Korn Ferry: Form 10-Q for the period ended Jul 31, 2026

Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain certain statements that we believe are, or may be considered to be, “forward-looking” statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “will,” “likely,” “estimates,” “potential,” “continue” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals, including the timing and anticipated impacts of our business strategy, expected demand for and relevance of our products and services, expected benefits and synergies of the acquisition of Auxey Holdco Limited (“AMS”) and expected results of our business diversification strategy, are also forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause our actual results or outcomes, or the timing of our results or outcomes, to differ materially from those contemplated by the relevant forward-looking statement. The principal risk factors that could cause actual performance, results, outcomes and timing and future actions to differ materially from the forward-looking statements include, but are not limited to, those relating to global and local political and or economic developments in or affecting countries where we have operations, such as inflation, trade wars, global slowdowns, or recessions, competition, geopolitical tensions, shifts in global trade patterns, changes in demand for our services as a result of automation, dependence on and costs of attracting and retaining qualified and experienced consultants, impact of inflationary pressures on our profitability, maintaining our relationships with customers and suppliers and retaining key employees, maintaining our brand name and professional reputation, our ability to successfully integrate acquired businesses, including the operations and employees of AMS, our ability to recognize the anticipated benefits of the acquisition of AMS which may be affected by, among other things, competition, our ability to grow and manage growth profitably, our ability to maintain relationships with customers and suppliers and retain key employees, costs related to the AMS acquisition, 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, the impact of treaties or regulations on our business and our Company, deferred tax assets that we may not be able to use, our ability to develop new products and services, changes in our accounting estimates and assumptions, the utilization and billing rates of our consultants, seasonality, the use of social media platforms, the ability to effect acquisitions, resulting organizational changes, our indebtedness, the ultimate magnitude and duration of any future pandemics or similar outbreaks, and related restrictions and operational requirements that apply to our business and the businesses of our clients, and any related negative impacts on our business, employees, customers and our ability to provide services in affected regions, and the matters disclosed under the heading “Risk Factors” in the Company’s Exchange Act reports, including Item 1A included in the Annual Report on Form 10-K for the fiscal year ended April 30, 2026 (the “Form 10-K”). Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this Quarterly Report on Form 10-Q, and we undertake no obligation to publicly update these forward-looking statements to reflect subsequent events, circumstances or otherwise, except as required by law.

The following presentation of management’s discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. We also make available on the Investor Relations portion of our website earnings slides and other important information, which we encourage you to review.

Executive Summary

Korn Ferry (referred to herein as the “Company” or in the first-person notations “we,” “our” and “us”) is a global consulting firm that powers individual and business performance. The impact we create spans entire organizations, but it always starts with people.

In every market cycle and every technology shift, strategy sets direction, but people make it happen. They lead, adapt, innovate and execute the work that moves organizations forward.

For more than 50 years, we studied how people and organizations perform. With decades of workforce intelligence and real-world experience, we've built a deep understanding of what drives organizational success, what gets in the way and what needs to change. We put that insight into practice every day.

Korn Ferry works across the full organization—from strategy and leadership to hiring, development, rewards and the roles, skills and workforce models needed for the future. Instead of addressing individual parts of that system, we look across and connect them. By aligning leaders, teams, and organizations around a common definition of success, we help organizations make better decisions, execute with confidence and achieve stronger outcomes.

Our business is organized around three connected elements: Foundational Assets, Capabilities, and Integrated Solutions. Together, they allow us to apply what we know, deploy the right expertise and combine capabilities to address high-priority business challenges.

Our Foundational Assets are the proprietary data, science and IP that inform our work and help clients make better people and organizational decisions.

Our Capabilities are the areas of expertise we bring to clients.

• Organization Strategy: Aligning people, processes, structures and operating models to support business goals.
• Assessment & Succession: Evaluating potential, readiness and fit to guide hiring, promotion, mobility and succession decisions.
• Talent Acquisition: Sourcing and hiring talent across all levels through executive search, professional recruiting, interim talent and Recruitment Process Outsourcing (“RPO”).
• Leadership & Professional Development: Developing leaders and building critical skills through coaching, experiential learning and scalable digital programs.
• Total Rewards: Designing compensation, benefits, recognition and pay transparency strategies that support performance and reflect evolving regulatory and business priorities.
• Board and Chief Executive Officer (“CEO”) Services: Advising boards and CEOs on leadership transitions, governance, succession and long-term planning.

