Korn Ferry
06/26/2026 | Press release | Distributed by Public on 06/26/2026 14:33
Annual Report for Fiscal Year Ending April 30, 2026 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Annual Report on Form 10-K 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 use 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 this Annual Report on Form 10-K. Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included in this Annual Report on Form 10-K are made only as of the date of this Annual Report on Form 10-K, 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 consolidated financial statements and related notes included in this Annual Report on Form 10-K. 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 individual and business performance. The impact we create spans entire organizations, but it always starts with people.
In every market cycle and every technology shift, strategy sets direction, but people make it happen. They lead, adapt, innovate and execute the work that moves organizations forward.
For more than 50 years, we studied how people and organizations perform. With decades of workforce intelligence and real-world experience, we've built a deep understanding of what drives organizational success, what gets in the way and what needs to change. We put that insight into practice every day.
Korn Ferry works across the full organization-from strategy and leadership to hiring, development, rewards and the roles, skills and workforce models needed for the future. While many firms address individual parts of that system, we look across and connect them. By aligning leaders, teams, and organizations around a common definition of success, we help organizations make better decisions, execute with confidence and achieve stronger outcomes.
Our business is organized around three connected elements: Foundational Assets, Capabilities, and Integrated Solutions. Together, they allow us to apply what we know, deploy the right expertise and combine capabilities to address high-priority business challenges.
Our Foundational Assets are the proprietary data, science and IP that inform our work and help clients make better people and organizational decisions.
Our Capabilities are the areas of expertise we bring to clients.
•Organization Strategy: Aligning people, processes, structures and operating models to support business goals.
•Assessment & Succession: Evaluating potential, readiness and fit to guide hiring, promotion, mobility and succession decisions.
•Talent Acquisition: Sourcing and hiring talent across all levels through executive search, professional recruiting, interim talent and Recruitment Process Outsourcing ("RPO").
•Leadership & Professional Development: Developing leaders and building critical skills through coaching, experiential learning and scalable digital programs.
•Total Rewards: Designing compensation, benefits, recognition and pay transparency strategies that support performance and reflect evolving regulatory and business priorities.
•Board and Chief Executive Officer ("CEO") Services: Advising boards and CEOs on leadership transitions, governance, succession and long-term planning.
Our Integrated Solutions combine multiple Capabilities to address high-priority business challenges.
Korn Ferry serves clients through strategic account partnerships and flexible engagement models tailored to client needs. Core to this 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 portfolio. This model supports consistent delivery, a deeper understanding of client priorities and broader access to the firm's capabilities. As of fiscal year-end 2026, our 350 Marquee and Diamond accounts represented approximately 40% of consolidated fee revenue-more than double their contribution at the Program's inception.
Korn Ferry delivers services through five solution areas. These solutions reflect the breadth of our expertise and correspond to eight reportable segments supported by centralized corporate functions that help connect expertise, intelligence and delivery across the firm, driving alignment, connectivity and scale. 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 develops and manages the technology, data, platform, and AI capabilities that power Talent Suite and help us unlock the value of our Foundational Assets. Working closely with our Solution teams, Digital enables consultants and clients to access and apply our insights through embedded and subscription-based offerings.
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.
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.
Performance Highlights in fiscal 2026 include:
▪Fee revenue was $2,907.5 million, an increase of 7% year-over-year, led by Professional Search & Interim, Executive Search and Consulting.
▪Net income attributable to Korn Ferry was $277.4 million, with a margin of 9.5%, an increase of 50 basis points ("bps") compared to the year-ago period.
▪Adjusted EBITDA was $497.8 million in fiscal 2026, with a margin of 17.1%.
▪Diluted earnings per share was $5.22 in fiscal 2026.
▪Our fiscal 2026 Marquee and Diamond Accounts fee revenue generated approximately 40% of our consolidated fee revenue and grew 8% compared to fiscal year 2025.
▪We have built strong client loyalty, with approximately 82% of the assignments performed during fiscal 2026 having been on behalf of clients for whom we had conducted assignments in the previous three fiscal years.
