Korn Ferry Q1 FY2027 Financial Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended July 31, 2026. Korn Ferry is a global consulting firm providing executive search, talent and organizational solutions, and workforce solutions. Beginning in fiscal 2027, the Company realigned its reporting structure from a solution-based model to a geographic model with three reportable segments: Americas, Europe, Middle East and Africa (EMEA), and Asia Pacific (APAC). Prior period results have been recast to reflect this change.
Key Financial Metrics
| Metric (in thousands, except per share) | Q1 FY2027 (Ended July 31, 2026) |
Q1 FY2026 (Ended July 31, 2025) |
|---|---|---|
| Total Revenue | $764,622 | $715,543 |
| Fee Revenue | $756,496 | $708,613 |
| Operating Income | $93,380 | $83,448 |
| Net Income (Korn Ferry) | $68,967 | $66,636 |
| Diluted EPS | $1.32 | $1.26 |
| Adjusted EBITDA | $128,236 | $120,394 |
| Cash and Cash Equivalents | $800,852 | $684,855 |
| Long-Term Debt | $398,778 | $398,565 |
| Working Capital | $947,751 | $923,967 |
Note: Adjusted EBITDA is a non-GAAP measure excluding restructuring, integration/acquisition costs, and certain non-cash charges.
Material Changes vs. Prior Period
- Revenue Growth: Fee revenue increased 7% year-over-year to $756.5 million, driven by double-digit growth in Search and Workforce Solutions across all regions.
- Profitability: Net income attributable to Korn Ferry rose 4% to $69.0 million. Adjusted EBITDA increased 7% to $128.2 million, maintaining a 17% margin.
- Expense Increases: General and administrative expenses rose 26% primarily due to $7.6 million in integration/acquisition costs and increased marketing spend. Compensation and benefits increased 3% due to higher severance and salaries.
- Cash Flow: Net cash used in operating activities was $247.6 million, an increase from $237.4 million in the prior year, largely due to the timing of bonus payments and changes in working capital.
Outlook, Risks, and Subsequent Events
Subsequent Events (Post-July 31, 2026):
- Acquisition: On September 1, 2026, Korn Ferry completed the acquisition of Auxey Holdco Limited ("AMS") for $1.2 billion ($0.9 billion cash and $0.3 billion stock). AMS specializes in recruitment process outsourcing and campus recruiting.
- Debt Restructuring: On August 18, 2026, the Company entered into an amended credit agreement, borrowing $600 million in a new term loan. Proceeds were used to redeem all outstanding $400 million Senior Unsecured Notes and fund the AMS acquisition.
- Dividend: The Board declared a quarterly cash dividend of $0.55 per share, payable October 15, 2026.
Risks and Contingencies:
- Integration risks associated with the AMS acquisition.
- Macroeconomic factors including inflation, geopolitical tensions, and potential recession impacting demand for services.
- Foreign currency exchange fluctuations, with a 10% currency shift potentially impacting results by $15.8 million.
Investor Verification Checklist
- Debt Capacity: Verify the impact of the new $600 million term loan and $850 million revolving facility on leverage ratios and future interest expenses.
- Acquisition Integration: Monitor the integration progress of AMS and the realization of anticipated synergies.
- Working Capital Trends: Review the increase in days sales outstanding (from 54 to 61 days) and its impact on future cash flow.
- Segment Performance: Analyze the geographic shift in reporting to understand regional profitability drivers under the new structure.
- Deferred Compensation: Note that a significant portion of marketable securities ($250.2 million) is held in trust for deferred compensation plans and is not available for general corporate use.