Our Integrated Solutions combine multiple Capabilities to address high-priority business challenges.

Korn Ferry serves clients through strategic account partnerships and flexible engagement models tailored to client needs. Core to this is our Marquee and Diamond Accounts Program (the “Program”)—a structured approach to managing long-term relationships with many of the world’s most complex organizations.

Clients within the Program are supported by dedicated account leaders who coordinate engagement across Korn Ferry’s portfolio. This model supports consistent delivery, a deeper understanding of client priorities and broader access to the firm's capabilities. As of July 31, 2026, our 350 Marquee and Diamond accounts represented almost 40% of consolidated fee revenue—more than double their contribution at the Program’s inception.

Beginning in fiscal 2027, we reassessed and realigned our organizational structure from a solution-based presentation to a reporting model by geography, with the following three reportable segments: (i) Americas, (ii) Europe, Middle East and Africa (“EMEA”), and (iii) Asia Pacific (“APAC” and collectively with Americas and EMEA, the “Regions”). Through these reportable segments we deliver services through three Solution groups: (i) Search (Executive Search and Professional Search), (ii) Talent & Organizational Solutions (Consulting and Digital), and (iii) Workforce Solutions (RPO and Interim). These solutions reflect the breadth of our expertise and allow us to develop deep specialization, build proprietary insight and innovate within the Company’s areas of focus. They are further strengthened by industry, functional and regional expertise that gives Korn Ferry a practical understanding of the market dynamics, leadership challenges, workforce trends and competitive forces shaping organizations around the world. Centralized corporate functions help connect expertise, intelligence and delivery across the firm, driving alignment, connectivity and scale. We believe this realigned structure better reflects how work is delivered across the firm, aligns more closely with how clients buy our services and supports our We Are Korn Ferry operating model.

Q1 FY'27 Performance Highlights

• Fee revenue was $756.5 million, an increase of 7% year-over-year, with growth in all Regions and double-digit growth in Search and Workforce Solutions.
• Net income attributable to Korn Ferry was $69.0 million, an increase of 4% year-over-year, with a margin of 9.1%.
• Adjusted EBITDA was $128.2 million, an increase of 7% year-over-year, with a margin of 17%.
• Diluted earnings per share was $1.32, up 5% year-over-year.

The Company evaluates performance and allocates resources based on the chief operating decision maker’s review of two key measures on a geographic basis: (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 impairment charges). For the three months ended July 31, 2026 and 2025, Adjusted EBITDA excluded integration/acquisition costs of $7.6 million and $1.5 million, respectively.

Consolidated Adjusted EBITDA and Consolidated 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.

Management believes the presentation of these non-GAAP financial measures provides meaningful supplemental information regarding Korn Ferry’s performance by excluding certain charges, items of income and other items that may not be indicative of Korn Ferry’s ongoing operating results. The use of these non-GAAP financial measures facilitates comparisons to Korn Ferry’s historical performance and the identification of operating trends that may otherwise be distorted by the factors discussed above. Korn Ferry includes these non-GAAP financial measures because management believes it is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its evaluation of Korn Ferry’s ongoing operations and financial and operational decision-making. The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies in the accompanying condensed consolidated financial statements, except that the above noted items are excluded to arrive at Adjusted EBITDA. Management further believes that Adjusted EBITDA is useful to investors because it is frequently used by investors and other interested parties to measure operating performance among companies with different capital structures, effective tax rates and tax attributes and capitalized asset values, all of which can vary substantially from company to company.

Results of Operations

The following table summarizes the results of our operations as a percentage of fee revenue:

(Numbers may not total exactly due to rounding)

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The following tables summarize the results of our operations:

(Numbers may not total exactly due to rounding)

(dollars in thousands)

(dollars in thousands)

25

(dollars in thousands)

Three Months Ended July 31, 2026 Compared to Three Months Ended July 31, 2025

Fee Revenue

Fee revenue was $756.5 million in the three months ended July 31, 2026, an increase of $47.9 million, or 7%, compared to $708.6 million in the year-ago quarter. Fee revenue grew in all Regions year-over-year, led by double-digit growth in Search and Workforce Solutions.

