecutive quarter of year-over-year growth [11] - Professional search and interim fee revenue increased by 17% year-over-year, with professional search up 7% and interim, including the Trilogy acquisition, up 24% [11] - RPO delivered $253 million of new business in the quarter, with 16% from new logos and 84% from renewals [11] Market Data and Key Metrics Changes - Fee revenue in the Americas was up 3% year-over-year, driven by executive search and RPO [12] - EMEA fee revenue grew 20% year-over-year, with increases in executive search, professional search, interim, consulting, and digital [12] - APAC fee revenue remained flat, with moderate growth in executive search and professional search, offset by slight declines in RPO, consulting, and digital [12] Company Strategy and Development Direction - The company is focusing on a unified strategy under "We Are Korn Ferry," emphasizing client centricity and integrated solutions [4][7] - The launch of the new Talent Suite technology platform is expected to enhance the company's ability to serve clients and leverage foundational assets [9] - The company aims to drive long-term, profitable, and sustainable growth by delivering differentiated solutions [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for a strong 2026, despite economic uncertainties [7][14] - The company anticipates fee revenue for the third quarter of fiscal 2026 to range from $680 million to $694 million, with adjusted EBITDA margins between 17.2% and 17.4% [14] - Management noted that the current business environment presents opportunities for growth, particularly in organizational strategy and larger engagements [35] Other Important Information - Estimated remaining fees under existing contracts increased to $1.84 billion, with approximately 57% expected to be recognized within the next year [11] - The company returned almost $70 million to shareholders through repurchases and dividends during the quarter [12] Q&A Session Summary Question: Strength in executive search business - Management noted significant growth in executive search worldwide, driven by changing leadership needs and demographic shifts [17][18] Question: Placement-type solutions improvement - Management confirmed that the strategy is working, with sequential growth in professional search and interim solutions, and noted the quality of their IP and AI usage [24][25] Question: Consulting bill rates and margins - Management indicated that bill rates have increased due to larger engagements, and there is substantial opportunity for further growth in consulting [26][30] Question: Seasonal expectations for executive search - Management expects typical seasonal softness in Q3 due to holiday impacts, which is factored into guidance [33] Question: Digital business performance - Management acknowledged a purposeful reduction in sellers in the digital solution to pivot towards enterprise-oriented sales, impacting top-line performance [58] Question: New RPO contracts - The majority of new RPO contracts were renewals from marquee clients, with a significant portion coming from the healthcare and industrial sectors [61]

Financial Data and Key Metrics Changes - Consolidated fee revenue grew 7% year-over-year to $722 million [11] - Adjusted EBITDA increased by $8 million, or 7% year-over-year, to $125 million, with an adjusted EBITDA margin of 17.3% [11] - Adjusted diluted earnings per share rose by $0.12, or 10% year-over-year, to $1.33 [11] Business Line Data and Key Metrics Changes - Executive search fee revenue grew 10%, marking the sixth consecutive quarter of year-over-year growth [11] - Professional search and interim fee revenue increased by 17% year-over-year, with professional search up 7% and interim, including the Trilogy acquisition, up 24% [11] - RPO delivered $253 million of new business in the quarter, with 16% from new logos and 84% from renewals [11] Market Data and Key Metrics Changes - Fee revenue in the Americas was up 3% year-over-year, led by executive search and RPO [12] - EMEA fee revenue grew 20% year-over-year, with growth in executive search, professional search, interim, consulting, and digital [12] - APAC fee revenue remained flat, with moderate growth in executive search and professional search, offset by slight declines in RPO, consulting, and digital [12] Company Strategy and Development Direction - The company is focusing on a unified "We Are Korn Ferry" strategy, integrating multiple solutions to create enduring client partnerships [4][6] - The launch of the new Talent Suite technology platform is expected to enhance the company's ability to serve clients as a holistic talent partner [9] - The company aims to drive long-term, profitable, and sustainable growth by leveraging foundational assets to deliver differentiated solutions [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for a strong 2026, emphasizing the need for talent in the current uncertain business environment [8][14] - The outlook for the third quarter of fiscal 2026 anticipates fee revenue between $680 million and $694 million, with adjusted EBITDA