FULLTEXT DEL 1 AV 2
10-Q – 2025-12-09 – kfy-20251031.htm
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2025
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ___________
Commission File Number 001-14505
KORN FERRY
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-2623879
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
1900 Avenue of the Stars , Suite 1225 , Los Angeles , California 90067
(Address of principal executive offices) (Zip Code)
( 310 ) 552-1834
(Registrant’s telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share KFY New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer ☑
Accelerated filer o
Non-accelerated filer o
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The number of shares outstanding of our common stock as of December 4, 2025 was 52,194,944 shares.
KORN FERRY
Table of Contents
Item # Description Page
Part I. Financial Information
Item 1.
Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of October 31, 2025 (unaudited) and April 30, 2025
1
Condensed Consolidated Statements of Income (unaudited) for the three and six months ended October 31, 2025 and 2024
2
Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended October 31, 2025 and 2024
3
Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for three and six months ended October 31, 2025 and 2024
4
Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended October 31, 2025 and 2024
5
Notes to Condensed Consolidated Unaudited Financial Statements
6
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
26
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
44
Item 4.
Controls and Procedures
45
Part II. Other Information
Item 1.
Legal Proceedings
46
Item 1A.
Risk Factors
46
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
46
Item 5.
Other Information
46
Item 6.
Exhibits
47
Signatures
48
Item 1. Condensed Consolidated Financial Statements
KORN FERRY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
October 31,
2025 April 30,
2025
(unaudited)
(in thousands, except per share data)
ASSETS
Cash and cash equivalents $ 761,579 $ 1,006,964
Marketable securities 39,509 36,388
Receivables due from clients, net of allowance for doubtful accounts of $ 43,418 and $ 40,461 at October 31, 2025 and April 30, 2025, respectively
607,303 565,255
Income taxes and other receivables 75,254 38,394
Unearned compensation 67,603 61,649
Prepaid expenses and other assets 54,989 41,488
Total current assets 1,606,237 1,750,138
Marketable securities, non-current 237,227 233,626
Property and equipment, net 176,506 173,610
Operating lease right-of-use assets, net 131,861 152,712
Cash surrender value of company-owned life insurance policies, net of loans 270,984 252,621
Deferred income taxes 127,324 144,560
Goodwill 948,284 948,832
Intangible assets, net 57,901 70,193
Unearned compensation, non-current 137,290 106,965
Investments and other assets 29,319 27,967
Total assets $ 3,722,933 $ 3,861,224
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable $ 53,032 $ 58,884
Income taxes payable 23,243 23,079
Compensation and benefits payable 355,256 530,473
Operating lease liability, current 32,996 38,573
Other accrued liabilities 284,722 304,589
Total current liabilities 749,249 955,598
Deferred compensation and other retirement plans 476,882 477,770
Operating lease liability, non-current 118,563 131,762
Long-term debt 398,145 397,736
Deferred tax liabilities 6,276 5,981
Other liabilities 24,033 20,238
Total liabilities 1,773,148 1,989,085
Stockholders' equity
Common stock: $ 0.01 par value, 150,000 shares authorized, 79,136 and 78,264 shares issued and 51,694 and 51,458 shares outstanding at October 31, 2025 and April 30, 2025, respectively
355,151 364,425
Retained earnings 1,675,964 1,588,274
Accumulated other comprehensive loss, net ( 86,960 ) ( 86,243 )
Total Korn Ferry stockholders' equity 1,944,155 1,866,456
Noncontrolling interest 5,630 5,683
Total stockholders' equity 1,949,785 1,872,139
Total liabilities and stockholders' equity $ 3,722,933 $ 3,861,224
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
KORN FERRY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended
October 31, Six Months Ended
October 31,
2025 2024 2025 2024
(in thousands, except per share data)
Fee revenue $ 721,699 $ 674,365 $ 1,430,312 $ 1,349,311
Reimbursed out-of-pocket engagement expenses 8,101 7,595 15,031 15,410
Total revenue 729,800 681,960 1,445,343 1,364,721
Compensation and benefits 462,034 437,427 923,445 889,202
General and administrative expenses 50,250 64,541 114,124 124,540
Reimbursed expenses 8,101 7,595 15,031 15,410
Cost of services 79,087 64,657 156,281 132,201
Depreciation and amortization 31,573 19,688 54,259 39,266
Restructuring charges, net — 576 — 576
Total operating expenses 631,045 594,484 1,263,140 1,201,195
Operating income 98,755 87,476 182,203 163,526
Other income, net
7,075 5,391 19,827 19,896
Interest expense, net ( 5,763 ) ( 5,626 ) ( 9,279 ) ( 9,571 )
Income before provision for income taxes 100,067 87,241 192,751 173,851
Income tax provision 26,645 24,898 51,895 47,252
Net income 73,422 62,343 140,856 126,599
Net income attributable to noncontrolling interest ( 1,023 ) ( 1,543 ) ( 1,821 ) ( 3,195 )
Net income attributable to Korn Ferry
$ 72,399 $ 60,800 $ 139,035 $ 123,404
Earnings per common share attributable to Korn Ferry:
Basic $ 1.38 $ 1.16 $ 2.66 $ 2.34
Diluted $ 1.36 $ 1.14 $ 2.61 $ 2.30
Weighted-average common shares outstanding:
Basic 51,745 51,957 51,606 51,953
Diluted 52,517 52,750 52,557 52,864
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
KORN FERRY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
Three Months Ended
October 31, Six Months Ended
October 31,
2025 2024 2025 2024
(in thousands)
Net income $ 73,422 $ 62,343 $ 140,856 $ 126,599
Other comprehensive income:
Foreign currency translation adjustments 946 4,172 ( 346 ) 6,451
Deferred compensation and pension plan adjustments, net of tax ( 11 ) ( 97 ) ( 25 ) ( 147 )
Net unrealized gain (loss) on marketable securities, net of tax
46 30 ( 12 ) 94
Comprehensive income
74,403 66,448 140,473 132,997
Less: comprehensive income attributable to noncontrolling interest ( 1,113 ) ( 1,289 ) ( 2,155 ) ( 2,423 )
Comprehensive income attributable to Korn Ferry
$ 73,290 $ 65,159 $ 138,318 $ 130,574
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
KORN FERRY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
Common Stock Retained
Earnings Accumulated
Other
Comprehensive
Loss, Net Total
Korn Ferry
Stockholders'
Equity Noncontrolling
Interest Total
Stockholder's
Equity
Shares Amount
(in thousands)
Balance as of April 30, 2025
51,458 $ 364,425 $ 1,588,274 $ ( 86,243 ) $ 1,866,456 $ 5,683 $ 1,872,139
Net income — — 66,636 — 66,636 798 67,434
Other comprehensive (loss) income
— — — ( 1,608 ) ( 1,608 ) 244 ( 1,364 )
Dividends paid to stockholders
— — ( 26,209 ) — ( 26,209 ) — ( 26,209 )
Purchase of stock ( 400 ) ( 28,597 ) — — ( 28,597 ) — ( 28,597 )
Issuance of stock 712 4,620 — — 4,620 — 4,620
Stock-based compensation — 10,790 — — 10,790 — 10,790
Balance as of July 31, 2025
51,770 351,238 1,628,701 ( 87,851 ) 1,892,088 6,725 1,898,813
Net income
— — 72,399 — 72,399 1,023 73,422
Other comprehensive income
— — — 891 891 90 981
Dividends paid to stockholders
— — ( 25,136 ) — ( 25,136 ) — ( 25,136 )
Dividends paid to noncontrolling interest
— — — — — ( 2,208 ) ( 2,208 )
Purchase of stock ( 119 ) ( 8,390 ) — — ( 8,390 ) — ( 8,390 )
Issuance of stock 43 — — — — — —
Stock-based compensation — 12,303 — — 12,303 — 12,303
Balance as of October 31, 2025
51,694 $ 355,151 $ 1,675,964 $ ( 86,960 ) $ 1,944,155 $ 5,630 $ 1,949,785
Common Stock Retained
Earnings Accumulated
Other
Comprehensive
Loss, Net Total
Korn Ferry
Stockholders'
Equity Noncontrolling
Interest Total
Stockholder's
Equity
Shares Amount
(in thousands)
Balance as of April 30, 2024
51,983 $ 414,885 $ 1,425,844 $ ( 107,671 ) $ 1,733,058 $ 4,267 $ 1,737,325
Net income — — 62,604 — 62,604 1,652 64,256
Other comprehensive income (loss)
— — — 2,811 2,811 ( 518 ) 2,293
Dividends paid to stockholders
— — ( 19,800 ) — ( 19,800 ) — ( 19,800 )
Purchase of stock ( 604 ) ( 40,113 ) — — ( 40,113 ) — ( 40,113 )
Issuance of stock 775 4,720 — — 4,720 — 4,720
Stock-based compensation — 10,561 — — 10,561 — 10,561
Balance as of July 31, 2024
52,154 390,053 1,468,648 ( 104,860 ) 1,753,841 5,401 1,759,242
Net income
— — 60,800 — 60,800 1,543 62,343
Other comprehensive income (loss)
— — — 4,359 4,359 ( 254 ) 4,105
Dividends paid to stockholders
— — ( 19,462 ) — ( 19,462 ) — ( 19,462 )
Dividends paid to noncontrolling interest — — — — — ( 1,570 ) ( 1,570 )
Purchase of stock ( 461 ) ( 32,944 ) — — ( 32,944 ) — ( 32,944 )
Issuance of stock 55 — — — — — —
Stock-based compensation — 11,151 — — 11,151 — 11,151
Balance as of October 31, 2024
51,748 $ 368,260 $ 1,509,986 $ ( 100,501 ) $ 1,777,745 $ 5,120 $ 1,782,865
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
KORN FERRY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended
October 31,
2025 2024
(in thousands)
Cash flows from operating activities:
Net income $ 140,856 $ 126,599
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization 54,259 39,266
Stock-based compensation expense 23,535 22,163
Provision for doubtful accounts 9,185 8,427
Gain on modification of office lease
( 13,907 ) —
Gain on marketable securities
( 18,985 ) ( 18,922 )
