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KFY
Earnings call · Jul 2026 (Q1 FY27)

KORN FERRY Q1 FY27 earnings call KFY

Sep 9, 2026 Source

Executive summary

Korn Ferry Q1 FY27 — Sixth Consecutive Quarter of Growth and AMS Integration

Korn Ferry delivered its sixth consecutive quarter of top-line growth, driven by strong performance in Search and Workforce Solutions, and robust earnings. The recent completion of the AMS acquisition significantly expands the firm's capabilities and backlog, positioning it as a global leader in talent and organizational consulting. Management is focused on revenue synergies and operational excellence, despite ongoing macroeconomic challenges and geopolitical conditions impacting regional performance.

Highlights

5

  • Fee revenue grew 7% year-over-year to $756 million, marking the sixth consecutive quarter of top-line growth.

  • Adjusted EBITDA grew 7% year-over-year to $128 million.

  • Adjusted diluted EPS grew 9% year-over-year to $1.43.

  • Estimated remaining fees under existing contracts (backlog) grew 14% year-over-year to $1.92 billion, with a combined backlog of $3.5 billion including AMS.

  • Internal business referral rate increased to 29.4% of consolidated fee revenue, up 300 basis points year-over-year.

Concerns

3

  • EMEA results were impacted by Middle East conflict.

  • APAC fee revenue growth was only 1% year-over-year, impacted by socioeconomic changes, particularly in China.

  • Management noted that growth is "very, very hard to come by for most companies" due to rising interest rates.

Guidance & targets

CategoryTargetConfidence
Second Quarter FY27 Fee Revenue
$860 million to $878 million
high materiality
High
Second Quarter FY27 Adjusted EBITDA Margin
16.8% to 17.2%
medium materiality
High
Second Quarter FY27 Adjusted Diluted Earnings Per Share
$1.30 to $1.40 per share
high materiality
High
AMS Incremental Run Rate EBITDA
$40 million
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Americas
Led by growth in Search and Workforce Solutions.
$442 million9%——
EMEA
Growth was broad-based with strength in all solution groups. Impacted by Middle East conflict.
$228 million4%——
APAC
Inflected to growth in the first quarter, led by Search. Impacted by socioeconomic changes, particularly in China.
$87 million1%——

KFY operating KPIs by quarter

KFY operating KPIs stated on its earnings calls, by fiscal quarter
KPI Jan 2026 Q3 FY26 Apr 2026 Q4 FY26This call Jul 2026 Q1 FY27Change vs prior quarter
Clients
10K+ We've got more than 10,000 clients around the world, but 4,500 of those represent 90% of our revenue. Source transcript
<14K And so my starting point rather than org structure has been on mindset, mindset of our leaders and mindset of the organization because the fact is when you look at the data, we do business with almost 14,000 clients around the world. Source transcript
——
Backlog
$1.85B Estimated remaining fees under existing contracts at the end of the quarter were $1.85 billion. Source transcript
<$1.9B So for Q4, our ending estimated remaining fees under existing contracts grew 10% year-over-year to almost $1.9 billion with growth in every solution. Source transcript
$1.92B As previously mentioned, our estimated remaining fees under existing contracts were $1.92 billion at the end of the quarter. Source transcript
—
Orders RPO
$54M RPO delivered $54 million of new business in the quarter with 78% coming from new logos and 22% from renewals. Source transcript
$137M The RPO business itself won $137 million of new business in the fourth quarter and 74% of that came from new logos. Source transcript
—+153.7%
New business from new logos share RPO
78% RPO delivered $54 million of new business in the quarter with 78% coming from new logos and 22% from renewals. Source transcript
74% The RPO business itself won $137 million of new business in the fourth quarter and 74% of that came from new logos. Source transcript
50% And in this quarter, the RPO new wins were something like $160 million, 50% of those were from new logos. Source transcript
-24 pt

Operating figures the company states on every call, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Estimated remaining fees under existing contracts (Korn Ferry only) $1.92 billion Q1 FY27 end

14% YoY growth

56% ($1.1 billion) expected to be recognized within the next 4 quarters; 44% ($835 million) beyond next year.

Combined backlog (Korn Ferry + AMS) $3.5 billion Q1 FY27 end

AMS backlog: 40% within the first year, 60% over the next 4 years. Provides much more durability and visibility.

Deals & partnerships

AMS Combination of two iconic brands to create a global leader in talent and organizational consulting, expanding capabilities in RPO, interim, contingent workforce solutions, and early career recruiting.

