Korn Ferry: Form 10-Q for the period ended Oct 31, 2025

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, 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, 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 expansion of social media platforms, the ability to effect acquisitions and integrate acquired businesses, 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, 2025 (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 performance. We help unlock the potential in people and unleash transformation across organizations—synchronizing strategy, operations, and talent to accelerate performance, fuel growth, and inspire a legacy of change. That’s why the world’s most admired companies across every major industry turn to us—for a shared commitment to lasting impact and the bold ambition to Be More Than.

As client needs have grown more complex, Korn Ferry has expanded its capabilities and become a comprehensive partner for talent and organizational performance. Today, we deliver a broad range of offerings across the talent lifecycle, combining deep expertise with scalable delivery models to meet the needs of organizations at every stage of growth. Our talent, industry expertise, global reach, and specialized solutions come together to solve our clients’ toughest performance challenges. We pair this with 10 billion data points, behavioral science, and powerful IP—our Foundational Assets. These assets support a broad set of Capabilities and power Integrated Solutions designed to keep pace with change.

Our Capabilities span the full talent lifecycle and are built on the strength of our Foundational Assets. Our Capabilities consist of the following:

• Organizational Strategy - Aligning people, processes, and structure to support business goals through organizational design, role clarity, and operating model optimization.
• Assessment & Succession - Evaluating individual potential and readiness to guide hiring, promotion, mobility and succession decisions.
• Talent Acquisition - Sourcing and hiring top talent across all levels via executive search, professional recruiting, interim talent, and Recruitment Process Outsourcing ("RPO").
• Leadership & Professional Development - Developing leaders and building critical skills through coaching, experimental learning programs, and scalable digital programs.
• Total Rewards - Designing compensation, benefits, and recognition programs that drive performance and reflect business priorities.
• Board and Chief Executive Officer ("CEO") Services - Advising boards and CEOs on leadership transitions, governance, and long-term planning.

Korn Ferry serves clients through a combination of strategic account partnerships and flexible engagement models designed to meet organizations where they are. At the center of this model 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 full portfolio—enabling consistent delivery, deep understanding of client priorities, and early access to new offerings. As of October 31, 2025, our 350 Marquee and Diamond accounts represented approximately 39% of consolidated fee revenue—more than double their contribution at the Program’s inception.

Korn Ferry delivers services through five Solution areas. The Solution areas reflect the breadth of our talent and organizational offerings and correspond to eight reportable segments supported by centralized functions that drive consistency, innovation, and scale. These segments represent how we currently organize and deliver our work to the market, enabling us to deliver specialized expertise at scale while remaining agile in response to evolving client needs and together, these areas comprise eight reportable segments. The five Solution areas are the following:

1. Consulting helps clients design and implement the talent strategies, organizational structures, and workforce capabilities and rewards to drive growth. Our consulting teams collaborate across Korn Ferry to deliver integrated solutions that support end-to-end transformation—from strategy through execution.

2. Digital leads the development, integration and commercialization of products in the Korn Ferry Talent Suite, as well as enabling technology across Korn Ferry's other Solution areas. Built on decades of proprietary data, IP, behavioral science, and talent intelligence, these tools empower data-driven decision-making and provide real-time access to benchmarks, assessments, talent development, rewards, and diagnostics across the talent lifecycle. They are leveraged in multiple ways: by consultants within service delivery, as embedded components of Integrated Solutions, or accessed directly by clients through subscription- and license-based models.

3. Executive Search delivers industry-leading executive recruitment across global markets, powered by decades of expertise and deep industry/sector specialization, and our own top-tier executive search professionals. We help organizations recruit board-level, C-suite, and senior executive talent, using proprietary assessments, leadership benchmarks, and deep functional insight to identify leaders who align with strategy, culture and long-term priorities. This solution is managed and reported on a geographic basis and represents four of the Company’s reportable segments (Executive Search North America, Executive Search Europe, Middle East and Africa ("EMEA"), Executive Search Asia Pacific ("APAC") and Executive Search Latin America).

4. Professional Search & Interim focuses on scalable, high impact recruiting and interim talent solutions at the professional level that offer flexibility and speed in dynamic business environments. We help clients rapidly place permanent professionals and senior/professional interim leaders across business-critical functions such as Finance and Accounting, IT, Human Resources, and Operations.

5. RPO provides high-volume, outsourced hiring solutions that deliver end-to-end talent acquisition services for enterprise clients. These programs are delivered through global Talent Delivery Centers, using a technology enabled platform and are designed and managed to align with each client’s business objectives, leveraging our IP, data, science, and deep talent expertise. Advanced technology and AI-driven tools are used to enhance the platform to drive scale, efficiency, and quality, while offering an engaging experience for candidates throughout the hiring process.

Q2 FY'26 Performance Highlights

• Fee revenue in Q2 FY'26 was $721.7 million, a year-over-year increase of 7%.
• Fee revenue grew 10% and 17% year-over-year in Executive Search and Professional Search & Interim, respectively.
• Net income attributable to Korn Ferry was $72.4 million, an increase of 19.0% year-over-year, with a margin of 10.0%, an increase of 100bps year-over-year.
• Adjusted EBITDA was $124.8 million, an increase of 7.0% year-over-year, with a margin of 17.3%, essentially flat year-over-year.
• Diluted earnings per share was $1.36 in Q2 FY'26, up 19% compared to the year-ago quarter.

The Company evaluates performance and allocates resources based on the chief operating decision maker’s review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset, gain on modification of office lease and other impairments charges). For the three months ended October 31, 2025, Adjusted EBITDA excluded $1.3 million of integration/acquisition costs and $13.9 million from a gain on modification of office lease. For the six months ended October 31, 2025, Adjusted EBITDA excluded $2.8 million of integration/acquisition costs and $13.9 million of gain on the modification of an office lease. For the three months ended October 31, 2024, Adjusted EBITDA excluded $0.6 million of restructuring charges, net, and $3.9 million of integration/acquisition costs. For the six months ended October 31, 2024, Adjusted EBITDA excluded $0.6 million of restructuring charges, net, and $5.0 million of integration/acquisition costs.

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

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)

The following tables summarize the results of our operations:

(Numbers may not total exactly due to rounding)

(dollars in thousands)

29

In the tables that follow, the Company presents a subtotal for Executive Search Adjusted EBITDA and a single percentage for Executive Search Adjusted EBITDA margin, which reflects the aggregate of all of the individual Executive Search Regions. These figures are non-GAAP financial measures and are presented as they are consistent with the Company’s Solution areas and are financial metrics used by the Company’s investor base.