Deferred income taxes 17,976 15,273
Gain on cash surrender value of life insurance policies ( 5,070 ) ( 4,789 )
Change in other assets and liabilities:
Accounts payable and accrued liabilities ( 208,287 ) ( 214,832 )
Receivables due from clients ( 51,233 ) ( 47,109 )
Deferred compensation 9,646 21,017
Unearned compensation ( 36,279 ) ( 27,368 )
Income taxes and other receivables ( 24,303 ) ( 14,078 )
Income taxes payable ( 289 ) ( 12,471 )
Prepaid expenses and other assets ( 13,501 ) 1,511
Other 445 126
Net cash used in operating activities
( 115,952 ) ( 105,187 )
Cash flows from investing activities:
Purchase of property and equipment ( 43,352 ) ( 24,807 )
Proceeds from sales/maturities of marketable securities 32,458 25,301
Purchase of marketable securities ( 20,017 ) ( 23,892 )
Premium on company-owned life insurance policies ( 13,512 ) ( 13,514 )
Proceeds from life insurance policies 2,488 612
Dividends received from unconsolidated subsidiaries — 40
Net cash used in investing activities
( 41,935 ) ( 36,260 )
Cash flows from financing activities:
Repurchases of common stock ( 18,351 ) ( 56,153 )
Dividends paid to shareholders ( 51,345 ) ( 39,262 )
Payments of tax withholdings on restricted stock ( 19,041 ) ( 16,984 )
Proceeds from issuance of common stock in connection with an employee stock purchase plan
4,158 4,248
Dividends - noncontrolling interest ( 2,208 ) ( 1,570 )
Principal payments on finance leases ( 989 ) ( 815 )
Payments on life insurance policy loans — ( 519 )
Net cash used in financing activities ( 87,776 ) ( 111,055 )
Effect of exchange rate changes on cash and cash equivalents 278 6,347
Net decrease in cash and cash equivalents ( 245,385 ) ( 246,155 )
Cash and cash equivalents at beginning of period 1,006,964 941,005
Cash and cash equivalents at end of the period $ 761,579 $ 694,850
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025
1. Organization and Summary of Significant Accounting Policies
Nature of Business
Korn Ferry, a Delaware corporation, and its subsidiaries (the “Company”) is a global consulting firm that powers performance. The Company helps 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. Korn Ferry has expanded its capabilities and become a comprehensive partner for talent and organizational performance. The Company delivers 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.
Korn Ferry delivers its services through five Solution areas and together, these areas comprise eight reportable segments, supported by a centralized corporate function that drives consistency, innovation, and scale. These segments represent how the Company currently organizes and delivers work to the market, enabling Korn Ferry to deliver specialized expertise at scale while remaining agile in response to evolving client needs. 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. The 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, intellectual property ("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 Korn Ferry’s own top-tier executive search professionals. The Company helps 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. Korn Ferry helps clients rapidly place permanent professionals and senior/professional interim leaders across business-critical functions such as Finance and Accounting, IT, HR, and Operations.
5. Recruitment Process Outsourcing ("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 Korn Ferry’s 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.
Basis of Consolidation and Presentation
The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended April 30, 2025 for the Company and its wholly and majority owned/controlled domestic and international subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The preparation of the condensed consolidated financial statements conform with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X and prevailing practice within the Company's different industries. The accompanying condensed consolidated financial statements include all adjustments consisting of normal recurring accruals and any other adjustments that management considers necessary for a fair presentation of the results for these periods. The results of operations for the interim period are not necessarily indicative of the results for the entire fiscal year or any other period.
The Company considers events or transactions that occur after the balance sheet date but before the condensed consolidated financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosures.
6
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
Use of Estimates and Uncertainties
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could materially differ from these estimates, and changes in estimates are reported in current operations as new information is learned or upon the amounts becoming fixed or determinable.
Revenue Recognition
Substantially all fee revenue is derived from talent and organizational consulting services and digital sales, stand-alone or as part of a solution, fees for professional services related to executive and professional recruitment performed on a retained basis, interim services and RPO, either stand-alone or as part of a solution.
Revenue is recognized when control of the goods and services are transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods and services. Revenue contracts with customers are evaluated based on the five-step model outlined in Accounting Standards Codification (“ASC”) 606 (“ASC 606”), Revenue from Contracts with Customers: 1) identify the contract with a customer; 2) identify the performance obligation(s) in the contract; 3) determine the transaction price; 4) allocate the transaction price to the separate performance obligation(s); and 5) recognize revenue when (or as) each performance obligation is satisfied.
Consulting fee revenue is primarily recognized as services are rendered, measured by total hours incurred as a percentage of the total estimated hours at completion. It is possible that updated estimates for consulting engagements may vary from initial estimates with such updates being recognized in the period of determination. Depending on the timing of billings and services rendered, the Company accrues or defers revenue as appropriate.
Digital fee revenue is generated from IP based software products enabling large-scale talent programs for pay, talent development, engagement, and assessment and is consumed directly by an end user or indirectly through a consulting engagement. Revenue is recognized as services are delivered and the Company has a legally enforceable right to payment. Revenue also comes from the sale of the Company’s product subscriptions, which are considered symbolic IP due to the dynamic nature of the content. As a result, revenue is recognized over the term of the contract. Functional IP licenses grant customers the right to use IP content via the delivery of a flat file. Because the IP content license has significant stand-alone functionality, revenue is recognized upon delivery and when an enforceable right to payment exists. Revenue for tangible and digital products sold by the Company, such as books and digital files, is recognized when these products are shipped.
Fee revenue from executive and professional search activities is generally one-third of the estimated first-year cash compensation of the placed candidate, plus a percentage of the fee to cover indirect engagement-related expenses. In addition to the search retainer, an uptick fee is billed when the actual compensation awarded by the client for a placement is higher than the estimated compensation. In the aggregate, upticks have been a relatively consistent percentage of the original estimated fee; therefore, the Company estimates upticks using the expected value method based on historical data on a portfolio basis. In a standard search engagement, there is one performance obligation, which is the promise to undertake a search. The Company generally recognizes such revenue over the course of a search and when it is legally entitled to payment as outlined in the billing terms of the contract. Any revenues associated with services that are provided on a contingent basis are recognized once the contingency is resolved, as this is when control is transferred to the customer. These assumptions determine the timing of revenue recognition for the reported period. In addition to talent acquisition for permanent placement roles, the Professional Search & Interim segment also offers recruitment services for interim roles. Interim roles are short term in duration, generally less than 12 months. Generally, each interim role is a separate performance obligation. The Company recognizes fee revenue over the duration that the interim resources’ services are provided which also aligns to the contracted invoicing plan and enforceable right to payment.
RPO fee revenue is generated through two distinct phases: 1) the implementation phase and 2) the post-implementation recruitment phase. The fees associated with the implementation phase are recognized over the period that the related implementation services are provided. The post-implementation recruitment phase represents end-to-end recruiting services to clients for which there are both fixed and variable fees, which are recognized over the period that the related recruiting services are performed.