margins ranging from 17.2% to 17.4% [13] - Management noted that the current economic conditions have not significantly changed, and they remain focused on identified growth opportunities [24] Other Important Information - Estimated remaining fees under existing contracts increased to $1.84 billion, up 20% year-over-year [11] - The company returned almost $70 million to shareholders through repurchases and dividends during the quarter [12] - The Talent Suite launch is expected to provide significant opportunities in areas such as pay transparency and analytics [47] Q&A Session Summary Question: Strength in executive search business - Management noted significant growth in executive search worldwide, driven by changing leadership needs and the retirement of baby boomers [16] Question: Historical referral rates and future expectations - Management indicated a historical referral rate of 25%-26%, with a goal to increase it to 35% as the strategy evolves [18] Question: Improvement in placement-type solutions - Management confirmed that the strategy is working, with sequential growth in Professional Search and Interim Solutions, and noted the quality of their IP and AI usage in RPO [24] Question: Consulting bill rates and margin dynamics - Management highlighted that bill rates have increased due to larger, more impactful engagements, and there remains substantial opportunity for further growth [27][33] Question: Impact of AI on search efficiency - Management stated that while technology has improved efficiency, the larger impact comes from changes in work processes post-COVID [38] Question: Financial impact of Talent Suite - Management expects the Talent Suite to significantly enhance client engagement and analytics capabilities, leading to increased monetization of IP [46][47] Question: Changes in behavior since competitor went private - Management reported no noticeable changes in market behavior following the competitor's transition to private [51]

Korn Ferry (NYSE: KFY) FY Conference Summary Company Overview - Korn Ferry has transformed from a $700 million business in 2012, primarily focused on executive search, to a nearly $3 billion organization today, offering a wide range of services related to employee engagement and talent management [3][4][5] Core Capabilities - The company has developed capabilities in organizational strategy, talent acquisition, leadership development, and total rewards consulting, making it unique in the industry [4][5] - Korn Ferry is the largest assessment house globally, utilizing psychometric assessments developed by a team of 25 I/O psychologists [4][5] Talent Suite Launch - Korn Ferry recently launched its Talent Suite, a single technology platform designed to integrate data, intellectual property, and behavioral science to enhance service delivery [6][30] - The Talent Suite aims to improve efficiency and effectiveness in utilizing the company's extensive data assets, which include assessments of 110 million people and 25 million paid data points [6][30] Go-to-Market Strategy - The primary go-to-market strategy focuses on marquee and diamond accounts, which represent the top 350 clients and account for approximately 40% of total fee revenue [13][14] - The company aims to increase cross-selling opportunities, with 25-26% of fee revenues currently generated from referrals between different service areas [14] Impact of AI - Korn Ferry recognizes the significant impact of AI on the talent marketplace and is actively integrating AI into its services to enhance client offerings [15][16] - The company is helping clients redesign their organizations to leverage AI effectively, focusing on talent readiness and development [17][22] Financial Performance - Korn Ferry has achieved an adjusted EBITDA margin of around 17%, with a revenue run rate between $2.8 billion and $2.9 billion, maintaining the same workforce of 9,000 employees [61][62] - The company has reduced its real estate footprint by 35% and cut business development costs significantly, contributing to improved profitability [62][63] Digital Business Growth - The digital business has grown to approximately $360 million-$370 million, with subscription and license revenue making up about 40% of that total [41][42] - Korn Ferry aims to increase the subscription and license portion of its digital business to 60-65% through the Talent Suite [42] Capital Allocation and M&A Strategy - Korn Ferry adopts a disciplined approach to M&A, focusing on strategic alignment with human capital and ensuring financial viability [66][67] - The company prioritizes reinvesting in its business, including technology and talent development, while also returning capital to shareholders through dividends and buybacks [68][69] Future Outlook - The company is optimistic about the future, particularly with the rollout of the Talent Suite and the potential for further integration of AI into its services [70][72] - Korn Ferry aims to break down internal silos and position itself as a comprehensive talent partner for clients, enhancing its value proposition [72][73]