▪More than 75% of our fee revenues were generated from clients that have utilized multiple solutions.
▪Approximately 80% of the executive searches we performed in fiscal 2026 were for board level, chief executive and other senior executive and general management positions. Our more than 3,700 search engagement clients in fiscal 2026 included many of the world's largest and most prestigious public and private companies.
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 impairment charges). For fiscal 2026, Adjusted EBITDA excluded $4.4 million of integration/acquisition costs and $13.9 million of gain on the modification of an office lease. For fiscal 2025, Adjusted EBITDA excluded $8.8 million of integration/acquisition costs, $4.6 million of management separation charges due to contractual obligations upon an executive's death, $2.5 million of impairment of right-of-use assets, $1.9 million of restructuring charges, net, and $0.5 million of impairment of fixed assets. For fiscal 2024, Adjusted EBITDA excluded $68.6 million of restructuring charges, net, $14.9 million of integration/acquisition costs, $1.6 million impairment of right-of-use assets and $1.6 million impairment of fixed assets.
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 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.
Critical Accounting Policies
The following discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements. Preparation of our periodic filings requires us to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates and assumptions and changes in the estimates are reported in current operations as new information is learned or upon the amounts becoming fixed and determinable. In preparing our consolidated financial statements and accounting for the underlying transactions and balances, we apply our accounting policies as disclosed in the notes to our consolidated financial statements. We consider the policies discussed below as critical to an understanding of our consolidated financial statements because their application places the most significant demands on management's judgment and estimates. Specific risks for these critical accounting policies are described in the following paragraphs. Senior management has discussed the development, selection and key assumptions of the critical accounting estimates with the Audit Committee of the Board of Directors.
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.
Revenue is recognized when control of the goods and services is transferred to the customer in an amount that reflects the consideration we expect 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, we accrue or defer 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 we have a legally enforceable right to payment. Revenue also comes from the sale of our 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.
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, we estimate 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. We generally recognize such revenue over the course of a search and when we are 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. We recognize 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.
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)
| Year Ended April 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Fee revenue | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
| Reimbursed out-of-pocket engagement expenses | 1.1 | 1.1 | 1.2 | ||||||||||||||
| Total revenue | 101.1 | 101.1 | 101.2 | ||||||||||||||
| Compensation and benefits | 64.2 | 64.4 | 66.8 | ||||||||||||||