7
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
Allowance for Doubtful Accounts
An allowance is established for doubtful accounts by taking a charge to general and administrative expenses. The Company’s expected credit loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers’ trade accounts receivable. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is primarily based on historical loss-rate experience. When required, the Company adjusts the loss-rate methodology to account for current conditions and reasonable and supportable expectations of future economic and market conditions. The Company generally assesses future economic conditions for a period of sixty to ninety days, which corresponds with the contractual life of its accounts receivables. After the Company exhausts its collection efforts, the amount of the allowance is reduced for balances written off as uncollectible.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. As of October 31, 2025 and April 30, 2025, the Company’s investments in cash equivalents consisted of money market funds and as of April 30, 2025 also consisted of commercial paper with initial maturity of less than 90 days for which market prices are readily available. The Company maintains its cash and cash equivalents in bank accounts that exceed federally insured FDIC limits. The Company has not experienced any losses in such accounts.
Marketable Securities
The Company currently has investments in marketable securities and mutual funds that are classified as either equity securities or available-for-sale debt securities. The classification of the investments in these marketable securities and mutual funds is assessed upon purchase and reassessed at each reporting period. These investments are recorded at fair value and are classified as marketable securities in the accompanying condensed consolidated balance sheets. The investments that the Company may sell within the next 12 months are carried as current assets.
The Company invests in mutual funds (for which market prices are readily available) that are held in trust to satisfy obligations under the Company’s deferred compensation plans. Such investments are classified as equity securities and mirror the employees’ investment elections in their deemed accounts in the Executive Capital Accumulation Plan and similar plans in Asia Pacific and Canada (collectively, “ECAP”) from a pre-determined set of securities. Realized gains (losses) on marketable securities are determined by specific identification. Interest is recognized on an accrual basis; dividends are recorded as earned on the ex-dividend date. Interest, dividend income and the changes in fair value in marketable securities are recorded in the accompanying condensed consolidated statements of income in other income, net.
The Company also invests cash in excess of its daily operating requirements and capital needs primarily in marketable fixed income (debt) securities in accordance with the Company’s investment policy, which restricts the type of investments that can be made. The Company’s investment portfolio includes commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities. These marketable fixed income (debt) securities are classified as available-for-sale securities based on management’s decision, at the date such securities are acquired, not to hold these securities to maturity or actively trade them. The Company carries these marketable debt securities at fair value based on the market prices for these marketable debt securities or similar debt securities whose prices are readily available. The changes in fair values, net of applicable taxes, are recorded as unrealized gains or losses as a component of comprehensive income unless the change is due to credit loss. A credit loss is recorded in the condensed consolidated statements of income in other income, net; any amount in excess of the credit loss is recorded as unrealized losses as a component of comprehensive income. Generally, the amount of the loss is the difference between the cost or amortized cost and its then current fair value; a credit loss is the difference between the discounted expected future cash flows to be collected from the debt security and the cost or amortized cost of the debt security. During the three and six months ended October 31, 2025 and 2024, no amount was recognized as a credit loss for the Company’s available for sale debt securities.
Fair Value of Financial Instruments
Fair value is the price the Company would receive to sell an asset or transfer a liability (exit price) in an orderly transaction between market participants. For those assets and liabilities recorded or disclosed at fair value, the Company determines the fair value based upon the quoted market price, if available. If a quoted market price is not available for identical assets, the fair value is based upon the quoted market price of similar assets. The fair values are assigned a level within the fair value hierarchy as defined below:
• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
8
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
• Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
As of October 31, 2025 and April 30, 2025, the Company held certain assets that are required to be measured at fair value on a recurring basis. These included cash equivalents, accounts receivable, marketable securities and foreign currency forward contracts. The carrying amount of cash equivalents and accounts receivable approximates fair value due to the short-term maturity of these instruments. The fair values of marketable securities classified as equity securities are obtained from quoted market prices, and the fair values of marketable securities classified as available-for-sale and foreign currency forward contracts are obtained from a third party, which are based on quoted prices or market prices for similar assets and financial instruments.
Goodwill and Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of assets acquired. Goodwill is tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Results of the annual qualitative test performed as of February 1, 2025, indicated that the fair value of each of the reporting units exceeded its carrying value and no indicators of impairment were identified. As a result, no impairment charge was recognized. As of October 31, 2025 and April 30, 2025, there were no indicators of potential impairment with respect to the Company’s goodwill that would require further testing for impairment.
Intangible assets primarily consist of customer lists, non-compete agreements, proprietary databases and IP. Intangible assets are recorded at their estimated fair value at the date of acquisition and are amortized in a pattern in which the asset is consumed if that pattern can be reliably determined, or using the straight-line method over their estimated useful lives, which range from one to 24 years. For intangible assets subject to amortization, an impairment loss is recognized if the carrying amount of the intangible assets is not recoverable and exceeds fair value. The carrying amount of the intangible assets is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from use of the asset. The Company reviewed its intangible assets and did not identify any indicators of impairment as of October 31, 2025 and April 30, 2025.
Earnings Per Share
The Company treats unvested share-based payment awards that have non-forfeitable rights to dividends prior to vesting as a separate class of securities in calculating earnings per share. The Company has granted and expects to continue to grant to certain employees under its restricted stock agreements, grants that contain non-forfeitable rights to dividends. Such grants are considered participating securities. Therefore, the Company is required to apply the two-class method in calculating earnings per share. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The dilutive effect of participating securities is calculated using the more dilutive of the treasury method or the two-class method.
Basic earnings per common share was computed using the two-class method by dividing basic net earnings attributable to common stockholders by the weighted-average number of common shares outstanding. Diluted earnings per common share was computed using the two-class method by dividing diluted net earnings attributable to common stockholders by the weighted-average number of common shares outstanding plus dilutive common equivalent shares. Dilutive common equivalent shares include all in-the-money outstanding options or other contracts to issue common stock as if they were exercised or converted. Financial instruments that are not in the form of common stock, but when converted into common stock increase earnings per share, are anti-dilutive and are not included in the computation of diluted earnings per share.
Recent Accounting Standards - Not Yet Adopted
In December 2023, the Financial Accounting Standards Board issued an amendment to the accounting update for income taxes disclosures. The new amendment provides improvements to annual income tax disclosures by requiring specific categories in the rate reconciliation and disaggregated information for income taxes paid. The amendment of this update is effective for annual periods beginning after December 15, 2024, and should be applied on a prospective basis. The Company will adopt this guidance beginning in fiscal 2026 for its annual report for the year ending April 30, 2026. The adoption of this guidance is not anticipated to have a material impact on the condensed consolidated financial statements.
9
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
In November 2024, the Financial Accounting Standards Board issued an accounting update that requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. This update is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company will adopt this guidance in fiscal 2028 and in the interim periods beginning in fiscal 2029. The adoption of this guidance is not anticipated to have a material impact on the condensed consolidated financial statements.
In July 2025, the Financial Accounting Standards Board issued an amendment to the accounting update for measurement of credit losses for account receivable and contract assets. The amendment in this update provides an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The amendment will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which the financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the impact of this accounting guidance but does not anticipate that it will have a material impact on the condensed consolidated financial statements.
In September 2025, the Financial Accounting Standards Board issued an amendment to the accounting update for internal-use software. The new amendment removes all references to prescriptive and sequential software development stages and requires the Company to start capitalizing software costs when 1.) management has authorized and committed to funding the software project and 2.) it is probable that the project will be completed and the software will be used to perform the function intended. The amendment is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of this accounting guidance on the condensed consolidated financial statements.
2. Basic and Diluted Earnings Per Share
The following table summarizes basic and diluted earnings per common share attributable to common stockholders:
Three Months Ended
October 31, Six Months Ended
October 31,
2025 2024 2025 2024
(in thousands, except per share data)
Net income attributable to Korn Ferry
$ 72,399 $ 60,800 $ 139,035 $ 123,404
Less: distributed and undistributed earnings to nonvested restricted stockholders 876 766 1,729 1,770
Basic net earnings attributable to common stockholders
71,523 60,034 137,306 121,634
Add: undistributed earnings to nonvested restricted stockholders 574 518 1,042 1,174
Less: reallocation of undistributed earnings to nonvested restricted stockholders 565 510 1,024 1,154
Diluted net earnings attributable to common stockholders
$ 71,532 $ 60,042 $ 137,324 $ 121,654
Weighted-average common shares outstanding:
Basic weighted-average number of common shares outstanding 51,745 51,957 51,606 51,953
Effect of dilutive securities:
Restricted stock 766 790 943 909
Employee Stock Purchase Plan ("ESPP")
6 3 8 2
Diluted weighted-average number of common shares outstanding 52,517 52,750 52,557 52,864
Net earnings per common share:
Basic earnings per share
$ 1.38 $ 1.16 $ 2.66 $ 2.34
Diluted earnings per share
$ 1.36 $ 1.14 $ 2.61 $ 2.30
10
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
During the three and six months ended October 31, 2025, restricted stock awards of 0.6 million shares and 0.6 million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive. During the three and six months ended October 31, 2024, restricted stock awards of 0.7 million shares and 0.7 million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.
