Korn Ferry Q4 FY2025 earnings call

• Gary Burnison stated execution has been outstanding, strategy is working, and the firm continues to deliver on financial and strategic objectives. Mentioned transformative client engagements across industries and the firm's IP with billions of data points. • Bob Rozek highlighted Q4 exceeded expectations, Marquee and Diamond accounts at 39% of consolidated fee revenue, cross-solution referrals at 26% of consolidated fee revenue, Executive search up 15% year over year at constant currency, Digital new business growth, RPO new awards, adjusted EBITDA and EPS growth, estimated remaining fees under existing contracts at $1.7 billion (with $977 million to be recognized in next year and $734 million beyond next four quarters), and regional fee revenue details. • Balanced capital allocation with $173 million returned to shareholders in fiscal 2025 through share repurchases and dividends, $44 million in M&A, and $62 million in capital expenditures.

Consolidated fee revenue for the fourth quarter was $712 million, growing 4% year over year at constant currency. Adjusted EBITDA grew 8% to $121 million, with an adjusted EBITDA margin of 17% (up 70 basis points). New business was up 3% year over year at constant currency. Marquee and Diamond accounts represented almost 40% of fee revenue. By region: The Americas fee revenue was essentially flat at constant currency; EMEA fee revenue grew 9% at constant currency; APAC fee revenue grew 8% at constant currency. In solutions: Executive search grew 15% year over year at constant currency; Digital subscription and license new business in the fourth quarter grew to 40% of total digital new business (up from 37% prior year); RPO had $119 million of new business awards, with 77% attributed to new logos.

• For the first quarter of fiscal 2026, assuming no further changes in geopolitical, economic, financial market, and foreign exchange rates, fee revenue is expected to range from $675 million to $695 million. • Adjusted EBITDA margin is expected to range from approximately 16.8% to 17.2%. • Consolidated adjusted diluted earnings per share is expected to range from 1.18 to 1.26. • GAAP diluted earnings per share is expected to range from $1.16 to 1.24.

• Uncertainties related to worldwide geopolitical conditions, economic conditions, financial markets, and foreign exchange rates which could materially affect actual results. • Cost of living crisis impacting client spending and business confidence. • Low employee turnover in the labor market, which can affect labor market dynamism and is not ideal from multiple dimensions.

Q: Trevor Romeo asked about new business trends and revenue trends by month, especially in light of recent events like tariff announcements.

A: Gary Burnison responded that conversations ebb and flow, with May being stronger than April, April about same as March, and February pretty good, noting the firm has performed impressively in a market considered a recession for the last seven quarters.

Q: George Tong inquired about sales cycles and client spending behaviors across segments.

A: Gary Burnison mentioned the cost of living crisis and companies cutting costs for seven quarters, and Bob Rozek added details on new business in consulting and digital, with consulting engagements getting bigger and digital new business consistent.

Q: Mark Marcon asked about the fourth release of the talent suite, Executive Search productivity, and international growth.

A: Gary Burnison talked about the talent suite's potential for seamless user experience across workforce dimensions, and Bob Rozek confirmed growth in Executive Search and details on productivity and international growth.

Q: Tobey Sommer asked about labor market turnover and headcount productivity.

A: Gary Burnison discussed low employee turnover due to anemic labor market and Bob Rozek mentioned corporate cost perspective with common systems and processes across the globe.

Q: Josh Chan asked about Exact Search acceleration and Q1 guidance.

A: Bob Rozek stated the Q1 guide anticipates continued growth on a year-over-year basis for Exact Search and other areas