(dollar in thousands)

(dollar in thousands)

30

(dollars in thousands)

31

(dollars in thousands)

Three Months Ended October 31, 2025 Compared to Three Months Ended October 31, 2024

Fee Revenue

Fee Revenue. Fee revenue was $721.7 million, an increase of $47.3 million, or 7%, in the three months ended October 31, 2025 compared to $674.4 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $5.1 million, or 1%, in the three months ended October 31, 2025 compared to the year-ago quarter. The increase in fee revenue was primarily due to higher fee revenues in Professional Search & Interim, Consulting, Executive Search North America and Executive Search EMEA.

Consulting. Consulting reported fee revenue of $172.8 million, an increase of $6.0 million, or 4%, in the three months ended October 31, 2025 compared to $166.8 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $1.3 million, or 1%, in the three months ended October 31, 2025 compared to the year-ago quarter. The increase in fee revenue was primarily driven by a 10% increase in average bill rates in the three months ended October 31, 2025 compared to the year-ago quarter.

Digital. Digital reported fee revenue of $91.0 million, a decrease of $1.9 million, or 2%, in the three months ended October 31, 2025, compared to $92.9 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $1.3 million, or 1%, in the three months ended October 31, 2025 compared to the year-ago quarter. The decrease in fee revenue was primarily driven by a decrease in demand for leadership and development offerings, partially offset by increases in demand for organizational strategy, total rewards and assessment & succession offerings.

Executive Search North America. Executive Search North America reported fee revenue of $142.1 million, an increase of $12.2 million, or 9%, in the three months ended October 31, 2025 compared to $129.9 million in the year-ago quarter. North America’s fee revenue increased primarily due to a 5% increase in the weighted-average fee billed per engagement (calculated using local currency) and a 4% increase in the number of engagements billed during the three months ended October 31, 2025 compared to the year-ago quarter.

Executive Search EMEA. Executive Search EMEA reported fee revenue of $51.9 million, an increase of $5.1 million, or 11%, in the three months ended October 31, 2025 compared to $46.8 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $1.9 million, or 4%, in the three months ended October 31, 2025 compared to the year-ago quarter. The increase in fee revenue was due to a 10% increase in the number of engagements billed, partially offset by a 3% decrease in weighted-average fee billed per engagement (calculated using local currency) during the three months ended October 31, 2025 compared to the year-ago quarter.

Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $24.1 million, an increase of $2.6 million, or 12%, in the three months ended October 31, 2025 compared to $21.5 million in the year-ago quarter. Exchange rates unfavorably impacted fee revenue by $0.4 million, or 2%, in the three months ended October 31, 2025 compared to the year-ago quarter. The increase in fee revenue was due to a 9% increase in the number of engagements billed and a 5% increase in weighted-average fee billed per engagement (calculated using local currency) during the three months ended October 31, 2025 compared to the year-ago quarter.

Executive Search Latin America. Executive Search Latin America reported fee revenue of $7.8 million in the three months ended October 31, 2025, essentially flat compared to $7.9 million in the year-ago quarter. Exchange rates favorably impacted fee revenue by $0.3 million, or 4%, in the three months ended October 31, 2025 compared to the year-ago quarter.

Professional Search & Interim. Professional Search & Interim reported fee revenue of $141.1 million, an increase of $20.0 million, or 17%, in the three months ended October 31, 2025 compared to $121.1 million in the year-ago quarter. The increase in fee revenue was primarily due to an increase in interim fee revenue of $16.6 million associated with the acquisition of Trilogy International effective November 1, 2024.

RPO. RPO reported fee revenue of $90.8 million in the three months ended October 31, 2025, an increase of $3.2 million, or 4%, in the three months ended October 31, 2025 compared to $87.6 million in the year-ago quarter. The increase in fee revenue was primarily due to new logo clients in North America.

Compensation and Benefits

Compensation and benefits expense increased by $24.6 million, or 6%, to $462.0 million in the three months ended October 31, 2025 from $437.4 million in the year-ago quarter. Exchange rates unfavorably impacted compensation and benefits expense by $3.8 million, or 1%, in the three months ended October 31, 2025 compared to the year-ago quarter. The increase in compensation and benefits expense was primarily due to an increase of $15.2 million in performance-related bonus expense due to a higher fee revenue in the three months ended October 31, 2025 compared to the year-ago quarter. Also contributing to the increase were higher salaries and related payroll taxes of $4.7 million, and an increase in deferred compensation expense of $3.5 million due to an increase in the fair value of participants' accounts in the three months ended October 31, 2025 compared to the year-ago quarter.

Consulting compensation and benefits expense increased by $4.7 million, or 4%, to $118.5 million in the three months ended October 31, 2025 from $113.8 million in the year-ago quarter. Exchange rates unfavorably impacted compensation and benefits expense by $1.2 million, or 1%, in the three months ended October 31, 2025 compared to the year-ago quarter. The increase in compensation and benefits expense was primarily due to an increase of $7.8 million in performance-related bonus expense, partially offset by lower salaries and related payroll taxes of $1.5 million and a decrease in severance-related expenses of $1.2 million in the three months ended October 31, 2025 compared to the year-ago quarter.

Digital compensation and benefits expense decreased by $0.5 million, or 1%, to $45.1 million in the three months ended October 31, 2025 compared to $45.6 million in the year-ago quarter.

Executive Search North America compensation and benefits expense increased by $9.9 million, or 11%, to $96.7 million in the three months ended October 31, 2025 compared to $86.8 million in the year-ago quarter. Compensation and benefits expense increased primarily due to an increase in performance-related bonus expense of $8.3 million and an increase in deferred compensation expense of $2.0 million due to an increase in the fair value of participants' accounts in the three months ended October 31, 2025 compared to the year-ago quarter.

Executive Search EMEA compensation and benefits expense increased by $3.6 million, or 10%, to $38.7 million in the three months ended October 31, 2025 compared to $35.1 million in the year-ago quarter. Exchange rates unfavorably impacted compensation and benefits expense by $1.5 million, or 4%, in the three months ended October 31, 2025 compared to the year-ago quarter. The increase in compensation and benefits expense was primarily due to an increase of $3.0 million in performance-related bonus expense in the three months ended October 31, 2025 compared to the year-ago quarter.