3. Comprehensive Income
Comprehensive income is comprised of net income and all changes to stockholders’ equity, except those changes resulting from investments by stockholders (changes in paid in capital) and distributions to stockholders (dividends), and is reported in the accompanying condensed consolidated statements of comprehensive income. Accumulated other comprehensive loss, net of taxes, is recorded as a component of stockholders’ equity.
The components of accumulated other comprehensive loss, net were as follows:
October 31,
2025 April 30,
2025
(in thousands)
Foreign currency translation adjustments $ ( 94,584 ) $ ( 93,904 )
Deferred compensation and pension plan adjustments, net of tax 7,579 7,604
Marketable securities unrealized gain, net of tax
45 57
Accumulated other comprehensive loss, net $ ( 86,960 ) $ ( 86,243 )
The following table summarizes the changes in each component of accumulated other comprehensive loss, net for the three months ended October 31, 2025:
Foreign
Currency
Translation Deferred
Compensation
and Pension
Plan Unrealized (Losses) Gains on
Marketable Securities
Accumulated
Other
Comprehensive
Loss
(in thousands)
Balance as of July 31, 2025
$ ( 95,440 ) $ 7,590 $ ( 1 ) $ ( 87,851 )
Unrealized gains arising during the period
856 — 46 902
Reclassification of realized net gains to net income
— ( 11 ) — ( 11 )
Balance as of October 31, 2025
$ ( 94,584 ) $ 7,579 $ 45 $ ( 86,960 )
The following table summarizes the changes in each component of accumulated other comprehensive loss, net for the six months ended October 31, 2025:
Foreign
Currency
Translation Deferred
Compensation
and Pension
Plan
Unrealized Gains
on Marketable Securities
Accumulated
Other
Comprehensive
Loss
(in thousands)
Balance as of April 30, 2025
$ ( 93,904 ) $ 7,604 $ 57 $ ( 86,243 )
Unrealized losses arising during the period
( 680 ) — ( 12 ) ( 692 )
Reclassification of realized net gains to net income
— ( 25 ) — ( 25 )
Balance as of October 31, 2025
$ ( 94,584 ) $ 7,579 $ 45 $ ( 86,960 )
11
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
The following table summarizes the changes in each component of accumulated other comprehensive loss, net for the three months ended October 31, 2024:
Foreign
Currency
Translation Deferred
Compensation
and Pension
Plan
Unrealized Gains on
Marketable Securities
Accumulated
Other
Comprehensive
Loss
(in thousands)
Balance as of July 31, 2024
$ ( 113,207 ) $ 8,320 $ 27 $ ( 104,860 )
Unrealized gains arising during the period
4,426 — 30 4,456
Reclassification of realized net gains to net income
— ( 97 ) — ( 97 )
Balance as of October 31, 2024
$ ( 108,781 ) $ 8,223 $ 57 $ ( 100,501 )
The following table summarizes the changes in each component of accumulated other comprehensive loss, net for the six months ended October 31, 2024:
Foreign
Currency
Translation Deferred
Compensation
and Pension
Plan
Unrealized (Losses) Gains
on Marketable Securities
Accumulated
Other
Comprehensive
Loss
(in thousands)
Balance as of April 30, 2024
$ ( 116,004 ) $ 8,370 $ ( 37 ) $ ( 107,671 )
Unrealized gains arising during the period
7,223 — 94 7,317
Reclassification of realized net gains to net income
— ( 147 ) — ( 147 )
Balance as of October 31, 2024
$ ( 108,781 ) $ 8,223 $ 57 $ ( 100,501 )
4. Employee Stock Plans
Stock-Based Compensation
The following table summarizes the components of stock-based compensation expense recognized in the Company’s condensed consolidated statements of income for the periods indicated:
Three Months Ended
October 31, Six Months Ended
October 31,
2025 2024 2025 2024
(in thousands)
Restricted stock $ 12,303 $ 11,151 $ 23,093 $ 21,712
ESPP 223 229 442 451
Total stock-based compensation expense $ 12,526 $ 11,380 $ 23,535 $ 22,163
Common Stock
During the three and six months ended October 31, 2025, the Company repurchased (on the open market or through privately negotiated transactions) 114,677 shares and 260,447 shares of the Company’s common stock for $ 8.1 million and $ 17.9 million, respectively. During the three and six months ended October 31, 2024, the Company repurchased (on the open market or through privately negotiated transactions) 456,250 shares and 807,500 shares of the Company's common stock for $ 32.6 million and $ 56.1 million, respectively.
12
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
Cash Dividends
The following table shows the Company's cash dividend declared per share for the periods indicated:
Three Months Ended
October 31, Six Months Ended
October 31,
2025 2024 2025 2024
Cash dividends declared per share
$ 0.48 $ 0.37 $ 0.96 $ 0.74
5. Financial Instruments
The following tables show the Company’s financial instruments and balance sheet classification as of October 31, 2025 and April 30, 2025:
October 31, 2025
Fair Value Measurement Balance Sheet Classification
Cost Unrealized
Gains Unrealized
Losses Fair
Value Cash and
Cash
Equivalents Marketable
Securities,
Current Marketable
Securities,
Non-
current Other Accrued Liabilities
(in thousands)
Changes in Fair Value Recorded in
Other Comprehensive Income
Level 2:
Commercial paper $ 1,967 $ — $ — $ 1,967 $ — $ 1,967 $ — $ —
Corporate notes/bonds 37,147 68 ( 11 ) 37,204 — 22,900 14,304 —
U.S. Treasury and Agency Securities 2,402 3 ( 1 ) 2,404 — — 2,404 —
Total debt investments $ 41,516 $ 71 $ ( 12 ) $ 41,575 $ — $ 24,867 $ 16,708 $ —
Changes in Fair Value Recorded in
Net Income
Level 1:
Mutual funds (1)
$ 235,161 $ — $ 14,642 $ 220,519 $ —
Total equity investments $ 235,161 $ — $ 14,642 $ 220,519 $ —
Cash $ 598,067 $ 598,067 $ — $ — $ —
Money market funds 163,512 163,512 — — —
Level 2:
Foreign currency forward contracts ( 700 ) — — — ( 700 )
Total $ 1,037,615 $ 761,579 $ 39,509 $ 237,227 $ ( 700 )
13
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
April 30, 2025
Fair Value Measurement Balance Sheet Classification
Cost Unrealized
Gains Unrealized
Losses Fair
Value Cash and
Cash
Equivalents Marketable
Securities,
Current Marketable
Securities,
Non-current Income Taxes & Other Receivables
(in thousands)
Changes in Fair Value Recorded in
Other Comprehensive Income
Level 2:
Commercial paper $ 3,842 $ — $ ( 1 ) $ 3,841 $ 500 $ 3,341 $ — $ —
Corporate notes/bonds 32,747 83 ( 10 ) 32,820 — 18,709 14,111 —
U.S. Treasury and Agency Securities
3,497 4 — 3,501 — 1,995 1,506 —
Total debt investments $ 40,086 $ 87 $ ( 11 ) $ 40,162 $ 500 $ 24,045 $ 15,617 $ —
Changes in Fair Value Recorded in
Net Income
Level 1:
Mutual funds (1)
$ 230,352 $ — $ 12,343 $ 218,009 $ —
Total equity investments $ 230,352 $ — $ 12,343 $ 218,009 $ —
Cash $ 704,091 $ 704,091 $ — $ — $ —
Money market funds 302,373 302,373 — — —
Level 2:
Foreign currency forward contracts 891 — — — 891
Total $ 1,277,869 $ 1,006,964 $ 36,388 $ 233,626 $ 891
___________________
(1) These investments are held in trust for settlement of the Company’s vested obligations of $ 217.7 million and $ 205.3 million as of October 31, 2025 and April 30, 2025, respectively, under the ECAP (see Note 6 — Deferred Compensation and Retirement Plans). 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. During the three and six months ended October 31, 2025, the fair value of the investments increased; therefore, the Company recognized a gain of $ 6.7 million and $ 19.0 million, respectively, which was recorded in other income, net. During the three and six months ended October 31, 2024, the fair value of the investments increased; therefore, the Company recognized a gain of $ 4.7 million and $ 18.9 million, respectively, which was recorded in other income, net.