Americas reported fee revenue of $442.1 million, an increase of $38.0 million, or 9%, in the three months ended July 31, 2026 compared to $404.1 million in the year-ago quarter. The increase in fee revenue was primarily driven by increases of 14% in both Workforce Solutions and Search during the three months ended July 31, 2026 compared to the year-ago quarter.

EMEA reported fee revenue of $227.7 million, an increase of $8.7 million, or 4%, in the three months ended July 31, 2026 compared to $219.0 million in the year-ago quarter. Fee revenue increased in all Solution Groups, led by an 8% and 4% increase in Workforce Solutions and Talent & Organizational Solutions, respectively.

APAC reported fee revenue of $86.7 million, an increase of $1.2 million, or 1%, in the three months ended July 31, 2026 compared to $85.5 million in the year-ago quarter. The increase in fee revenue was driven by a 7% increase in Search, offset by a decline in the other Solution Groups during the three months ended July 31, 2026 compared to the year-ago quarter.

Compensation and Benefits

Compensation and benefits expense increased by $16.0 million, or 3%, to $477.4 million in the three months ended July 31, 2026 from $461.4 million in the year-ago quarter. The increase in compensation and benefits expense was primarily due to increases in severance-related expenses of $9.8 million and salaries and related payroll taxes of $7.4 million compared to the year-ago quarter, partially offset by integration and acquisition cost of $1.5 million incurred in the year-ago quarter.

Americas compensation and benefits expense increased by $9.8 million, or 4%, to $258.3 million in the three months ended July 31, 2026 compared to $248.5 million in the year-ago quarter. Compensation and benefits expense increased primarily due to an increase in performance-related bonus expense of $8.0 million due to higher fee revenue in the three months ended July 31, 2026 compared to the year-ago quarter and higher severance-related expenses of $2.5 million.

EMEA compensation and benefits expense increased by $2.8 million, or 2%, to $143.1 million in the three months ended July 31, 2026 compared to $140.3 million in the year-ago quarter. Compensation and benefits expense increased primarily due to higher severance-related expenses of $7.1 million and salaries and related payroll taxes of $3.7 million in the three months ended July 31, 2026 compared to the year-ago quarter. These increases were partially offset by a decrease in performance-related bonus expense of $8.9 million in the three months ended July 31, 2026 compared to the year-ago quarter.

APAC compensation and benefits expense increased by $1.2 million, or 2%, to $54.1 million in the three months ended July 31, 2026 compared to $52.9 million in the year-ago quarter. Compensation and benefits expense increased primarily due to higher salaries and related payroll taxes of $0.9 million in the three months ended July 31, 2026 compared to the year-ago quarter.

Corporate compensation and benefits expense increased by $2.0 million, or 10%, to $21.8 million in the three months ended July 31, 2026 compared to $19.8 million in the year-ago quarter. Compensation and benefits expense increased primarily due to higher salaries and related payroll taxes and restricted stock compensation expense of $1.2 million and $0.9 million, respectively, in the three months ended July 31, 2026 compared to the year-ago quarter.

General and Administrative Expenses

General and administrative expenses increased by $16.3 million, or 26%, to $80.2 million in the three months ended July 31, 2026 from $63.9 million in the year-ago quarter. The increase in general and administrative expenses was primarily due to increases in integration and acquisition cost and marketing and business development expenses of $7.6 million and $6.8 million, respectively, in the three months ended July 31, 2026 compared to the year-ago quarter.

Americas general and administrative expenses increased by $0.3 million, or 2%, to $19.8 million in the three months ended July 31, 2026, compared to $19.5 million in the year-ago quarter.

EMEA general and administrative expenses increased by $0.7 million, or 4%, to $18.3 million in the three months ended July 31, 2026, compared to $17.6 million in the year-ago quarter.