Executive Search Asia Pacific compensation and benefits expense increased by $0.8 million, or 5%, to $16.5 million in the three months ended October 31, 2025 compared to $15.7 million in the year-ago quarter.

Executive Search Latin America compensation and benefits expense increased by $0.4 million, or 8%, to $5.2 million in the three months ended October 31, 2025 compared to $4.8 million in the year-ago quarter.

Professional Search & Interim compensation and benefits expense increased by $2.3 million, or 5%, to $52.1 million in the three months ended October 31, 2025 from $49.8 million in the year-ago quarter. The increase in compensation and benefits expense was primarily due to higher salaries and related payroll taxes of $2.6 million in the three months ended October 31, 2025 compared to the year-ago quarter. Additionally, there were increases of $1.3 million and $1.1 million in severance-related expenses and commission expense, respectively. These increases were partially offset by a decrease of $3.3 million in performance-related bonus expense in the three months ended October 31, 2025 compared to the year-ago quarter.

RPO compensation and benefits expense increased by $0.7 million, or 1%, to $68.4 million in the three months ended October 31, 2025 compared to $67.7 million in the year-ago quarter.

Corporate compensation and benefits expense increased by $2.5 million, or 14%, to $20.7 million in the three months ended October 31, 2025 from $18.2 million in the year-ago quarter. The increase was primarily due to increases of $1.1 million, $0.4 million, and $0.2 million in restricted stock compensation expense, salaries and related payroll taxes, and severance-related expenses, respectively, in the three months ended October 31, 2025 compared to the year-ago quarter.

General and Administrative Expenses

General and administrative expenses decreased by $14.2 million, or 22%, to $50.3 million in the three months ended October 31, 2025 from $64.5 million in the year-ago quarter. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $13.9 million in the three months ended October 31, 2025 compared to the year-ago quarter.

Consulting general and administrative expenses decreased by $4.3 million, or 32%, to $9.2 million in the three months ended October 31, 2025 compared to $13.5 million in the year-ago quarter. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $4.1 million in the three months ended October 31, 2025 compared to the year-ago quarter.

Digital general and administrative expenses decreased by $2.0 million, or 19%, to $8.4 million in the three months ended October 31, 2025 from $10.4 million in the year-ago quarter. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $2.0 million in the three months ended October 31, 2025 compared to the year-ago quarter.

Executive Search North America general and administrative expenses decreased by $1.2 million, or 14%, to $7.1 million in the three months ended October 31, 2025 compared to $8.3 million in the year-ago quarter. The decrease in general and administrative expenses was primarily due to decreases of $0.7 million and $0.4 million in legal and other professional fees, and premise and office expense, respectively, in the three months ended October 31, 2025 compared to the year-ago quarter.

Executive Search EMEA general and administrative expenses decreased by $3.5 million, or 83%, to $0.7 million in the three months ended October 31, 2025 compared to $4.2 million in the year-ago quarter. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $3.7 million in the three months ended October 31, 2025 compared to the year-ago quarter.

Executive Search Asia Pacific general and administrative expenses increased by $0.8 million, or 57%, to $2.2 million in the three months ended October 31, 2025 compared to $1.4 million in the year-ago quarter.

Executive Search Latin America general and administrative expenses were $0.9 million in the three months ended October 31, 2025 compared to $0.7 million in the year-ago quarter.

Professional Search & Interim general and administrative expenses decreased by $2.0 million, or 49%, to $2.1 million in the three months ended October 31, 2025 compared to $4.1 million in the year-ago quarter. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $2.6 million, partially offset by an increase of $0.3 million in bad debt expense in the three months ended October 31, 2025 compared to the year-ago quarter.

RPO general and administrative expenses decreased by $1.2 million, or 27%, to $3.3 million in the three months ended October 31, 2025 compared to $4.5 million in the year-ago quarter. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $1.5 million in the three months ended October 31, 2025 compared to the year-ago quarter.

Corporate general and administrative expenses decreased by $1.2 million, or 7%, to $16.2 million in the three months ended October 31, 2025 compared to $17.4 million in the year-ago quarter. The decrease in general and administrative expenses was primarily due to a decrease in integration and acquisition cost of $2.5 million, partially offset by the impact of foreign currency, with a foreign currency loss of $0.5 million in the three months ended October 31, 2025 compared to a foreign currency gain of $0.2 million in the year-ago quarter. Further offsetting the decrease were increases in marketing and business development expenses of $0.6 million in the three months ended October 31, 2025 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 Consulting, Digital, Professional Search & Interim and RPO. Cost of services expense increased by $14.4 million, or 22%, to $79.1 million in the three months ended October 31, 2025 compared to $64.7 million in the year-ago quarter. Professional Search & Interim accounted for $14.0 million of the increase due to an increase in fee revenue in the segment as a significant amount of interim services they perform have a higher cost of service expense as compared to the Company's other segments.

Depreciation and Amortization Expenses

Depreciation and amortization expenses increased by $11.9 million, or 60%, to $31.6 million in the three months ended October 31, 2025 compared to $19.7 million in the year-ago quarter. The increase was primarily due to the accelerated depreciation associated with the decision to sunset our Digital platform with the replacement of our Korn Ferry Talent Suite, which was introduced in the third quarter of fiscal 2026.

Restructuring Charges, Net

During the second quarter of fiscal 2024, we implemented a restructuring plan to eliminate excess capacity resulting from a challenging macroeconomic business environment impacting demand. During the three months ended October 31, 2024, we recorded an adjustment to the previously recorded restructuring accruals of $0.6 million. There were no restructuring charges during the three months ended October 31, 2025.

Net Income Attributable to Korn Ferry

Net income attributable to Korn Ferry increased by $11.6 million, or 19%, to $72.4 million in the three months ended October 31, 2025 as compared to $60.8 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 $47.3 million and a $13.9 million gain from the modification of an office lease recorded during the three months ended October 31, 2025, partially offset by increases in compensation and benefits expense of $24.6 million, cost of services expense of $14.4 million, and depreciation and amortization expenses of $11.9 million in the three months ended October 31, 2025 compared to the year-ago quarter. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 10% and 9% in the three months ended October 31, 2025 and 2024, respectively.

Adjusted EBITDA

Adjusted EBITDA increased by $7.8 million, or 7%, to $124.8 million in the three months ended October 31, 2025 as compared to $117.0 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. Adjusted EBITDA, as a percentage of fee revenue, was 17% in both the three months ended October 31, 2025 and 2024.