As of October 31, 2025, available-for-sale marketable securities had remaining maturities ranging from less than 1 month to 24 months. During the three and six months ended October 31, 2025, there were $ 6.6 million and $ 15.4 million in sales/maturities of available-for-sale marketable securities, respectively. During the three and six months ended October 31, 2024, there were $ 9.9 million and $ 16.8 million in sales/maturities of available-for-sale marketable securities, respectively. Investments in marketable securities that are held in trust for settlement of the Company’s vested obligations under the ECAP are equity securities and are based upon the investment selections the employee elects from a pre-determined set of securities in the ECAP and the Company invests in equity securities to mirror these elections. As of October 31, 2025 and April 30, 2025, the Company’s investments in equity securities consisted of mutual funds for which market prices are readily available. Unrealized gains recorded for the period that relate to equity securities still held as of October 31, 2025 and 2024 were $ 13.6 million and $ 14.6 million, respectively.
14
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
Foreign Currency Forward Contracts Not Designated as Hedges
The fair value of derivatives not designated as hedge instruments are as follows:
October 31,
2025 April 30,
2025
(in thousands)
Derivative assets:
Foreign currency forward contracts $ 97 $ 2,486
Derivative liabilities:
Foreign currency forward contracts $ 797 $ 1,595
As of October 31, 2025, the total notional amounts of the forward contracts purchased and sold were $ 83.4 million and $ 24.4 million, respectively. As of April 30, 2025, the total notional amounts of the forward contracts purchased and sold were $ 74.7 million and $ 42.6 million, respectively. The Company recognizes forward contracts as a net asset or net liability on the condensed consolidated balance sheets as such contracts are covered by master netting agreements. During the three and six months ended October 31, 2025, the Company incurred losses of $ 1.6 million and $ 2.7 million, respectively, related to forward contracts which are recorded in general and administrative expenses in the accompanying condensed consolidated statements of income. During the three and six months ended October 31, 2024, the Company incurred losses of $ 0.2 million and $ 0.3 million, respectively, related to forward contracts which are recorded in general and administrative expenses in the accompanying condensed consolidated statements of income. These foreign currency losses related to forward contracts offset foreign currency gains that result from transactions denominated in a currency other than the Company’s functional currency. The cash flows related to foreign currency forward contracts are included in cash flows from operating activities.
6. Deferred Compensation and Retirement Plans
The Company has several deferred compensation and retirement plans for eligible consultants and vice presidents that provide defined benefits to participants based on the deferral of current compensation or contributions made by the Company subject to vesting and retirement or termination provisions. Among these plans is a defined benefit pension plan for certain employees in the U.S. The assets of this plan are held separately from the assets of the sponsor in self-administered funds. All other defined benefit obligations from other plans are unfunded.
The components of net periodic benefit costs are as follows:
Three Months Ended
October 31, Six Months Ended
October 31,
2025 2024 2025 2024
(in thousands)
Service cost $ 12,790 $ 11,825 $ 24,463 $ 22,480
Interest cost 3,939 4,513 7,823 8,964
Amortization of actuarial loss 127 32 254 64
Expected return on plan assets (1)
( 278 ) ( 266 ) ( 556 ) ( 532 )
Net periodic service credit amortization ( 101 ) ( 102 ) ( 202 ) ( 203 )
Net periodic benefit costs (2)
$ 16,477 $ 16,002 $ 31,782 $ 30,773
___________________
(1) The expected long-term rate of return on plan assets was 6.25 % and 6.00 % for October 31, 2025 and 2024, respectively.
(2) The service cost, interest cost and the other components of net periodic benefit costs are included in compensation and benefits expense, interest expense, net and other income, net, respectively, on the condensed consolidated statements of income.
15
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
The Company purchased company-owned life insurance ("COLI") contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of setting aside funds to cover such plans. The gross cash surrender value ("CSV") of these contracts of $ 343.8 million and $ 325.5 million as of October 31, 2025 and April 30, 2025, respectively, was offset by outstanding policy loans of $ 72.8 million in the accompanying condensed consolidated balance sheets as of both October 31, 2025 and April 30, 2025. The CSV value of the underlying COLI investments increased by $ 2.5 million and $ 5.1 million during the three and six months ended October 31, 2025, respectively, and was recorded as a decrease in compensation and benefits expense in the accompanying condensed consolidated statements of income. The CSV value of the underlying COLI investment increased by $ 2.5 million and $ 4.8 million during the three and six months ended October 31, 2024, respectively, and was recorded as a decrease in compensation and benefits expense in the accompanying condensed consolidated statements of income.
The Company’s ECAP is intended to provide certain employees an opportunity to defer their salary and/or bonus on a pre-tax basis. In addition, the Company, as part of its compensation philosophy, makes discretionary contributions into the ECAP and such contributions may be granted to key employees annually based on the employee’s performance. Certain key members of management may also receive Company ECAP contributions upon commencement of employment. The Company amortizes these contributions on a straight-line basis over the service period, generally a five-year period. Participants have the ability to allocate their deferrals among a number of investment options and may receive their benefits at termination, retirement or ‘in service’ either in a lump sum or in quarterly installments over one -to- 15 years. The ECAP amounts that are expected to be paid to employees over the next 12 months are classified as a current liability included in compensation and benefits payable on the accompanying condensed consolidated balance sheets.
The ECAP is accounted for whereby the changes in the fair value of the vested amounts owed to the participants are adjusted with a corresponding charge (or credit) to compensation and benefits costs. During the three and six months ended October 31, 2025, deferred compensation liability increased; therefore, the Company recognized an increase in compensation expense of $ 6.4 million and $ 18.4 million, respectively. Offsetting the increases in compensation and benefits expense was an increase in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $ 6.7 million and $ 19.0 million during the three and six months ended October 31, 2025, recorded in other income, net on the condensed consolidated statements of income. During the three and six months ended October 31, 2024, deferred compensation liability increased; therefore, the Company recognized an increase in compensation expense of $ 4.7 million and $ 18.2 million, respectively. Offsetting the increases in compensation and benefits expense was an increase in the fair value of marketable securities (held in trust to satisfy obligations of the ECAP liabilities) of $ 4.7 million and $ 18.9 million during the three and six months ended October 31, 2024, recorded in other income, net on the condensed consolidated statements of income (see Note 5—Financial Instruments).
7. Fee Revenue
Contract Balances
A contract asset (unbilled receivables) is recorded when the Company transfers control of products or services before there is an unconditional right to payment. A contract liability (deferred revenue) is recorded when cash is received in advance of performance of the obligation. Deferred revenue represents the future performance obligations to transfer control of products or services for which the Company has already received consideration. Deferred revenue is presented in other accrued liabilities on the condensed consolidated balance sheets.
The following table outlines the Company’s contract asset and liability balances as of October 31, 2025 and April 30, 2025:
October 31, 2025 April 30, 2025
(in thousands)
Contract assets-unbilled receivables $ 131,212 $ 113,743
Contract liabilities-deferred revenue $ 220,899 $ 245,379
During the six months ended October 31, 2025, the Company recognized revenue of $ 164.0 million that was included in the contract liabilities balance at the beginning of the period.
16
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
Performance Obligations
The Company has elected to apply the practical expedient to exclude the value of unsatisfied performance obligations for contracts with a duration of one year or less, which applies to all executive search, professional search and to most of the fee revenue from the interim business. As of October 31, 2025, the aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year at inception was $ 1,291.0 million. Of the $ 1,291.0 million of remaining performance obligations, the Company expects to recognize approximately $ 333.8 million in the remainder of fiscal 2026, $ 496.1 million in fiscal 2027, $ 269.6 million in fiscal 2028 and the remaining $ 191.5 million in fiscal 2029 and thereafter. However, this amount should not be considered an indication of the Company’s future revenue as contracts with an initial term of one year or less are not included. Further, the Company's contract terms and conditions allow for clients to increase or decrease the scope of services and such changes do not increase or decrease a performance obligation until the Company has an enforceable right to payment.
Disaggregation of Revenue
The Company disaggregates its revenue by Solution area and further by region for Executive Search. This information is presented in Note 10— Segments .
