Korn Ferry Reports Strong Q1 FY'26 Results: Growth Across Segments
Korn Ferry, a leading global consulting firm specializing in talent management and organizational performance, has released its earnings report for the first quarter of fiscal year 2026 (Q1 FY'26). The firm reported impressive growth in revenue, net income, and other key financial metrics, signaling a robust start to the fiscal year. This article analyzes the financial performance of Korn Ferry, highlights key segments driving growth, and discusses strategic initiatives that have further strengthened its market position.
1. Executive Summary
In Q1 FY'26, Korn Ferry achieved a fee revenue of $708.6 million, marking a 5% year-over-year increase from the $674.9 million reported in Q1 FY'25. The company's net income attributable to Korn Ferry rose to $66.6 million, a 6% increase from the prior year. Adjusted EBITDA also showed positive momentum, increasing by 8% to $120.4 million. The growth was driven by strong performance in the Executive Search and Professional Search & Interim segments, highlighting Korn Ferry's ability to adapt to evolving client needs.
| Sep 2024 | Sep 2025 | |
|---|---|---|
Net Income | 185.1M | 250.0M |
Net Income to Non-controlling Interest | 4.47M | 4.16M |
Profit | 189.6M | 254.2M |
Net Income Continuing | 189.6M | 254.2M |
Income Tax Expense | 54.01M | 96.73M |
Pretax Income | 243.6M | 350.9M |
Non-operating Income | 11.43M | -2.73M |
Operating Income | 232.2M | 353.7M |
Revenue | 2.77B | 2.79B |
Costs and Expenses | 2.53B | 2.44B |
Cost of Revenue | 323.9M | 324.8M |
Operating Expenses | 2.21B | 2.11B |
Depreciation, Depletion & Amortization | 78.53M | 83.39M |
Restructuring Charge | 68.13M | 1.89M |
Selling, General & Administrative | 2.06B | 2.03B |
2. Performance Highlights for Q1 FY'26
Fee Revenue Breakdown
Korn Ferry's diversified service offerings contributed significantly to its revenue growth, with the following notable performance across different segments:
- Executive Search: Generated $224.3 million in fee revenue, reflecting an 8% increase.
- Professional Search & Interim: Increased by 10% to $133.9 million, driven largely by the acquisition of Trilogy International.
- Consulting: Reported a modest increase of 1% to $170.0 million.
- Digital Services: Slightly rose to $89.2 million.
- RPO (Recruitment Process Outsourcing): Grew by 3% to $91.3 million, supported by new client acquisitions in North America.
Regional Performance
Regionally, Korn Ferry experienced substantial growth in various markets:
- North America: Executive Search revenue totaled $139.7 million, a 4% increase.
- EMEA (Europe, the Middle East, and Africa): Showed a remarkable 17% increase to $53.8 million.
- Asia Pacific: Saw a significant growth of 20%, reaching $24.7 million.
- Latin America: However, this region reported a 16% decrease, generating $6.1 million.
| Sep 2024 | Sep 2025 | |
|---|---|---|
Total Assets | 3.44B | 3.63B |
Total Current Assets | 1.41B | 1.49B |
Cash and Equivalents | 633.3M | 684.8M |
Short-term Investments | 40.62M | 36.27M |
Accounts Receivable | 573.0M | 600.3M |
Prepaid Expenses | 56.47M | 58.31M |
Other Current Assets | 111.9M | 111.0M |
Total Non-current Assets | 2.03B | 2.13B |
Intangible Assets | 991.0M | 1.01B |
Long-term Investments | 253.5M | 271.6M |
Non-current Deferred Tax Assets | 124.1M | 139.2M |
Net PP&E | 159.5M | 179.4M |
Lease Assets | 155.8M | 143.2M |
Other Non-current Assets | 347.8M | 393.3M |
Total Liabilities and Equity | 3.44B | 3.63B |
Total Liabilities | 1.68B | 1.73B |
Total Current Liabilities | 658.0M | 674.4M |
Accounts Payable and Accrued Liabilities | 622.0M | 638.0M |
Current Debt | 35.93M | 36.31M |
Total Non-current Liabilities | 1.03B | 1.05B |
Long-term Debt | 397.1M | 397.9M |
Non-current Deferred Tax Liabilities | 4.17M | 6.73M |
Other Non-current Liabilities | 628.9M | 652.7M |
Total Equity and Non-controlling Interests | 1.75B | 1.89B |
Total Equity | 1.75B | 1.89B |
Non-controlling Interests | 5.40M | 6.72M |
3. Cost Structure and Expenses
Compensation and Benefits
Korn Ferry's compensation and benefits expenses rose by 2% to $461.4 million, influenced by increased severance-related costs and higher salaries. The increase was partially mitigated by a reduction in performance-related bonuses.
General and Administrative Expenses
General and administrative expenses climbed by 7% to $63.9 million, primarily due to escalated legal and professional fees.
Cost of Services Expense
The cost of services expense surged by 14%, totaling $77.2 million, largely driven by increased activity in the Professional Search & Interim segment.
Depreciation and Amortization
Depreciation and amortization expenses saw a significant increase of 16%, reaching $22.7 million, largely due to accelerated depreciation related to the transition to the Korn Ferry Talent Suite platform.
4. Financial Position and Liquidity
Korn Ferry ended the quarter with a strong liquidity position, holding $963.3 million in cash and cash equivalents. The firm has strategically positioned itself for future growth by entering into a new Credit Agreement that provides an $850 million revolving credit facility. Total assets as of July 31, 2025, stood at $3.63 billion, with total liabilities amounting to $1.73 billion, reflecting a solid balance sheet.
| Sep 2024 | Sep 2025 | |
|---|---|---|
Net Change in Cash | 71.16M | 51.47M |
Effect of Exchange Rate Changes | -16.30M | 14.44M |
Net Cash from Operating Activities | 331.2M | 354.1M |
Operating Profit | 189.6M | 254.2M |
Adjustment to Operating Profit | 141.6M | 99.92M |
Net Cash from Investing Activities | -92.00M | -130.9M |
Business & Interest in Affiliates | 0 | 44.44M |
Investments | 20.60M | -9.21M |
Productive Assets | 49.98M | 74.58M |
Other Investing Activities | -21.41M | -21.12M |
Net Cash from Financing Activities | -151.7M | -186.2M |
Debt | -1.92M | -5.84M |
Dividends | 69.06M | 93.07M |
Equity Issuance/Repurchase | -63.61M | -67.85M |
Other Financing Activities | -17.18M | -19.43M |
5. Strategic Initiatives and Acquisitions
The acquisition of Trilogy International, effective November 1, 2024, has been pivotal in enhancing Korn Ferry’s Professional Search & Interim capabilities. This strategic move has not only bolstered revenue but also expanded the firm's service portfolio.
6. Conclusion
Korn Ferry's performance in Q1 FY'26 illustrates its resilience and capacity for growth in a competitive landscape. The firm continues to leverage its extensive data assets and behavioral science expertise to provide integrated solutions that address clients' performance challenges. As Korn Ferry navigates through changing market conditions, its commitment to delivering value to clients and shareholders remains steadfast, setting a promising outlook for the remainder of the fiscal year.
Korn Ferry's recognition as America’s Best Executive Recruiter by Forbes Magazine further underscores its standing in the industry, reinforcing confidence among investors and stakeholders alike.