Consulting Adjusted EBITDA was $30.3 million in the three months ended October 31, 2025, an increase of $1.2 million, or 4%, compared to $29.1 million in the year-ago quarter. The increase in Adjusted EBITDA was driven by an increase in fee revenue, partially offset by an increase in compensation and benefits expense. Consulting Adjusted EBITDA, as a percentage of fee revenue, was 18% and 17% in the three months ended October 31, 2025 and 2024, respectively.

Digital Adjusted EBITDA was $28.7 million in the three months ended October 31, 2025, a decrease of $0.5 million, or 2%, compared to $29.2 million in the year-ago quarter. Digital Adjusted EBITDA, as a percentage of fee revenue, was 32% and 31% in the three months ended October 31, 2025 and 2024, respectively.

Executive Search North America Adjusted EBITDA increased by $5.1 million, or 14%, to $42.0 million in the three months ended October 31, 2025 compared to $36.9 million in the year-ago quarter. The increase was mainly driven by higher fee revenue in the segment and a decrease in general and administrative expenses, partially offset by an increase in compensation and benefits expense. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 30% and 28% in the three months ended October 31, 2025 and 2024, respectively.

Executive Search EMEA Adjusted EBITDA increased by $1.3 million, or 17%, to $8.8 million in the three months ended October 31, 2025 compared to $7.5 million in the year-ago quarter. The increase was mainly driven by higher fee revenue in the segment, partially offset by an increase in compensation and benefits expense. Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, was 17% and 16% in the three months ended October 31, 2025 and 2024, respectively.

Executive Search Asia Pacific Adjusted EBITDA increased by $0.9 million, or 20%, to $5.3 million in the three months ended October 31, 2025 compared to $4.4 million in the year-ago quarter. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 22% and 21% in the three months ended October 31, 2025 and 2024, respectively.

Executive Search Latin America Adjusted EBITDA decreased by $0.9 million, or 35%, to $1.7 million in the three months ended October 31, 2025 compared to $2.6 million in the year-ago quarter. Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, was 22% and 32% in the three months ended October 31, 2025 and 2024, respectively.

Professional Search & Interim Adjusted EBITDA was $30.2 million in the three months ended October 31, 2025, an increase of $3.0 million, or 11%, compared to $27.2 million in the year-ago quarter. The increase in Adjusted EBITDA was mainly driven by higher fee revenue, partially offset by increases in cost of services expense and compensation and benefits expense (excluding integration/acquisition costs). Professional Search & Interim Adjusted EBITDA, as a percentage of fee revenue, was 21% and 22% in the three months ended October 31, 2025 and 2024, respectively.

RPO Adjusted EBITDA was $14.2 million in the three months ended October 31, 2025, an increase of $1.3 million, or 10%, as compared to $12.9 million in the year-ago quarter. The increase in Adjusted EBITDA was mainly driven by higher fee revenue, partially offset by an increase in cost of services expense and compensation and benefits expense. RPO Adjusted EBITDA, as a percentage of fee revenue, was 16% and 15% in the three months ended October 31, 2025 and 2024, respectively.

Other Income, Net

Other income, net was $7.1 million in the three months ended October 31, 2025 compared to $5.4 million in the year-ago quarter. The difference was primarily due to an increase in the gains generated from the increased 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 (collectively, "ECAP") during the three months ended October 31, 2025 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 ("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 $5.8 million in the three months ended October 31, 2025 compared to $5.6 million in the year-ago quarter.

Income Tax Provision

The provision for income tax was $26.6 million in the three months ended October 31, 2025, with an effective tax rate of 26.6%, compared to $24.9 million in the three months ended October 31, 2024, with an effective rate of 28.5%. Our effective tax rate is primarily impacted by U.S. state income taxes and jurisdictional mix of earnings, which generally create variability in the effective tax rate over time.

On July 4, 2025, House Resolution 1, commonly referred to as the One Big Beautiful Bill Act (the "Act") was enacted into law. Key provisions of the Act include the extension and modification of certain provisions of the Tax Cuts and Jobs Act of 2017, changes to bonus depreciation, adjustments to business interest expense limitations, and modifications to the treatment of research and development expenditures. The Act has multiple effective dates, with certain provisions effective in our fiscal 2026 and others becoming effective in fiscal 2027. In accordance with Accounting Standards Codification ("ASC") 740, the effect of changes in tax rates and laws on deferred tax balances are recognized in the period when the legislation is enacted. We have reflected the effect on the Act within the provision for income taxes and the deferred tax balances as of October 31, 2025. The Act did not materially impact the Company's effective tax rate.

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 October 31, 2025 was $1.0 million, compared to $1.5 million in the three months ended October 31, 2024.

Six Months Ended October 31, 2025 Compared to Six Months Ended October 31, 2024

Fee Revenue

Fee Revenue. Fee revenue was $1,430.3 million, an increase of $81.0 million, or 6%, in the six months ended October 31, 2025 compared to $1,349.3 million in the year-ago period. Exchange rates favorably impacted fee revenue by $14.2 million, or 1%, in the six months ended October 31, 2025 compared to the year-ago period. The increase in fee revenue was primarily due to higher fee revenues in Professional Search & Interim, Executive Search North America, Executive Search EMEA and Consulting.

Consulting. Consulting reported fee revenue of $342.8 million, an increase of $8.2 million, or 2%, in the six months ended October 31, 2025 compared to $334.6 million in the year-ago period. Exchange rates favorably impacted fee revenue by $4.2 million, or 1%, in the six months ended October 31, 2025 compared to the year-ago period. The increase in fee revenue was primarily driven by a 9% increase in average bill rates in the six months ended October 31, 2025 compared to the year-ago period.

Digital. Digital reported fee revenue of $180.2 million, a decrease of $0.9 million, in the six months ended October 31, 2025 compared to $181.1 million in the year-ago period. Exchange rates favorably impacted fee revenue by $2.9 million, or 2%, in the six months ended October 31, 2025 compared to the year-ago period. The decrease in fee revenue was primarily driven by a decrease in demand for leadership and development offerings, partially offset by increases in demand for organizational strategy and assessment & succession offerings.

Executive Search North America. Executive Search North America reported fee revenue of $281.8 million, an increase of $17.2 million, or 7%, in the six months ended October 31, 2025 compared to $264.6 million in the year-ago period. North America’s fee revenue increased primarily due to a 4% increase in the weighted-average fee billed per engagement (calculated using local currency) and a 3% increase in the number of engagements billed during the six months ended October 31, 2025 compared to the year-ago period.