| General and administrative expenses | 8.5 | 9.5 | 9.4 | ||||||||||||||
| Reimbursed expenses | 1.1 | 1.1 | 1.2 | ||||||||||||||
| Cost of services | 11.0 | 10.4 | 10.9 | ||||||||||||||
| Depreciation and amortization | 3.4 | 2.9 | 2.8 | ||||||||||||||
| Restructuring charges, net | - | 0.1 | 2.5 | ||||||||||||||
|
Other Income, net
|
1.2 | 0.7 | 1.1 | ||||||||||||||
|
Interest expense, net
|
0.7 | 0.8 | 0.8 | ||||||||||||||
|
Income tax provision
|
3.7 | 3.4 | 1.8 | ||||||||||||||
| Net income | 9.7 | % | 9.2 | % | 6.2 | % | |||||||||||
| Net income attributable to Korn Ferry | 9.5 | % | 9.0 | % | 6.1 | % | |||||||||||
The following tables summarize the results of our operations:
(Numbers may not total exactly due to rounding)
| Year Ended April 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||||||||||||||||||||
| Dollars | % | Dollars | % | Dollars | % | ||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Fee revenue | |||||||||||||||||||||||||||||||||||
| Consulting | $ | 691,654 | 23.8 | % | $ | 662,708 | 24.3 | % | $ | 695,007 | 25.1 | % | |||||||||||||||||||||||
| Digital | 363,523 | 12.5 | 363,530 | 13.3 | 366,699 | 13.3 | |||||||||||||||||||||||||||||
| Executive Search: | |||||||||||||||||||||||||||||||||||
| North America | 583,394 | 20.0 | 535,921 | 19.6 | 506,927 | 18.4 | |||||||||||||||||||||||||||||
| EMEA | 215,134 | 7.4 | 194,088 | 7.1 | 184,516 | 6.7 | |||||||||||||||||||||||||||||
| Asia Pacific | 97,527 | 3.4 | 87,337 | 3.2 | 85,863 | 3.1 | |||||||||||||||||||||||||||||
| Latin America | 28,049 | 1.0 | 28,862 | 1.1 | 28,937 | 1.0 | |||||||||||||||||||||||||||||
| Total Executive Search | 924,104 | 31.8 | 846,208 | 31.0 | 806,243 | 29.2 | |||||||||||||||||||||||||||||
| Professional Search & Interim | 561,077 | 19.3 | 503,515 | 18.4 | 540,615 | 19.6 | |||||||||||||||||||||||||||||
| RPO | 367,111 | 12.6 | 354,127 | 13.0 | 354,107 | 12.8 | |||||||||||||||||||||||||||||
| Total fee revenue | 2,907,469 | 100.0 | % | 2,730,088 | 100.0 | % | 2,762,671 | 100.0 | % | ||||||||||||||||||||||||||
| Reimbursed out-of-pocket engagement expense | 31,172 | 30,998 | 32,834 | ||||||||||||||||||||||||||||||||
| Total revenue | $ | 2,938,641 | $ | 2,761,086 | $ | 2,795,505 | |||||||||||||||||||||||||||||
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 solutions areas and are financial metrics used by the Company's investor base.
| Year Ended April 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||||||||||||||||||||
| Consolidated | |||||||||||||||||||||||||||||||||||
|
(dollars in thousands)
|
|||||||||||||||||||||||||||||||||||
| Fee revenue | $ | 2,907,469 | 100.0 | % | $ | 2,730,088 | 100.0 | % | $ | 2,762,671 | 100.0 | % | |||||||||||||||||||||||
| Total revenue | $ | 2,938,641 | 101.1 | % | $ | 2,761,086 | 101.1 | % | $ | 2,795,505 | 101.2 | % | |||||||||||||||||||||||
| Net income attributable to Korn Ferry | $ | 277,434 | 9.5 | % | $ | 246,062 | 9.0 | % | $ | 169,154 | 6.1 | % | |||||||||||||||||||||||
| Net income attributable to noncontrolling interest | 3,386 | 0.1 | 5,014 | 0.2 | 3,407 | 0.1 | |||||||||||||||||||||||||||||
| Interest expense, net | 19,998 | 0.7 | 20,363 | 0.8 | 20,968 | 0.8 | |||||||||||||||||||||||||||||
| Income tax provision | 107,630 | 3.7 | 93,836 | 3.4 | 50,081 | 1.8 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 98,844 | 3.4 | 80,287 | 2.9 | 77,966 | 2.8 | |||||||||||||||||||||||||||||
| Integration/acquisition costs | 4,420 | 0.2 | 8,837 | 0.3 | 14,866 | 0.5 | |||||||||||||||||||||||||||||
| Management separation charges | - | - | 4,614 | 0.2 | - | - | |||||||||||||||||||||||||||||
