Korn Ferry (KFY) 10-K Summary: Fiscal Year Ended April 30, 2026
Business Context and Reporting Period
Company: Korn Ferry (KFY)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal Year ended April 30, 2026
Business Overview: Korn Ferry is a global consulting firm specializing in talent and organizational consulting. The firm operates through five solution areas: Consulting, Digital, Executive Search, Professional Search & Interim, and Recruitment Process Outsourcing (RPO). The company serves 94% of the S&P 100 and 82% of the S&P 500. In fiscal 2026, Korn Ferry was named a Founding Partner of the LA28 Olympic and Paralympic Games.
Key Financial Metrics
| Metric | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Fee Revenue | $2,907.5 million | $2,730.1 million | +7.0% |
| Net Income (Attributable to KFY) | $277.4 million | $246.1 million | +12.7% |
| Net Income Margin | 9.5% | 9.0% | +50 bps |
| Adjusted EBITDA | $497.8 million | $463.9 million | +7.3% |
| Adjusted EBITDA Margin | 17.1% | 17.0% | +10 bps |
| Diluted EPS | $5.22 | $4.60 | +13.5% |
| Cash from Operations | $414.2 million | $364.4 million | +13.7% |
| Total Debt Outstanding | $400.0 million | $400.0 million | 0% |
| Available Credit Facility | $845.7 million | $645.6 million | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Fee revenue increased by $177.4 million (7%), driven by growth in Professional Search & Interim (+11%), Executive Search North America (+9%), and Consulting (+4%). Foreign exchange rates favorably impacted revenue by $48.1 million.
- Profitability: Net income margin expanded to 9.5% from 9.0%. Adjusted EBITDA margin improved slightly to 17.1%.
- Cost Structure: Compensation and benefits expenses rose 6% to $1.867 billion, primarily due to higher performance-related bonuses ($33.6 million increase) and salaries. General and administrative expenses decreased 4% to $247.7 million, largely due to a $13.9 million gain from an office lease modification.
- Acquisitions: The acquisition of Trilogy International (completed Nov 1, 2024) contributed to the growth in the Professional Search & Interim segment, specifically in interim fee revenue.
- Capital Allocation: The company returned $220.7 million to shareholders via $116.1 million in share repurchases and $104.6 million in dividends.
Guidance, Outlook, and Risks
- Strategic Initiatives: The company is accelerating AI transformation initiatives to embed AI into workflows and digital platforms. It is also transitioning its external reporting structure from solution-based to a regional model (Americas, EMEA, APAC) effective in fiscal 2027.
- Dividend Policy: The Board approved a 15% increase in the quarterly dividend to $0.55 per share in March 2026. A subsequent dividend of $0.55 per share was declared on June 22, 2026.
- Share Repurchases: As of April 30, 2026, $227.7 million remained available under the share repurchase program.
- Key Risks:
- Competition: Intense competition from large consulting firms, AI-enabled platforms, and social networking sites.
- AI Disruption: Rapid advancements in AI could reduce demand for traditional consulting services or require significant investment to maintain competitiveness.
- Consultant Retention: The business relies heavily on key consultants; the top 10 consultants generated approximately 4% of total fee revenue.
- Geopolitical & Economic: Exposure to global economic conditions, inflation, and geopolitical instability (e.g., conflicts in the Middle East and Ukraine).
- Cybersecurity: Risks related to data privacy, cyberattacks, and the integrity of proprietary data assets.
Investor Verification Checklist
- Revenue Quality: Verify the sustainability of the 7% revenue growth, particularly the contribution from the Trilogy acquisition and the impact of favorable foreign exchange rates.
- Cost Management: Monitor the trajectory of compensation and benefits expenses, which rose 6%, to ensure margins are not compressed by rising labor costs.
- AI Strategy Execution: Assess the tangible ROI of the company's AI transformation initiatives and their impact on bill rates and efficiency.
- Debt Covenants: Confirm continued compliance with the consolidated net leverage ratio covenants (max 5.00:1.00 under Credit Agreement; max 3.50:1.00 for Notes) to ensure dividend and repurchase flexibility.
- Segment Performance: Review the performance of the Executive Search Latin America segment, which saw a 31% decline in Adjusted EBITDA, to understand regional headwinds.