Executive Search EMEA. Executive Search EMEA reported fee revenue of $105.7 million, an increase of $12.9 million, or 14%, in the six months ended October 31, 2025 compared to $92.8 million in the year-ago period. Exchange rates favorably impacted fee revenue by $4.4 million, or 5%, in the six months ended October 31, 2025 compared to the year-ago period. The increase in fee revenue was primarily due to an 11% increase in the number of engagements billed, partially offset by a 2% decrease in weighted-average fee billed per engagement (calculated using local currency) during the six months ended October 31, 2025 compared to the year-ago period.

Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $48.8 million, an increase of $6.8 million, or 16%, in the six months ended October 31, 2025 compared to $42.0 million in the year-ago period. The increase in fee revenue was primarily due to a 13% increase in the number of engagements billed and a 3% increase in weighted-average fee billed per engagement (calculated using local currency) during the six months ended October 31, 2025 compared to the year-ago period.

Executive Search Latin America. Executive Search Latin America reported fee revenue of $13.9 million, a decrease of $1.3 million, or 9%, in the six months ended October 31, 2025 compared to $15.2 million in the year-ago period. The decrease in fee revenue was primarily due to a 4% decrease in weighted-average fee billed per engagement (calculated using local currency) and a 4% decrease in the number of engagements billed during the six months ended October 31, 2025 compared to the year-ago period.

Professional Search & Interim. Professional Search & Interim reported fee revenue of $275.0 million, an increase of $32.2 million, or 13%, in the six months ended October 31, 2025 compared to $242.8 million in the year-ago period. The increase in fee revenue was primarily due to an increase in interim fee revenue of $26.3 million associated with the acquisition of Trilogy International effective November 1, 2024.

RPO. RPO reported fee revenue of $182.1 million, an increase of $6.0 million, or 3%, in the six months ended October 31, 2025 compared to $176.1 million in the year-ago period. Exchange rates favorably impacted fee revenue by $2.2 million, or 1%, in the six months ended October 31, 2025 compared to the year-ago period. The increase in fee revenue was primarily due to new logo clients in North America.

Compensation and Benefits

Compensation and benefits expense increased by $34.2 million, or 4%, to $923.4 million in the six months ended October 31, 2025 from $889.2 million in the year-ago period. Exchange rates unfavorably impacted compensation and benefits by $10.5 million, or 1%, in the six months ended October 31, 2025 compared to the year-ago period. The increase in compensation and benefits expense was primarily due to an increase in salaries and related payroll taxes of $13.3 million in the six months ended October 31, 2025 compared to the year-ago period. Also contributing to the increase were higher severance-related expenses, deferred compensation expense, amortization of long-term awards and commission expense of $12.2 million, $3.5 million, $2.9 million and $2.6 million, respectively, in the six months ended October 31, 2025 compared to the year-ago period.

Consulting compensation and benefits expense increased by $7.3 million, or 3%, to $235.7 million in the six months ended October 31, 2025 from $228.4 million in the year-ago period. Exchange rates unfavorably impacted compensation and benefits by $3.5 million, or 2%, in the six months ended October 31, 2025 compared to the year-ago period. The increase in compensation and benefits expense was primarily due to an increase of $4.2 million in severance-related costs, higher performance-related bonus expense of $3.8 million and an increase in deferred compensation expense of $1.0 million in the six months ended October 31, 2025 compared to the year-ago period. The increase was partially offset by a decrease of $2.3 million in salaries and related payroll taxes in the six months ended October 31, 2025 compared to the year-ago period.

Digital compensation and benefits expense decreased by $1.3 million, or 1%, to $89.6 million in the six months ended October 31, 2025 from $90.9 million in the year-ago period. Exchange rates unfavorably impacted compensation and benefits by $1.4 million, or 2%, in the six months ended October 31, 2025 compared to the year-ago period. The decrease in compensation and benefits expense was primarily due to a decrease in performance-related bonus expense of $7.6 million. The decrease was partially offset by increases in severance-related expenses, salaries and related payroll taxes and commission expense of $2.6 million, $2.0 million and $0.9 million, respectively, in the six months ended October 31, 2025 compared to the year-ago period.

Executive Search North America compensation and benefits expense increased by $8.2 million, or 4%, to $196.2 million in the six months ended October 31, 2025 compared to $188.0 million in the year-ago period. Compensation and benefits expense increased primarily due to an increase in performance-related bonus expense of $5.7 million, coupled with an increase of $1.3 million in deferred compensation expense in the six months ended October 31, 2025 compared to the year-ago period.

Executive Search EMEA compensation and benefits expense increased by $9.2 million, or 13%, to $78.9 million in the six months ended October 31, 2025 compared to $69.7 million in the year-ago period. Exchange rates unfavorably impacted compensation and benefits by $3.5 million, or 5%, in the six months ended October 31, 2025 compared to the year-ago period. Compensation and benefits expense increased primarily due to an increase in performance-related bonus expense of $4.9 million, coupled with an increase of $4.1 million in salaries and related payroll taxes in the six months ended October 31, 2025 compared to the year-ago period.

Executive Search Asia Pacific compensation and benefits expense increased by $3.6 million, or 12%, to $33.7 million in the six months ended October 31, 2025 compared to $30.1 million in the year-ago period. The increase in compensation and benefits expense was primarily due to an increase in performance-related bonus expense of $3.7 million in the six months ended October 31, 2025 compared to the year-ago period.

Executive Search Latin America compensation and benefits expense was $9.0 million in the six months ended October 31, 2025, essentially flat compared to $9.2 million in the year-ago period.

Professional Search & Interim compensation and benefits expense increased by $3.2 million, or 3%, to $102.2 million in the six months ended October 31, 2025 from $99.0 million in the year-ago period. The increase in compensation and benefits expense was primarily due to an increase in salaries and related payroll taxes of $5.3 million in the six months ended October 31, 2025 compared to the year-ago period. Also contributing to the increase were higher severance-related expenses, commission expense and deferred compensation expense of $3.0 million, $1.7 million and $0.5 million, respectively. These increases were partially offset by a decrease of $8.3 million in performance-related bonus expense in the six months ended October 31, 2025 compared to the year-ago period.