APAC general and administrative expenses increased by $1.4 million, or 14%, to $11.2 million in the three months ended July 31, 2026 compared to $9.8 million in the year-ago quarter. The increase in general and administrative expenses was primarily due to an increase of $1.6 million in marketing and business development expenses in the three months ended July 31, 2026 compared to the year-ago quarter.

Corporate general and administrative expenses increased by $14.0 million, or 83%, to $30.9 million in the three months ended July 31, 2026, compared to $16.9 million in the year-ago quarter. The increase in general and administrative expenses was primarily due to an increase of $7.6 million in integration and acquisition costs coupled with higher marketing and business development expenses of $4.6 million in the three months ended July 31, 2026 compared to the year-ago quarter.

Cost of Services Expense

Cost of services expense consists of contractor and product costs related to delivery of various services and products through our integrated solutions. Cost of services expense increased by $6.1 million, or 8%, to $83.3 million in the three months ended July 31, 2026 compared to $77.2 million in the year-ago quarter. Workforce Solutions accounted for $7.4 million of the increase due to an increase in fee revenue generated from solutions offered as part of our Workforce Solutions which have a higher cost of service expense compared to the Company's other services.

Depreciation and Amortization Expenses

Depreciation and amortization expenses decreased by $0.5 million, or 2%, to $22.2 million in the three months ended July 31, 2026 compared to $22.7 million in the year-ago quarter.

Net Income Attributable to Korn Ferry

Net income attributable to Korn Ferry increased by $2.4 million, or 4%, to $69.0 million in the three months ended July 31, 2026, as compared to $66.6 million in the year-ago quarter. The increase in net income attributable to Korn Ferry was primarily due to an increase in fee revenue of $47.9 million, partially offset by increases in general and administrative expenses, compensation and benefits expense and cost of services expense of $16.3 million, $16.0 million and $6.1 million, respectively, and a decrease in other income, net of $7.7 million in the three months ended July 31, 2026 compared to the year-ago quarter. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 9% in both the three months ended July 31, 2026 and 2025.

Adjusted EBITDA

Adjusted EBITDA increased by $7.8 million, or 7%, to $128.2 million in the three months ended July 31, 2026 as compared to $120.4 million in the year-ago quarter. The increase in Adjusted EBITDA was driven by an increase in fee revenue, partially offset by increases in compensation and benefits expense (excluding integration/acquisition costs), general and administrative expenses (excluding integration/acquisition costs), and cost of services expense. Adjusted EBITDA, as a percentage of fee revenue, was 17% in both the three months ended July 31, 2026 and 2025.

Americas Adjusted EBITDA increased $15.7 million, or 16%, to $116.4 million in the three months ended July 31, 2026 as compared to $100.7 million in the year-ago quarter. The increase in Adjusted EBITDA was driven by an increase in fee revenue, partially offset by increases in compensation and benefits expense (excluding integration/acquisition costs) and cost of services expense. Americas Adjusted EBITDA, as a percentage of fee revenue, was 26% and 25% in the three months ended July 31, 2026 and 2025, respectively.

EMEA Adjusted EBITDA was $37.3 million in the three months ended July 31, 2026, an increase of $1.6 million, or 4%, as compared to $35.7 million in the year-ago quarter. The increase in Adjusted EBITDA was driven by an increase in fee revenue, partially offset by increases in compensation and benefits expense (excluding integration/acquisition costs) and cost of services expense. EMEA Adjusted EBITDA, as a percentage of fee revenue, was 16% in both the three months ended July 31, 2026 and 2025.

APAC Adjusted EBITDA was $19.2 million in the three months ended July 31, 2026, a decrease of $0.6 million, or 3%, as compared to $19.8 million in the year-ago quarter. APAC Adjusted EBITDA, as a percentage of fee revenue, was 22% and 23% in the three months ended July 31, 2026 and 2025, respectively.

Other Income, Net

Other income, net was $5.1 million in the three months ended July 31, 2026 compared to $12.8 million in the year-ago quarter. The decrease was primarily due to a decrease in the gains generated from the change in fair value of our marketable securities that are held in trust for the settlement of the Company's obligation under the Executive Capital Accumulation Plan and similar plans in Asia Pacific and Canada during the three months ended July 31, 2026 compared to the year-ago quarter.