The following table provides further disaggregation of fee revenue by industry:
Three Months Ended October 31,
2025 2024
Dollars % Dollars %
(dollars in thousands)
Industrial $ 234,045 32.4 % $ 208,012 30.9 %
Financial Services
135,915 18.8 126,110 18.7
Life Sciences/Healthcare
119,114 16.5 112,598 16.7
Technology
104,473 14.5 96,017 14.2
Consumer Goods
84,953 11.8 88,498 13.1
Education/Non–Profit/General 43,199 6.0 43,130 6.4
Fee Revenue $ 721,699 100.0 % $ 674,365 100.0 %
Six Months Ended October 31,
2025 2024
Dollars % Dollars %
(dollars in thousands)
Industrial $ 452,883 31.7 % $ 406,784 30.1 %
Financial Services 272,354 19.0 251,247 18.6
Life Sciences/Healthcare 236,558 16.5 231,588 17.2
Technology
209,805 14.7 193,937 14.4
Consumer Goods
169,334 11.8 173,645 12.9
Education/Non–Profit/General 89,378 6.3 92,110 6.8
Fee Revenue $ 1,430,312 100.0 % $ 1,349,311 100.0 %
17
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
8. Credit Losses
The activity in the allowance for credit losses on the Company’s trade receivables is as follows:
(in thousands)
Balance at April 30, 2025 $ 40,461
Provision for credit losses 9,185
Write-offs ( 6,533 )
Recoveries of amounts previously written off 52
Foreign currency translation 253
Balance at October 31, 2025 $ 43,418
The fair value and unrealized losses on available for sale debt securities, aggregated by investment category and the length of time the security has been in an unrealized loss position as October 31, 2025 and April 30, 2025, are as follows:
Less Than 12 Months 12 Months or longer Balance Sheet Classification
Fair Value Unrealized Losses Fair Value Unrealized Losses Cash and Cash
Equivalent Marketable Securities,
Current Marketable
Securities, Non-
Current
(in thousands)
Balance at October 31, 2025
Corporate notes/bonds $ 8,213 $ 9 $ 2,095 $ 2 $ — $ 4,927 $ 5,381
U.S. Treasury and Agency Securities $ 799 $ 1 $ — $ — $ — $ — $ 799
Balance at April 30, 2025
Commercial paper $ 3,841 $ 1 $ — $ — $ 500 $ 3,341 $ —
Corporate notes/bonds $ 7,803 $ 10 $ — $ — $ — $ 4,630 $ 3,173
The Company only purchases high grade bonds that have a maturity from the date of purchase of no more than two years . The Company monitors the creditworthiness of its investments on a quarterly basis. The Company does not intend to sell the investments and does not believe it will be required to sell the investments before the investments mature and therefore recover the amortized cost basis.
9. Income Taxes
The provision for income tax was $ 26.6 million and $ 51.9 million in the three and six months ended October 31, 2025, with an effective tax rate of 26.6 % and 26.9 %, respectively, compared to $ 24.9 million and $ 47.3 million in the three and six months ended October 31, 2024, with an effective tax rate of 28.5 % and 27.2 %, respectively. The Company's 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 the Company's 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. The Company has 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.
10. Segments
The Company has eight reportable segments: Consulting, Digital, Executive Search North America, Executive Search EMEA, Executive Search APAC, Executive Search Latin America, Professional Search & Interim and RPO.
18
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
The Company's chief executive officer is the Company’s chief operating decision maker (“CODM”), who evaluates performance and allocates resources based on the review of the Company's 1) fee revenue and 2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such costs or 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 impairment charges). The CODM is not provided asset information by reportable segment, because asset information is not used for purposes of evaluating segment performance or allocating resources among segments.
Financial highlights by reportable segments are as follows:
Three Months Ended October 31, 2025
Executive Search
Consulting
Digital
North America
EMEA
Asia Pacific
Latin America
Professional Search & Interim
RPO
Corporate
Consolidated
(in thousands)
Fee revenue $ 172,841 $ 91,029 $ 142,105 $ 51,900 $ 24,131 $ 7,815 $ 141,099 $ 90,779 $ — $ 721,699
Total revenue $ 175,930 $ 91,237 $ 143,566 $ 52,212 $ 24,264 $ 7,819 $ 142,505 $ 92,267 $ — $ 729,800
Less
Compensation and benefits (1)
$ 118,494 $ 45,133 $ 96,689 $ 38,684 $ 16,549 $ 5,225 $ 50,806 $ 68,387 $ 20,742
General and administrative expenses (2)
13,303 10,467 7,142 4,358 2,204 937 4,785 4,781 16,180
Cost of services
11,710 7,165 907 160 171 34 55,587 3,353 —
Other segment items (3)
2,159 ( 260 ) ( 3,126 ) 239 21 ( 111 ) 1,126 1,526 ( 548 )
Segment Adjusted EBITDA
30,264 28,732 41,954 8,771 5,319 1,734 30,201 14,220 ( 36,374 ) 124,821
Reconciliation of Segment Adjusted EBITDA
Depreciation and amortization
31,573
Gain on modification of office lease
( 13,907 )
Interest expense, net
5,763
Integration/acquisition costs
1,325
Income tax provision
26,645
Net income attributable to noncontrolling interest
1,023
Net income attributable to Korn Ferry
$ 72,399
___________________
(1) Includes salaries and payroll taxes, employee insurance benefits, commissions, annual performance-related bonus expense, amortization of unearned compensation, stock-based compensation awards, changes in deferred compensation and pension plan liabilities and changes in CSV of COLI contracts. Excludes integration/acquisition costs as they are excluded from Adjusted EBITDA.
(2) Mainly includes premise and office expense, marketing and business development expense, bad debts, legal and other professional fees and foreign exchange gains/losses. Excludes Gain on modification of office lease as it is excluded from adjusted EBITDA.
(3) Includes reimbursed expenses and other income, net.
19
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
Three Months Ended October 31, 2024
Executive Search
Consulting
Digital
North America
EMEA
Asia Pacific
Latin America
Professional Search & Interim
RPO
Corporate
Consolidated
(in thousands)
Fee revenue $ 166,771 $ 92,893 $ 129,891 $ 46,788 $ 21,464 $ 7,856 $ 121,107 $ 87,595 $ — $ 674,365
Total revenue $ 169,384 $ 93,038 $ 131,419 $ 47,132 $ 21,540 $ 7,859 $ 121,988 $ 89,600 $ — $ 681,960
Less
Compensation and benefits (1)
$ 113,754 $ 45,632 $ 86,800 $ 35,068 $ 15,675 $ 4,811 $ 48,422 $ 67,688 $ 18,247
General and administrative expenses (2)
13,506 10,404 8,284 4,194 1,421 666 4,038 4,550 14,912
Cost of services
11,162 8,061 1,093 120 54 89 41,591 2,487 —
Other segment items (3)
1,856 ( 247 ) ( 1,665 ) 263 ( 42 ) ( 259 ) 734 1,976 ( 412 )
Segment Adjusted EBITDA
29,106 29,188 36,907 7,487 4,432 2,552 27,203 12,899 ( 32,747 ) 117,027
Reconciliation of Segment Adjusted EBITDA
Depreciation and amortization
19,688
Restructuring charges, net
576
Interest expense, net
5,626
Integration/acquisition costs
3,896
Income tax provision
24,898
Net income attributable to noncontrolling interest
1,543
Net income attributable to Korn Ferry
$ 60,800
___________________
(1) Includes salaries and payroll taxes, employee insurance benefits, commissions, annual performance-related bonus expense, amortization of unearned compensation, stock-based compensation awards, changes in deferred compensation and pension plan liabilities and changes in CSV of COLI contracts. Excludes integration/acquisition costs as they are excluded from Adjusted EBITDA.
(2) Mainly includes premise and office expense, marketing and business development expense, bad debts, legal and other professional fees and foreign exchange gains/losses. Excludes integration/acquisition costs as they are excluded from Adjusted EBITDA.
(3) Includes reimbursed expenses and other income, net.
20
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
Six Months Ended October 31, 2025
Executive Search
Consulting
Digital
North America
EMEA
Asia Pacific
Latin America
Professional Search & Interim
RPO
Corporate
Consolidated
(in thousands)
Fee revenue $ 342,803 $ 180,227 $ 281,759 $ 105,681 $ 48,832 $ 13,932 $ 275,000 $ 182,078 $ — $ 1,430,312
Total revenue $ 348,629 $ 180,482 $ 284,781 $ 106,293 $ 49,103 $ 13,958 $ 277,646 $ 184,451 $ — $ 1,445,343
Less
Compensation and benefits (1)
$ 235,683 $ 89,638 $ 196,178 $ 78,870 $ 33,660 $ 8,956 $ 99,389 $ 137,730 $ 40,508
General and administrative expenses (2)
26,285 20,441 14,092 8,778 4,300 1,869 9,911 9,228 33,127
Cost of services
24,117 15,038 1,767 289 338 94 108,084 6,554 —
Other segment items (3)
3,471 ( 974 ) ( 10,450 ) 442 ( 49 ) ( 235 ) 2,034 2,377 ( 1,412 )
Segment Adjusted EBITDA
59,073 56,339 83,194 17,914 10,854 3,274 58,228 28,562 ( 72,223 ) 245,215
Reconciliation of Segment Adjusted EBITDA
Depreciation and amortization
54,259
Gain on modification of office lease
( 13,907 )
Interest expense, net
9,279
Integration/acquisition costs
2,833
Income tax provision
51,895
Net income attributable to noncontrolling interest
1,821
Net income attributable to Korn Ferry
$ 139,035
___________________
(1) Includes salaries and payroll taxes, employee insurance benefits, commissions, annual performance-related bonus expense, amortization of unearned compensation, stock-based compensation awards, changes in deferred compensation and pension plan liabilities and changes in CSV of COLI contracts. Excludes integration/acquisition costs as they are excluded from Adjusted EBITDA.