RPO compensation and benefits expense increased by $1.4 million, or 1%, to $137.7 million in the six months ended October 31, 2025 from $136.3 million in the year-ago period. Exchange rates unfavorably impacted compensation and benefits by $1.7 million, or 1%, in the six months ended October 31, 2025 compared to the year-ago period. The increase in compensation and benefits expense was primarily due to an increase in severance-related expenses, salaries and related payroll taxes and the use of outside contractors of $2.4 million, $2.1 million and $1.6 million. respectively. These increases were partially offset by a decrease of $4.7 million in performance-related bonus expense in the six months ended October 31, 2025 compared to the year-ago period.

Corporate compensation and benefits expense increased by $2.9 million, or 8%, to $40.5 million in the six months ended October 31, 2025 from $37.6 million in the year-ago period. The increase was primarily due to increases of $1.7 million in restricted stock compensation expense and $0.7 million in salaries and related payroll taxes in the six months ended October 31, 2025 compared to the year-ago period.

General and Administrative Expenses

General and administrative expenses decreased by $10.4 million, or 8%, to $114.1 million in the six months ended October 31, 2025 from $124.5 million in the year-ago period. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $13.9 million in the six months ended October 31, 2025 compared to the year-ago period. Further contributing to the decrease was lower integration and acquisition cost of $2.6 million in the six months ended October 31, 2025 compared to the year-ago period. The decrease was partially offset by increases in computer software licenses of $2.3 million and legal and other professional fees of $2.0 million in the six months ended October 31, 2025 compared to the year-ago period.

Consulting general and administrative expenses decreased by $4.2 million, or 16%, to $22.2 million in the six months ended October 31, 2025 compared to $26.4 million in the year-ago period. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $4.1 million in the six months ended October 31, 2025 compared to the year-ago period.

Digital general and administrative expenses decreased by $1.1 million, or 6%, to $18.4 million in the six months ended October 31, 2025 from $19.5 million in the year-ago period. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $2.0 million, partially offset by an increase in computer software licenses of $1.1 million in the six months ended October 31, 2025 compared to the year-ago period.

Executive Search North America general and administrative expenses decreased by $1.8 million, or 11%, to $14.1 million in the six months ended October 31, 2025 compared to $15.9 million in the year-ago period. The decrease in general and administrative expenses was primarily due to decreases in legal and other professional fees of $1.2 million and premise and office expense of $0.6 million in the six months ended October 31, 2025 compared to the year-ago period.

Executive Search EMEA general and administrative expenses decreased by $3.2 million, or 39%, to $5.1 million in the six months ended October 31, 2025 from $8.3 million in the year-ago period. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $3.7 million in the six months ended October 31, 2025.

Executive Search Asia Pacific general and administrative expenses increased by $0.7 million, or 19%, to $4.3 million in the six months ended October 31, 2025 compared to $3.6 million in the year-ago period.

Executive Search Latin America general and administrative expenses increased by $1.1 million, or 138%, to $1.9 million in the six months ended October 31, 2025 compared to $0.8 million in the year-ago period. The increase in general and administrative expenses was primarily due to the impact of foreign currency, with a foreign currency loss of $0.2 million in the six months ended October 31, 2025 compared to a foreign currency gain of $1.0 million in the year-ago period.

Professional Search & Interim general and administrative expenses decreased by $2.0 million, or 22%, to $7.3 million in the six months ended October 31, 2025 compared to $9.3 million in the year-ago period. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $2.6 million in the six months ended October 31, 2025 compared to the year-ago period. The decrease was partially offset by an increase in legal and other professional fees of $0.3 million in the six months ended October 31, 2025 compared to the year-ago period.

RPO general and administrative expenses decreased by $1.4 million, or 15%, to $7.8 million in the six months ended October 31, 2025 compared to $9.2 million in the year-ago period. The decrease in general and administrative expenses was primarily due to a gain from the modification of an office lease of $1.5 million in the six months ended October 31, 2025 compared to the year-ago period.

Corporate general and administrative expenses increased by $1.6 million, or 5%, to $33.1 million in the six months ended October 31, 2025 compared to $31.5 million in the year-ago period. The increase in general and administrative expenses was primarily due to increases in legal and other professional fees of $3.0 million and marketing and business development expenses of $1.0 million in the six months ended October 31, 2025 compared to the year-ago period. These increases were partially offset by a decrease in integration and acquisition cost of $2.5 million.

Cost of Services Expense

Cost of services expense consists of contractor and product costs related to delivery of various services and products through Consulting, Digital, Professional Search & Interim and RPO. Cost of services expense increased by $24.1 million, or 18%, to $156.3 million in the six months ended October 31, 2025 compared to $132.2 million in the year-ago period. Professional Search & Interim accounted for $23.4 million of the increase due to an increase in fee revenue in the segment as a significant amount of interim services they perform have a higher cost of service expense as compared to the Company's other segments.

Depreciation and Amortization Expenses

Depreciation and amortization expenses were $54.3 million, an increase of $15.0 million, or 38%, in the six months ended October 31, 2025 compared to $39.3 million in the year-ago period. The increase was primarily due to the accelerated depreciation associated with the decision to sunset our Digital platform with the replacement of our Korn Ferry Talent Suite, which was introduced in the third quarter of fiscal 2026.

Restructuring Charges, Net

During the second quarter of fiscal 2024, we implemented a plan intended to eliminate excess capacity resulting from a challenging macroeconomic business environment impacting demand. During the six months ended October 31, 2024, we recorded an adjustment to the previously recorded restructuring accruals of $0.6 million. There were no restructuring charges during the six months ended October 31, 2025.

Net Income Attributable to Korn Ferry

Net income attributable to Korn Ferry increased by $15.6 million, or 13%, to $139.0 million in the six months ended October 31, 2025 compared to $123.4 million in the year-ago period. The increase in net income attributable to Korn Ferry was primarily due to an increase in fee revenue of $81.0 million and a decrease in general and administrative expenses of $10.4 million, partially offset by increases in compensation and benefits expense of $34.2 million, cost of services expense of $24.1 million, and depreciation and amortization expenses of $15.0 million in the six months ended October 31, 2025 compared to the year-ago period. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 10% and 9% in the six months ended October 31, 2025 and 2024, respectively.

Adjusted EBITDA

Adjusted EBITDA was $245.2 million in the six months ended October 31, 2025, an increase of $17.0 million, or 7%, as compared to $228.2 million in the year-ago period. The increase in Adjusted EBITDA was driven by an increase in fee revenue, partially offset by increases in compensation and benefit expense (excluding integration/acquisition costs), cost of services expense and general and administrative expenses (excluding gain from the modification of an office lease and integration/acquisition costs). Adjusted EBITDA, as a percentage of fee revenue, was 17% in both the six months ended October 31, 2025 and 2024.