Brings together nearly 17,000 colleagues in 130+ offices. AMS has a substantial backlog of multi-year contracts and long-tenured client relationships (average 14 years for top 10 clients). Complementary industry coverage (AMS heavy in financial services). Integration targeting May 1, 2027, for common platform (SAP, CRM). Pre-integration planning included mapping top 100 customers and putting teams against them.

Risks & headwinds

Challenging macroeconomic environment Near-term outlook

Growth is "very, very hard to come by for most companies if they're not building data centers or in the AI area."

Mitigation:Focus on "Wear Korn Ferry" strategy, leveraging IP and data, and strategic acquisitions like AMS.

Rising interest rates Ongoing

"the question of raising rates. I mean it's -- that's a real issue."

Mitigation:Disciplined balanced approach to capital allocation, including potential debt reduction associated with AMS acquisition.

Geopolitical conditions Ongoing

Impacted EMEA results; APAC fee revenue growth only 1% due to socioeconomic changes, particularly in China.

Mitigation:Diversified geographic presence and client-centric approach.

What to watch in Q2 FY27

AMS incremental EBITDA realization

Within a year of close (expected faster)
Current $0 (incremental from close)
Target Progress towards $40M incremental EBITDA

Why it matters

Verifies the financial benefits and integration success of the AMS acquisition, which is a key growth driver.

Will we hit that $40 million? We will absolutely hit that. Will we hit it before 1 year, we absolutely will.

Q&A highlights

How should investors think about growth rates in the new geographic segments going forward?

Gary Burnison emphasized looking at the firm's overall historical growth rate (10-12%, 60% organic/40% inorganic, now 50/50 with AMS). He noted regional differences, with APAC impacted by socioeconomic changes, EMEA strengthening, and Americas steady. Workforce Solutions and Search showed outstanding growth.

“I look at the firm overall over the last 10 years, 20 years, and you'd find a growth rate that's probably going to be around 10%, 11%, 12%, something like that.”

asked by Tyler Barishaw · answered by Gary Burnison

2 min read 5 chapters

Detailed narrative

Strategic Evolution and AMS Acquisition

Korn Ferry completed its combination with AMS, creating a global leader in talent and organizational consulting with nearly 17,000 colleagues across 130+ offices. This acquisition significantly expands the firm's capabilities, particularly in RPO, interim, contingent workforce solutions, and early career recruiting, aligning with Korn Ferry's strategy to be a "world conductor of talent and organizational orchestration." The combined entity offers one of the most comprehensive organizational talent solution portfolios globally, with complementary strengths and expanded industry coverage.

New Reporting Structure and Go-to-Market Strategy

The company transitioned to a new reporting structure with three geographic segments (Americas, EMEA, APAC) and three solution groupings (Search, Talent & Organizational Solutions, Workforce Solutions). This change reflects a "Wear Korn Ferry" go-to-market initiative aimed at driving deeper, more durable client relationships and fee revenue synergies. The internal business referral rate increased to 29.4% of consolidated fee revenue, up 300 basis points year-over-year, demonstrating the effectiveness of this client-centric approach.

Impact of AI and Proprietary Data

Management discussed the increasing role of AI in the talent industry, noting that while AI can make it easier to find candidates, Korn Ferry's proprietary data is crucial for understanding "who people are" beyond their resumes. This includes compensation data on 30 million people, 113 million executive assessments, and 15,000 success profiles. This unique IP and skill set are seen as a differentiator, increasing demand for their services, and potentially leading to increased pricing, unlike the impact of LinkedIn in the past.

Backlog and Client Relationships

The combined firm now boasts a $3.5 billion backlog, with AMS contributing a substantial portion of multi-year contracts and long-tenured client relationships. The average tenure for AMS's top 10 client relationships is 14 years. This significant backlog provides increased durability, visibility, and resilience for future revenue recognition, with 56% of Korn Ferry's standalone backlog ($1.1 billion) expected to be recognized within the next four quarters, and 40% of AMS's backlog within the first year.

Macroeconomic Environment and Demographic Trends

The company acknowledged a challenging macroeconomic environment due to rising interest rates and geopolitical conflicts, which have impacted regional performance, particularly in APAC and EMEA. However, they highlighted significant demographic opportunities driven by a supply-demand imbalance in the labor market. With baby boomers retiring and slower job growth projections (5-6 million jobs over the next decade in the U.S. compared to 25 million previously), the need for effective talent solutions is increasing.

AI-generated summary of the company's earnings call. Not investment advice.