Interest Expense, Net

Interest expense, net primarily relates to the Company's 4.625% Senior Unsecured Notes due 2027 (the “Notes”) issued in December 2019, borrowings under company-owned life insurance (“COLI”) policies and interest cost related to our deferred compensation plans, which are partially offset by interest earned on cash and cash equivalent balances. Interest expense, net was $4.3 million in the three months ended July 31, 2026 compared to $3.5 million in the year-ago quarter.

Income Tax Provision

The provision for income tax was $24.6 million in the three months ended July 31, 2026, with an effective tax rate of 26.2%, compared to $25.3 million in the three months ended July 31, 2025, with an effective tax rate of 27.2%. 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 tax benefit recorded in the three months ended July 31, 2026 in connection with the windfall from stock-based awards that vested during the three months ended July 31, 2026 was greater than the tax benefit recorded for the three months ended July 31, 2025 in connection with the windfall from stock-based awards that vested during the prior year quarter. The windfall is the amount by which our tax deduction for these awards, based on the fair market value of the awards on the date of vesting, is greater than the expense recorded in our condensed consolidated financial statements over the awards’ vesting period.

Net Income Attributable to Noncontrolling Interest

Net income attributable to noncontrolling interest represents the portion of a subsidiary’s net earnings that are attributable to shares of such subsidiary not held by Korn Ferry that are included in the condensed consolidated statements of income. Net income attributable to noncontrolling interest for the three months ended July 31, 2026 was $0.5 million, as compared to $0.8 million in the year-ago quarter.

Liquidity and Capital Resources

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

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 a maturity date of December 15, 2027 with interest payable semi-annually in arrears on June 15 and December 15 of each year, which 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. The Notes were 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). As of July 31, 2026, the fair value of the Notes was $397.0 million, which is based on borrowing rates currently required of notes with similar terms, maturity and credit risk. On August 6, 2026, we issued a conditional notice of redemption for the redemption of all of our outstanding Notes (the “Redemption”), which were issued pursuant to an indenture, dated as of December 16, 2019 (the “Indenture”), among the Company, the guarantors party thereto, and Computershare Trust Company, N.A., as successor to Wells Fargo Bank, National Association, as trustee.

On August 18, 2026, the condition to the Redemption was satisfied and we completed the Redemption of the entire outstanding principal amount of the Notes, or $400 million, in cash, at a redemption price equal to 100% of the outstanding principal amount of the Notes, together with accrued and unpaid interest up to but not including the redemption date.

On July 1, 2025, we entered into a Credit Agreement (the “Credit Agreement”) with Wells Fargo Bank, National Association as administrative agent and other lender parties thereto. The Credit Agreement provides for an $850.0 million five-year senior secured revolving credit facility (the “Facility”). The Credit Agreement also provides that, under certain circumstances, we may incur term loans or increase the aggregate principal amount of revolving commitments by an aggregate amount of up to $600.0 million plus an unlimited amount subject to a consolidated secured net leverage ratio of 3.25 to 1.00. The Credit Agreement replaced a previous credit agreement dated as of December 16, 2019 (as amended, amended and restated or otherwise modified, the “Prior Credit Agreement”) with Bank of America, National Association as administrative agent and other lenders party thereto. We repaid all outstanding obligations under the Prior Credit Agreement, and expenses and fees in connection therewith. See Note 11 — Long-Term Debt for a further description of the Credit Agreement. The Company had a total of $845.7 million available under the Facility as of both July 31, 2026 and April 30, 2026, after $4.3 million of standby letters of credit were issued as of both July 31, 2026 and April 30, 2026. The Company had a total of $14.4 million and $15.5 million of standby letters with other financial institutions as of July 31, 2026 and April 30, 2026, respectively. The standby letters of credit were generally issued as a result of entering into office premise leases.