Consulting Adjusted EBITDA was $59.1 million in the six months ended October 31, 2025, an increase of $0.7 million, or 1%, as compared to $58.4 million in the year-ago period. Consulting Adjusted EBITDA, as a percentage of fee revenue, was 17% in both the six months ended October 31, 2025 and 2024.

Digital Adjusted EBITDA was $56.3 million in the six months ended October 31, 2025, an increase of $0.5 million, or 1%, as compared to $55.8 million in the year-ago period. Digital Adjusted EBITDA, as a percentage of fee revenue, was 31% in both the six months ended October 31, 2025 and 2024.

Executive Search North America Adjusted EBITDA increased by $11.2 million, or 16%, to $83.2 million in the six months ended October 31, 2025 compared to $72.0 million in the year-ago period. The increase in Adjusted EBITDA was primarily driven by an increase in fee revenue and a decrease in general and administrative expenses, partially offset by an increase in compensation and benefits expense in the six months ended October 31, 2025 compared to the year-ago period. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 30% in the six months ended October 31, 2025 as compared to 27% in the six months ended October 31, 2024.

Executive Search EMEA Adjusted EBITDA increased by $3.1 million, or 21%, to $17.9 million in the six months ended October 31, 2025 compared to $14.8 million in the year-ago period. The increase in Adjusted EBITDA was primarily driven by an increase in fee revenue, partially offset by an increase in compensation and benefits expense in the six months ended October 31, 2025 compared to the year-ago period. Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, was 17% in the six months ended October 31, 2025 as compared to 16% in the six months ended October 31, 2024.

Executive Search Asia Pacific Adjusted EBITDA increased by $2.2 million, or 25%, to $10.9 million in the six months ended October 31, 2025 compared to $8.7 million in the year-ago period. The increase in Adjusted EBITDA was primarily driven by an increase in fee revenue, partially offset by an increase in compensation and benefits expense in the six months ended October 31, 2025 compared to the year-ago period. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 22% in the six months ended October 31, 2025 as compared to 21% in the six months ended October 31, 2024.

Executive Search Latin America Adjusted EBITDA decreased by $2.1 million, or 39%, to $3.3 million in the six months ended October 31, 2025 compared to $5.4 million in the year-ago period. The decrease in Adjusted EBITDA was primarily driven by a decrease in fee revenue, coupled with an increase in general and administrative expenses in the six months ended October 31, 2025 compared to the year-ago period. Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, was 23% in the six months ended October 31, 2025 as compared to 35% in the six months ended October 31, 2024.

Professional Search & Interim Adjusted EBITDA was $58.2 million in the six months ended October 31, 2025, an increase of $5.3 million, or 10%, as compared to $52.9 million in the year-ago period. The increase in Adjusted EBITDA was driven by an increase in fee revenue, partially offset by increases in cost of services expense and compensation and benefit expense (excluding integration/acquisition costs). Professional Search & Interim Adjusted EBITDA, as a percentage of fee revenue, was 21% in the six months ended October 31, 2025 compared to 22% in the year-ago period.

RPO Adjusted EBITDA was $28.6 million in the six months ended October 31, 2025, an increase of $3.2 million, or 13%, as compared to $25.4 million in the year-ago period. The increase in Adjusted EBITDA was primarily driven by an increase in fee revenue, partially offset by increases in compensation and benefits expense and cost of services expense in the six months ended October 31, 2025 compared to the year-ago period. RPO Adjusted EBITDA, as a percentage of fee revenue, was 16% in the six months ended October 31, 2025 compared to 14% in the year-ago period.

Other Income, Net

Other income, net was $19.8 million in the six months ended October 31, 2025 compared to $19.9 million in the year-ago period. Other Income, net primarily includes gains generated from the increased fair value of our marketable securities that are held in trust for the settlement of the Company's obligation under the ECAP.

Interest Expense, Net

Interest expense, net primarily relates to the Company's Notes issued in December 2019, borrowings under 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 $9.3 million in the six months ended October 31, 2025 compared to $9.6 million in the year-ago period.

Income Tax Provision

The provision for income tax was $51.9 million in the six months ended October 31, 2025, with an effective tax rate of 26.9%, compared to $47.3 million in the six months ended October 31, 2024, with an effective rate of 27.2%. Our effective tax rate is primarily impacted by U.S. state income taxes and jurisdictional mix of earnings, which generally create variability in the effective tax rate over time.

On July 4, 2025, the Act was enacted into law. Key provisions of the Act include the extension and modification of certain provisions of the Tax Cuts and Jobs Act of 2017, changes to bonus depreciation, adjustments to business interest expense limitations, and modifications to the treatment of research and development expenditures. The Act has multiple effective dates, with certain provisions effective in the our fiscal 2026 and others becoming effective in fiscal 2027. In accordance with ASC 740, the effect of changes in tax rates and laws on deferred tax balances are recognized in the period when the legislation is enacted. We have reflected the effect on the Act within the provision for income taxes and the deferred tax balances as of October 31, 2025. The Act did not materially impact our effective tax rate.

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 six months ended October 31, 2025 was $1.8 million, compared to $3.2 million in the six months ended October 31, 2024.

Liquidity and Capital Resources

The Company and its Board of Directors 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 Credit Agreement (defined below) and Notes, as well as using excess cash to repay the Notes.

On December 16, 2019, we completed a private placement of the Notes with a $400.0 million principal amount pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes were issued with a $4.5 million discount and will mature December 15, 2027, with interest payable semi-annually in arrears on June 15 and December 15 of each year, that commenced on June 15, 2020. The Notes represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness. We may redeem the Notes prior to maturity, subject to certain limitations and premiums defined in the indenture governing the Notes. The Notes are guaranteed by each of our existing and future wholly owned domestic subsidiaries to the extent such subsidiaries guarantee our obligations under the Credit Agreement (defined below). The indenture governing the Notes requires that, upon the occurrence of both a Change of Control and a Rating Decline (each as defined in the indenture), we shall make an offer to purchase all of the Notes at 101% of their principal amount, and accrued and unpaid interest. As of October 31, 2025, 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 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 $845.6 million available under the Facility and $645.6 million available under the Prior Credit Agreement as of October 31, 2025 and April 30, 2025, respectively, after $4.4 million of standby letters of credit were issued as of both October 31, 2025 and April 30, 2025, respectively. The Company had a total of $13.9 million and $13.1 million of standby letters with other financial institutions as of October 31, 2025 and April 30, 2025, respectively. The standby letters of credit were generally issued as a result of entering into office premise leases.