(2) Mainly includes premise and office expense, marketing and business development expense, bad debts, legal and other professional fees and foreign exchange gains/losses. Excludes Gain on modification of office lease as it is excluded from adjusted EBITDA.
(3) Includes reimbursed expenses and other income, net.
21
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
Six Months Ended October 31, 2024
Executive Search
Consulting
Digital
North America
EMEA
Asia Pacific
Latin America
Professional Search & Interim
RPO
Corporate
Consolidated
(in thousands)
Fee revenue $ 334,641 $ 181,073 $ 264,643 $ 92,769 $ 42,043 $ 15,179 $ 242,848 $ 176,115 $ — $ 1,349,311
Total revenue $ 340,151 $ 181,249 $ 267,506 $ 93,408 $ 42,244 $ 15,185 $ 244,718 $ 180,260 $ — $ 1,364,721
Less
Compensation and benefits (1)
$ 228,418 $ 90,906 $ 187,991 $ 69,654 $ 30,067 $ 9,227 $ 96,558 $ 136,336 $ 37,639
General and administrative expenses (2)
26,366 19,539 15,930 8,305 3,579 829 9,251 9,215 28,960
Cost of services
23,679 15,969 2,152 220 208 143 84,646 5,184 —
Other segment items (3)
3,288 ( 976 ) ( 10,572 ) 477 ( 260 ) ( 364 ) 1,354 4,132 ( 1,565 )
Segment Adjusted EBITDA
58,400 55,811 72,005 14,752 8,650 5,350 52,909 25,393 ( 65,034 ) 228,236
Reconciliation of Segment Adjusted EBITDA
Depreciation and amortization
39,266
Restructuring charges, net
576
Interest expense, net
9,571
Integration/acquisition costs
4,972
Income tax provision
47,252
Net income attributable to noncontrolling interest
3,195
Net income attributable to Korn Ferry
$ 123,404
___________________
(1) Includes salaries and payroll taxes, employee insurance benefits, commissions, annual performance-related bonus expense, amortization of unearned compensation, stock-based compensation awards, changes in deferred compensation and pension plan liabilities and changes in CSV of COLI contracts. Excludes integration/acquisition costs as they are excluded from Adjusted EBITDA.
(2) Mainly includes premise and office expense, marketing and business development expense, bad debts, legal and other professional fees and foreign exchange gains/losses. Excludes integration/acquisition costs as they are excluded from Adjusted EBITDA.
(3) Includes reimbursed expenses and other income, net.
Depreciation and amortization by reportable segments are as follows:
Three Months Ended
October 31, Six Months Ended
October 31,
2025 2024 2025 2024
(in thousands)
Consulting
$ 3,514 $ 4,120 $ 7,159 $ 8,336
Digital
20,620 8,455 32,208 16,555
Executive Search:
North America
358 345 723 760
EMEA
511 461 1,067 954
Asia Pacific
237 233 478 449
Latin America
313 240 580 496
Professional Search & Interim
2,923 2,916 5,898 5,969
RPO
1,000 830 1,964 1,607
Corporate
2,097 2,088 4,182 4,140
Total depreciation and amortization
$ 31,573 $ 19,688 $ 54,259 $ 39,266
22
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
11. Long-Term Debt
4.625 % Senior Unsecured Notes due 2027
Long-term debt, net at amortized cost, consisted of the following:
In thousands October 31,
2025 April 30,
2025
Senior Unsecured Notes $ 400,000 $ 400,000
Less: Unamortized discount and issuance costs ( 1,855 ) ( 2,264 )
Long-term borrowings, net of unamortized discount and debt issuance costs $ 398,145 $ 397,736
Credit Facilities
The Company was party to a 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. The Prior Credit Agreement provided for a $ 650.0 million five-year senior secured revolving credit facility maturing June 24, 2027 (the “Prior Facility”).
On July 1, 2025, the Company 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 and other revolving commitments, as specified in the Credit Agreement (the “Facility”). The obligations under the Credit Agreement are secured by substantially all of the assets of the Company and those of its subsidiaries that are guarantors under the Credit Agreement. The Credit Agreement replaced the Prior Credit Agreement, and the Company repaid all outstanding obligations under the Prior Credit Agreement, and expenses and fees in connection therewith. Since the borrowing capacity under the new arrangement increased, the previously incurred unamortized and current debt issuance costs will be amortized over the life of the new arrangement.
The principal balance of the Facility, if any, is due at maturity. The Credit Agreement matures on July 1, 2030 and any unpaid principal balance is payable on this date. The Facility may also be prepaid and terminated early by the Company at any time without premium or penalty (subject to customary breakage fees).
Amounts outstanding under the Credit Agreement will bear interest at a rate equal to, at the Company’s election, either Term SOFR plus an interest rate margin between 1.125 % per annum and 2.00 % per annum, depending on the Company’s consolidated net leverage ratio, or base rate plus an interest rate margin between 0.125 % per annum and 1.00 % per annum, depending on the Company’s consolidated net leverage ratio. In addition, the Company will be required to pay to the lenders a quarterly commitment fee ranging from 0.175 % to 0.30 % per annum on the actual daily unused amount of the Facility based upon the Company’s consolidated net leverage ratio at such time, and fees relating to the issuance of letters of credit.
As of October 31, 2025 and April 30, 2025, there were no borrowings outstanding under the Facility or Prior Facility, respectively, and the Company was in compliance with its debt covenants. The unamortized debt issuance costs associated with the Credit Agreement were $ 4.0 million as of October 31, 2025 and $ 2.2 million under the Prior Credit Agreement as of April 30, 2025. The Company had a total of $ 845.6 million available under the Facility after $ 4.4 million of standby letters of credit were issued as of October 31, 2025. The Company had $ 645.6 million available under the Prior Credit Agreement after $ 4.4 million of standby letters of credit were issued as of April 30, 2025. 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 in connection with the entry into certain office premise leases.
12. Leases
The Company’s lease portfolio is comprised of operating leases for office space and equipment and finance leases for equipment. Equipment leases are comprised of vehicles and office equipment. During the three and six months ended October 31, 2025, at the request of a landlord, the Company modified an office lease to shorten the lease term and in return the landlord agreed to pay the Company a fixed cash incentive. As a result of the office lease modification the Company recorded a $ 13.9 million gain during the three and six months ended October 31, 2025 included in general and administrative expenses in the accompanying condensed consolidated statements of income.
23
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
The components of lease expense were as follows:
Three Months Ended
October 31, Six Months Ended
October 31,
2025 2024 2025 2024
(in thousands)
Finance lease cost
Amortization of ROU assets $ 437 $ 362 $ 836 $ 741
Interest on lease liabilities 51 45 95 94
488 407 931 835
Operating lease cost 12,334 12,096 24,719 24,091
Short-term lease cost 210 202 431 428
Variable lease cost 2,891 3,027 5,498 5,368
Gain on modification of office lease
( 13,907 ) — ( 13,907 ) —
Sublease income ( 1,545 ) ( 1,206 ) ( 3,178 ) ( 2,359 )
Total lease cost $ 471 $ 14,526 $ 14,494 $ 28,363
.