On August 18, 2026 (the “Effective Date”), we entered into an amended and restated credit agreement (the “A&R Credit Agreement”) with Wells Fargo Bank, National Association as administrative agent, and other lenders party thereto, which amends and restates the Credit Agreement, among the Company, the lenders party thereto and Wells Fargo Bank, National Association as administrative agent. The A&R Credit Agreement amends and restates the Credit Agreement to, among other things (1) provide for a $600 million senior secured term loan facility (the “Term Loan Facility”), (2) continue the existing $850 million senior secured revolving credit facility (the “Revolving Credit Facility”), and (3) set the maturity of the Term Loan Facility and the Revolving Credit Facility to five years from the Effective Date. See Note 13 — Subsequent Events - Credit Facility for a further description of the A&R Credit Agreement.

In connection with entry into the A&R Credit Agreement, we borrowed the full principal amount of the Term Loan Facility on the Effective Date. The Term Loan Facility requires quarterly principal payments starting December 31, 2026 of $3.75 million, increasing to $7.5 million starting on December 31, 2028, with the remaining outstanding principal due on August 18, 2031. We used $406 million of the proceeds from the Term Loan Facility to redeem all of the outstanding Notes at a redemption price equal to 100% of the outstanding principal amount of the Notes, together with accrued and unpaid interest, and to pay fees, commission and expenses incurred in connection with the redemption of the Notes and the A&R Credit Agreement. We used the remaining $194 million of the proceeds from the Term Loan Facility and $440 million borrowed under the Revolving Credit Facility to fund a portion of the purchase price for the acquisition described in the following paragraph.

On September 1, 2026, we completed the acquisition of Auxey Holdco Limited (“AMS”) for $1.2 billion, consisting of $0.9 billion in cash (as consideration to the sellers, in repayment of AMS’s indebtedness, and in satisfaction of other AMS transaction obligations) and 3,118,628 shares of the Company’s common stock with a fair value of $0.3 billion. We used $0.3 billion from cash on hand and $0.6 billion borrowed under the A&R Credit Agreement for the acquisition. AMS is a UK-headquartered company that brings world-class capabilities in recruitment process outsourcing, early careers and campus recruiting, contingent workforce solutions, consulting and skills creation.

On December 8, 2014, the Board 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 increased the quarterly dividend to $0.12 per share and $0.15 per share, respectively. On June 26, 2023, the Board 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 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 approved an increase in the quarterly dividend to $0.37 per share. On March 10, 2025, the Board approved a further increase of 30% in the quarterly dividend, which increased the quarterly dividend to $0.48 per share. On March 5, 2026, the Board approved a 15% increase in the quarterly dividend, which increased the quarterly dividend to $0.55 per share. The A&R Credit Agreement permits us to pay dividends to our stockholders and make share repurchases so long as there is no default under the A&R Credit Agreement, our total funded debt to adjusted EBITDA ratio (as set forth in the A&R Credit Agreement, the “consolidated net leverage ratio”) is no greater than 5.00 to 1.00, and we are in pro forma compliance with our financial covenants that require the Company to maintain a consolidated secured net leverage ratio of not greater than 3.75 to 1.00 (which may be temporarily increased to 4.25 following certain material acquisitions under certain circumstances) (the "Financial Covenant"). The declaration and payment of future dividends under the quarterly dividend program will be at the discretion of the Board and will depend upon many factors, including our earnings, capital requirements, financial conditions, the terms of our indebtedness and other factors our Board may deem to be relevant. Our Board may, however, amend, revoke or suspend our dividend policy at any time and for any reason.

On September 18, 2025, our Board approved an increase to the share repurchase program of $250.0 million, which at the time brought our available capacity to repurchase shares in the open market or privately negotiated transactions to $331.4 million. The Company made no repurchases of the Company’s stock during the three months ended July 31, 2026. The Company repurchased approximately $9.9 million of the Company’s stock during the three months ended July 31, 2025. As of July 31, 2026, $227.7 million remained available for common stock repurchases under our share repurchase program. Any decision to continue to execute our currently outstanding share repurchase program will depend on our earnings, capital requirements, financial condition and other factors considered relevant by our Board.