On December 8, 2014, the Board of Directors adopted a dividend policy to distribute to our stockholders a regular quarterly cash dividend of $0.10 per share. Every quarter since the adoption of the dividend policy, the Company has declared a quarterly dividend. On June 21, 2021 and 2022, the Board of Directors increased the quarterly dividend to $0.12 per share and $0.15 per share, respectively. On June 26, 2023, the Board of Directors approved an increase of 20% in the quarterly dividend, which increased the quarterly dividend to $0.18 per share. On December 5, 2023, the Board of Directors approved an increase of 83% in the quarterly dividend, which increased the quarterly dividend to $0.33 per share. On June 12, 2024, the Board of Directors approved an increase in the quarterly dividend to $0.37 per share. On March 10, 2025, the Board of Directors approved a further increase of 30% in the quarterly dividend, which increased the quarterly dividend to $0.48 per share. The Credit Agreement permits us to pay dividends to our stockholders and make share repurchases so long as there is no default under the Credit Agreement, our total funded debt to adjusted EBITDA ratio (as set forth in the 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"). Furthermore, our Notes allow us to pay $25.0 million of dividends per fiscal year with no restrictions plus an unlimited amount of dividends so long as our consolidated total leverage ratio is not greater than 3.50 to 1.00, and there is no default under the indenture governing the Notes. The declaration and payment of future dividends under the quarterly dividend program will be at the discretion of the Board of Directors and will depend upon many factors, including our earnings, capital requirements, financial conditions, the terms of our indebtedness and other factors our Board of Directors may deem to be relevant. Our Board of Directors may, however, amend, revoke or suspend our dividend policy at any time and for any reason.

On September 18, 2025, our Board of Directors 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 repurchased approximately $17.9 million and $56.1 million of the Company’s stock during the six months ended October 31, 2025 and 2024, respectively. As of October 31, 2025, $325.8 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 of Directors.

Our primary source of liquidity is the fee revenue generated from our operations, supplemented by our borrowing capacity under our 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 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 and could 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 Credit Agreement to meet our capital needs and/or discontinue our share repurchases and dividend policy.

Cash and cash equivalents and marketable securities were $1,038.3 million and $1,277.0 million as of October 31, 2025 and April 30, 2025, respectively. Net of amounts held in trust for deferred compensation plans and accrued bonuses, cash and marketable securities were $607.0 million and $667.3 million at October 31, 2025 and April 30, 2025, respectively. As of October 31, 2025 and April 30, 2025, we held $364.9 million and $405.2 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 and 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 October 31, 2025 and April 30, 2025, marketable securities of $276.7 million and $270.0 million, respectively, included equity securities of $235.2 million (net of gross unrealized gains of $41.0 million and gross unrealized losses of $0.4 million) and $230.4 million (net of gross unrealized gains of $27.7 million and gross unrealized losses of $0.6 million), respectively, and were held in trust for settlement of our obligations under certain deferred compensation plans, of which $220.5 million and $218.0 million, respectively, are classified as non-current. These marketable securities were held to satisfy vested obligations totaling $217.7 million and $205.3 million as of October 31, 2025 and April 30, 2025, respectively. Unvested obligations under the deferred compensation plans totaled $18.3 million and $19.5 million as of October 31, 2025 and April 30, 2025, respectively.

Our working capital (current assets less current liabilities) was $857.0 million as of October 31, 2025 and $794.5 million as of April 30, 2025. The net increase in our working capital of $62.5 million as of October 31, 2025 compared to April 30, 2025 was primarily attributable to a decrease in compensation and benefits payable and other accrued liabilities, as well as increases in accounts receivable, income taxes and other receivables, and prepaid expenses and other assets. These changes were partially offset by a decrease in cash and cash equivalents. The decrease in compensation and benefits payable and cash and cash equivalents was primarily due to payments of annual bonuses earned in fiscal 2025 and paid during the first quarter of fiscal 2026. The increase in accounts receivable was due to an increase in days of sales outstanding, which went from 58 days to 63 days (which is consistent with historical experience). Income taxes and other receivables increased primarily due to large tax payments made in fiscal 2026 and lease incentives we expect to receive within a year due to the modification of an office lease that we entered into in the second quarter of fiscal 2026. Other accrued liabilities decreased primarily due to a decrease in deferred revenue. Prepaid expenses and other assets increased due to the annual renewal of our computer software licenses and insurance, which typically takes place in first quarter of the fiscal year. Cash used in operating activities was $116.0 million in the six months ended October 31, 2025 compared to $105.2 million in the six months ended October 31, 2024.

Cash used in investing activities was $41.9 million in the six months ended October 31, 2025 compared to $36.3 million in the six months ended October 31, 2024. The increase from cash used in investing activities was primarily due to an increase in the purchase of property and equipment of $18.5 million, partially offset by an increase in proceeds received from sales/maturities of marketable securities net of purchases of $11.0 million during the six months ended October 31, 2025 compared to the year-ago period.

Cash used in financing activities was $87.8 million in the six months ended October 31, 2025 compared to $111.1 million in the six months ended October 31, 2024. The decrease in cash used in financing activities was primarily due to lower repurchases of the Company’s common stock of $37.8 million, partially offset by an increase in dividends paid to stockholders of $12.1 million and higher payments of tax withholding on restricted stock of $2.1 million in the six months ended October 31, 2025 compared to the year-ago period.

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 October 31, 2025 and April 30, 2025, we held contracts with gross cash surrender value of $343.8 million and $325.5 million, respectively. Total outstanding borrowings against the CSV of COLI contracts was $72.8 million as of both October 31, 2025 and April 30, 2025, 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 October 31, 2025 and April 30, 2025, the net cash surrender value of these policies was $271.0 million and $252.6 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 October 31, 2025.

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 October 31, 2025, 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 2025.

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 the six months ended October 31, 2025 and 2024, we recorded foreign currency losses of $1.8 million and $1.1 million, respectively, 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 October 31, 2025 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 $16.4 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 ASC 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 October 31, 2025, 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 $72.8 million of borrowings against the CSV of COLI contracts as of both October 31, 2025 and April 30, 2025, 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 October 31, 2025.

b) Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting during the three months ended October 31, 2025 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 of 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.