Supplemental cash flow information related to leases was as follows:
Six Months Ended
October 31,
2025 2024
(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 21,835 $ 24,597
Financing cash flows from finance leases $ 989 $ 815
ROU assets obtained in exchange for lease obligations:
Operating leases $ 6,690 $ 18,565
Finance leases $ 1,581 $ 217
Maturities of lease liabilities were as follows:
Year Ending April 30, Operating Financing
(in thousands)
2026 (excluding the six months ended October 31, 2025)
$ 21,484 $ 947
2027
33,202 1,560
2028
27,620 1,246
2029
21,303 276
2030
16,037 102
Thereafter 72,049 9
Total lease payments 191,695 4,140
Less: imputed interest 40,136 277
Total $ 151,559 $ 3,863
24
KORN FERRY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
October 31, 2025 (continued)
13. Subsequent Events
Quarterly Dividend Declaration
On December 8, 2025, the Board of Directors of the Company declared a cash dividend of $ 0.48 per share with a payment date of January 15, 2026 to holders of the Company’s common stock of record at the close of business on December 19, 2025. The declaration and payment of future dividends under the quarterly dividend policy will be at the discretion of the Board of Directors and will depend upon many factors, including the Company’s earnings, capital requirements, financial condition, the terms of the Company’s indebtedness and other factors that the Board of Directors may deem to be relevant. The Board of Directors may amend, revoke, or suspend the dividend policy at any time and for any reason.
25
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.
26
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.
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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.
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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)
Three Months Ended
October 31, Six Months Ended
October 31,
2025 2024 2025 2024
Fee revenue 100.0 % 100.0 % 100.0 % 100.0 %
Reimbursed out-of-pocket engagement expenses 1.1 1.1 1.1 1.1
Total revenue 101.1 101.1 101.1 101.1
Compensation and benefits 64.0 64.9 64.6 65.9
General and administrative expenses 7.0 9.6 8.0 9.2
Reimbursed expenses 1.1 1.1 1.1 1.1
Cost of services 11.0 9.6 10.9 9.8
Depreciation and amortization 4.4 2.9 3.8 2.9
Restructuring charges, net — 0.1 — —
Other income, net
1.0 0.8 1.4 1.5
Interest expense, net
0.8 0.9 0.6 0.7
Income tax provision
3.7 3.7 3.6 3.5
Net income 10.1 % 9.2 % 9.8 % 9.4 %
Net income attributable to Korn Ferry
10.0 % 9.0 % 9.7 % 9.1 %
The following tables summarize the results of our operations:
(Numbers may not total exactly due to rounding)
Three Months Ended
October 31, Six Months Ended
October 31,
2025 2024 2025 2024
Dollars % Dollars % Dollars % Dollars %
(dollars in thousands)
Fee revenue
Consulting $ 172,841 23.9 % $ 166,771 24.7 % $ 342,803 24.0 % $ 334,641 24.8 %
Digital 91,029 12.6 92,893 13.8 180,227 12.6 181,073 13.4
Executive Search:
North America 142,105 19.7 129,891 19.2 281,759 19.7 264,643 19.6
EMEA 51,900 7.2 46,788 6.9 105,681 7.4 92,769 6.9
Asia Pacific 24,131 3.3 21,464 3.2 48,832 3.4 42,043 3.1
Latin America 7,815 1.1 7,856 1.2 13,932 1.0 15,179 1.1
Total Executive Search 225,951 31.3 205,999 30.5 450,204 31.5 414,634 30.7
Professional Search & Interim 141,099 19.6 121,107 18.0 275,000 19.2 242,848 18.0
RPO 90,779 12.6 87,595 13.0 182,078 12.7 176,115 13.1
Total fee revenue 721,699 100.0 % 674,365 100.0 % 1,430,312 100.0 % 1,349,311 100.0 %
Reimbursed out-of-pocket engagement expense 8,101 7,595 15,031 15,410
Total revenue $ 729,800 $ 681,960 $ 1,445,343 $ 1,364,721
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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.
Three Months Ended
October 31,
2025 2024
Consolidated
(dollar in thousands)
Fee revenue $ 721,699 100.0 % $ 674,365 100.0 %
Total revenue $ 729,800 101.1 % $ 681,960 101.1 %
Net income attributable to Korn Ferry
$ 72,399 10.0 % $ 60,800 9.0 %
Net income attributable to noncontrolling interest 1,023 0.1 1,543 0.2
Interest expense, net 5,763 0.8 5,626 0.9
Income tax provision 26,645 3.7 24,898 3.7
Depreciation and amortization 31,573 4.4 19,688 2.9
Integration/acquisition costs 1,325 0.2 3,896 0.6
Gain on modification of office lease
(13,907) (1.9) — —
Restructuring charges, net — — 576 0.1
Adjusted EBITDA $ 124,821 17.3 % $ 117,027 17.4 %
Six Months Ended
October 31,
2025 2024
Consolidated
(dollar in thousands)
Fee revenue $ 1,430,312 100.0 % $ 1,349,311 100.0 %
Total revenue $ 1,445,343 101.1 % $ 1,364,721 101.1 %
Net income attributable to Korn Ferry
$ 139,035 9.7 % $ 123,404 9.1 %
Net income attributable to noncontrolling interest 1,821 0.1 3,195 0.3
Interest expense, net 9,279 0.7 9,571 0.7
Income tax provision 51,895 3.6 47,252 3.5
Depreciation and amortization 54,259 3.8 39,266 2.9
Integration/acquisition costs 2,833 0.2 4,972 0.4
Gain on modification of office lease
(13,907) (1.0) — —
Restructuring charges, net — — 576 —
Adjusted EBITDA $ 245,215 17.1 % $ 228,236 16.9 %
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Three Months Ended October 31,
2025 2024
(dollars in thousands)
Net income
attributable to
Korn Ferry
Net income
attributable to
Korn Ferry margin
Net income
attributable to
Korn Ferry
Net income
attributable to
Korn Ferry margin
Consolidated
$ 72,399 10.0 % $ 60,800 9.0 %
Fee revenue Total revenue Adjusted EBITDA Adjusted EBITDA margin Fee revenue Total revenue Adjusted EBITDA Adjusted EBITDA margin
Consulting $ 172,841 $ 175,930 $ 30,264 17.5 % $ 166,771 $ 169,384 $ 29,106 17.5 %
Digital 91,029 91,237 28,732 31.6 % 92,893 93,038 29,188 31.4 %
Executive Search:
North America 142,105 143,566 41,954 29.5 % 129,891 131,419 36,907 28.4 %
EMEA 51,900 52,212 8,771 16.9 % 46,788 47,132 7,487 16.0 %
Asia Pacific 24,131 24,264 5,319 22.0 % 21,464 21,540 4,432 20.6 %
Latin America 7,815 7,819 1,734 22.2 % 7,856 7,859 2,552 32.5 %
Total Executive Search 225,951 227,861 57,778 25.6 % 205,999 207,950 51,378 24.9 %
Professional Search & Interim 141,099 142,505 30,201 21.4 % 121,107 121,988 27,203 22.5 %
RPO 90,779 92,267 14,220 15.7 % 87,595 89,600 12,899 14.7 %
Corporate — — (36,374) — — (32,747)
Consolidated $ 721,699 $ 729,800 $ 124,821 17.3 % $ 674,365 $ 681,960 $ 117,027 17.4 %
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Six Months Ended October 31,
2025 2024
(dollars in thousands)
Net income
attributable to
Korn Ferry Net income
attributable to
Korn Ferry margin Net income
attributable to
Korn Ferry Net income
attributable to
Korn Ferry margin
Consolidated
$ 139,035 9.7 % $ 123,404 9.1 %
Fee revenue Total revenue Adjusted EBITDA Adjusted EBITDA margin Fee revenue Total revenue Adjusted EBITDA Adjusted EBITDA margin
Consulting $ 342,803 $ 348,629 $ 59,073 17.2 % $ 334,641 $ 340,151 $ 58,400 17.5 %
Digital 180,227 180,482 56,339 31.3 % 181,073 181,249 55,811 30.8 %
Executive Search:
North America 281,759 284,781 83,194 29.5 % 264,643 267,506 72,005 27.2 %
EMEA 105,681 106,293 17,914 17.0 % 92,769 93,408 14,752 15.9 %
Asia Pacific 48,832 49,103 10,854 22.2 % 42,043 42,244 8,650 20.6 %
Latin America 13,932 13,958 3,274 23.5 % 15,179 15,185 5,350 35.2 %
Total Executive Search 450,204 454,135 115,236 25.6 % 414,634 418,343 100,757 24.3 %
Professional Search & Interim 275,000 277,646 58,228 21.2 % 242,848 244,718 52,909 21.8 %
RPO 182,078 184,451 28,562 15.7 % 176,115 180,260 25,393 14.4 %
Corporate — — (72,223) — — (65,034)
Consolidated $ 1,430,312 $ 1,445,343 $ 245,215 17.1 % $ 1,349,311 $ 1,364,721 $ 228,236 16.9 %
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.
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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 revenu e 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 quar ter. 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.
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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.
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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.
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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.
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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.
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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.
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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 Expens e
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.
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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.
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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.
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