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

Cash and cash equivalents and marketable securities were $1,051.1 million and $1,381.5 million as of July 31, 2026 and April 30, 2026, respectively. Net of amounts held in trust for deferred compensation plans and accrued bonuses, cash and cash equivalents and marketable securities were $689.7 million and $728.9 million at July 31, 2026 and April 30, 2026, respectively. As of July 31, 2026 and April 30, 2026, we held $453.5 million and $432.3 million, respectively, of cash and cash equivalents in foreign locations, net of amounts held in trust for deferred compensation plans and to pay accrued bonuses. Cash and cash equivalents consist of cash and highly liquid investments purchased with original maturities of three months or less. Marketable securities consist of mutual funds in both July 31, 2026 and April 30, 2026, and as of April 30, 2026 also include investments in commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities. The primary objectives of our investment in mutual funds are to meet the obligations under certain of our deferred compensation plans, while the commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities are available for general corporate purposes.

As of July 31, 2026 and April 30, 2026, marketable securities of $250.2 million and $286.0 million, respectively, included equity securities of $250.2 million (net of gross unrealized gains of $8.1 million and gross unrealized losses of $0.8 million) and $243.6 million (net of gross unrealized gains of $42.7 million and gross unrealized losses of $1.4 million), respectively, and were held in trust for settlement of our obligations under certain deferred compensation plans, of which $234.8 million and $230.2 million, respectively, are classified as non-current. These marketable securities were held to satisfy vested obligations totaling $235.2 million and $222.1 million as of July 31, 2026 and April 30, 2026, respectively. Unvested obligations under the deferred compensation plans totaled $18.6 million and $18.9 million as of July 31, 2026 and April 30, 2026, respectively.

Our working capital (current assets less current liabilities) was $947.8 million as of July 31, 2026 and $924.0 million as of April 30, 2026. The net increase in our working capital of $23.8 million as of July 31, 2026 compared to April 30, 2026 was primarily attributable to decreases in compensation and benefits payable and other accrued liabilities, as well as an increase in accounts receivable. These changes were partially offset by decreases in cash and cash equivalents and marketable securities. The decrease in compensation and benefits payable and cash and cash equivalents was primarily due to payments of annual bonuses earned in fiscal 2026 and paid during the first quarter of fiscal 2027. Other accrued liabilities decreased primarily due to a decrease in deferred revenue, while accounts receivable increased due to an increase in days of sales outstanding, which went from 54 days to 61 days (which is consistent with historical experience). Marketable securities decreased primarily due to liquidation of our marketable fixed income (debt) securities as of July 31, 2026. Cash used in operating activities was $247.6 million in the three months ended July 31, 2026 compared to $237.4 million in the year-ago quarter.

Cash provided by investing activities was $9.5 million in the three months ended July 31, 2026 compared to cash used in investing activities of $32.2 million in the year-ago quarter. The change from cash used in investing activities to cash provided by investing activities was primarily due to an increase of $36.8 million in proceeds received from sales/maturities of marketable securities net of purchases during the three months ended July 31, 2026 compared to the year-ago quarter and a decrease in the purchase of property and equipment of $4.7 million.

Cash used in financing activities was $52.5 million in the three months ended July 31, 2026 compared to $51.6 million in the three months ended July 31, 2025. Cash used in financing activities increased by $0.9 million primarily due to increases in payments of tax withholdings on restricted stock and dividends paid to stockholders of $6.2 million and $4.0 million, respectively, offset by a decrease in repurchases of common stock of $9.6 million.

Cash Surrender Value of Company-Owned Life Insurance Policies, Net of Loans

We purchased COLI policies or contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. As of July 31, 2026 and April 30, 2026, we held contracts with gross cash surrender value of $377.0 million and $361.2 million, respectively. Total outstanding borrowings against the cash surrender value (“CSV”) of COLI contracts were $72.1 million and $72.2 million as of July 31, 2026 and April 30, 2026, respectively. Such borrowings do not require annual principal repayments, bear interest primarily at variable rates and are secured by the CSV of COLI contracts. At July 31, 2026 and April 30, 2026, the net cash value of these policies was $304.9 million and $289.1 million, respectively.

Other than the factors discussed in this section, we are not aware of any other trends, demands or commitments that would materially affect liquidity or those that relate to our resources as of July 31, 2026.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements and have not entered into any transactions involving unconsolidated, special purpose entities. We had no material changes in contractual obligations as of July 31, 2026, as compared to those disclosed in our table of contractual obligations included in our Form 10-K.

Critical Accounting Policies

Preparation of this Quarterly Report on Form 10-Q requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates and assumptions and changes in the estimates are reported in current operations as new information is learned or upon the amounts becoming fixed or determinable. In preparing our interim condensed consolidated financial statements and accounting for the underlying transactions and balances, we apply our accounting policies as disclosed in the notes to our condensed consolidated financial statements and in the Form 10-K. There have been no material changes in our critical accounting policies since the end of fiscal 2026.

As a result of our global operating activities, we are exposed to certain market risks, including foreign currency exchange fluctuations and fluctuations in interest rates. We manage our exposure to these risks in the normal course of our business as described below.

Foreign Currency Risk

Substantially all our foreign subsidiaries’ operations are measured in their local currencies. Assets and liabilities are translated into U.S. dollars at the rates of exchange in effect at the end of each reporting period and revenue and expenses are translated at daily rates of exchange during the reporting period. Resulting translation adjustments are reported as a component of accumulated other comprehensive loss, net on our condensed consolidated balance sheets.

Transactions denominated in a currency other than the reporting entity’s functional currency may give rise to foreign currency gains or losses that impact our results of operations. Historically, we have not realized significant foreign currency gains or losses on such transactions. During both the three months ended July 31, 2026 and 2025, we recorded foreign currency losses of $0.9 million in general and administrative expenses in the condensed consolidated statements of income.

Our exposure to foreign currency exchange rates is primarily driven by fluctuations involving most major global currencies. Based on the ten largest exposure balances as of July 31, 2026, by notional value (including the U.S. Dollar, Canadian Dollar, Pound Sterling, Euro, Singapore Dollar), a 10% increase or decrease in the value of these currencies could result in a foreign exchange gain or loss of $15.8 million. We have a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures. These foreign currency forward contracts are neither used for trading purposes nor are they designated as hedging instruments pursuant to Accounting Standards Codification 815, Derivatives and Hedging.

Interest Rate Risk

Our exposure to interest rate risk is limited to our Facility, borrowings against the CSV of COLI contracts and to a lesser extent our fixed income debt securities. As of July 31, 2026, there were no amounts outstanding under the Facility. At our option, loans issued under the Credit Agreement bear interest at either Term Secured Overnight Financing Rate (“SOFR”) or an alternate base rate, in each case plus the applicable interest rate margin. The interest rate applicable to loans outstanding under the Credit Agreement may fluctuate between Term SOFR, plus 1.125% per annum to 2.00% per annum, in the case of Term SOFR borrowings (or between the alternate base rate plus 0.125% per annum and the alternate base rate plus 1.00% per annum, in the alternative), based upon our total funded debt to adjusted EBITDA ratio (as set forth in the Credit Agreement, the “consolidated net leverage ratio”) at such time. In addition, we are required to pay the lenders a quarterly commitment fee ranging from 0.175% to 0.300% per annum on the average daily unused amount of the Facility, based upon our consolidated net leverage ratio at such time, and fees relating to the issuance of letters of credit.

We had $72.1 million and $72.2 million of borrowings against the CSV of COLI contracts as of July 31, 2026 and April 30, 2026, respectively, bearing interest primarily at variable rates. We have sought to minimize the risk of fluctuations in these variable rates by the fact that we receive a corresponding adjustment to our borrowed funds crediting rate, which has the effect of increasing the CSV on our COLI contracts.

a) Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this Quarterly Report on Form 10-Q, management, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures and internal controls over financial reporting. Based on their evaluation of our disclosure controls and procedures conducted as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended (the “Exchange Act”)) were effective as of July 31, 2026.

b) Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting during the three months ended July 31, 2026 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

In our Form 10-K, we described the material factors, events, and uncertainties that make an investment in our securities risky. Those risk factors should be considered carefully, together with all other information in that Form 10-K and our subsequent filings with the SEC. It does not address all the risks that we face, and additional risks not presently known to us or that we currently deem immaterial may also arise and impair our business operations. As of the date of this report, there have been no material changes to the risk factors described in our Form 10-K.