| Restructuring charges, net | - | - | 1,892 | 0.1 | 68,558 | 2.5 | |||||||||||||||||||||||||||||
| Impairment of fixed assets | - | - | 509 | 0.0 | 1,575 | 0.1 | |||||||||||||||||||||||||||||
| Impairment of right-of-use assets | - | - | 2,452 | 0.1 | 1,629 | 0.1 | |||||||||||||||||||||||||||||
|
Gain on modification of office lease
|
(13,907) | (0.5) | - | - | - | - | |||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 497,805 | 17.1 | % | $ | 463,866 | 17.0 | % | $ | 408,204 | 14.8 | % | |||||||||||||||||||||||
| Year Ended April 30, 2026 | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
|
Net income attributable to Korn Ferry
|
Net income attributable to Korn Ferry margin
|
|||||||||||||||||||||||||
|
Consolidated
|
$ | 277,434 | 9.5 | % | ||||||||||||||||||||||
| Fee revenue | Total revenue | Adjusted EBITDA | Adjusted EBITDA margin | |||||||||||||||||||||||
| Consulting | $ | 691,654 | $ | 704,129 | $ | 118,413 | 17.1 | % | ||||||||||||||||||
| Digital | 363,523 | 364,383 | 113,129 | 31.1 | % | |||||||||||||||||||||
| Executive Search: | ||||||||||||||||||||||||||
| North America | 583,394 | 589,313 | 173,703 | 29.8 | % | |||||||||||||||||||||
| EMEA | 215,134 | 216,517 | 36,572 | 17.0 | % | |||||||||||||||||||||
| Asia Pacific | 97,527 | 98,138 | 21,475 | 22.0 | % | |||||||||||||||||||||
| Latin America | 28,049 | 28,092 | 5,603 | 20.0 | % | |||||||||||||||||||||
| Total Executive Search | 924,104 | 932,060 | 237,353 | 25.7 | % | |||||||||||||||||||||
| Professional Search & Interim | 561,077 | 566,253 | 121,156 | 21.6 | % | |||||||||||||||||||||
| RPO | 367,111 | 371,816 | 57,658 | 15.7 | % | |||||||||||||||||||||
| Corporate | - | - | (149,904) | |||||||||||||||||||||||
| Consolidated | $ | 2,907,469 | $ | 2,938,641 | $ | 497,805 | 17.1 | % | ||||||||||||||||||
| Year Ended April 30, 2025 | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Net income attributable to Korn Ferry | Net income attributable to Korn Ferry margin | |||||||||||||||||||||||||
| Consolidated | $ | 246,062 | 9.0 | % | ||||||||||||||||||||||
| Fee revenue | Total revenue | Adjusted EBITDA | Adjusted EBITDA margin | |||||||||||||||||||||||
| Consulting | $ | 662,708 | $ | 674,070 | $ | 115,481 | 17.4 | % | ||||||||||||||||||
| Digital | 363,530 | 363,727 | 112,696 | 31.0 | % | |||||||||||||||||||||
| Executive Search: | ||||||||||||||||||||||||||
| North America | 535,921 | 542,068 | 148,242 | 27.7 | % | |||||||||||||||||||||
| EMEA | 194,088 | 195,268 | 31,689 | 16.3 | % | |||||||||||||||||||||
| Asia Pacific | 87,337 | 87,840 | 18,119 | 20.7 | % | |||||||||||||||||||||
| Latin America | 28,862 | 28,876 | 8,149 | 28.2 | % | |||||||||||||||||||||
| Total Executive Search | 846,208 | 854,052 | 206,199 | 24.4 | % | |||||||||||||||||||||
| Professional Search & Interim | 503,515 | 507,246 | 107,600 | 21.4 | % | |||||||||||||||||||||
| RPO | 354,127 | 361,991 | 52,635 | 14.9 | % | |||||||||||||||||||||
| Corporate | - | - | (130,745) | |||||||||||||||||||||||
| Consolidated | $ | 2,730,088 | $ | 2,761,086 | $ | 463,866 | 17.0 | % | ||||||||||||||||||
| Year Ended April 30, 2024 | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Net income attributable to Korn Ferry | Net income attributable to Korn Ferry margin | |||||||||||||||||||||||||
| Consolidated | $ | 169,154 | 6.1 | % | ||||||||||||||||||||||
| Fee revenue | Total revenue | Adjusted EBITDA | Adjusted EBITDA margin | |||||||||||||||||||||||
| Consulting | $ | 695,007 | $ | 706,805 | $ | 114,260 | 16.4 | % | ||||||||||||||||||
| Digital | 366,699 | 366,924 | 108,669 | 29.6 | % | |||||||||||||||||||||
| Executive Search: | ||||||||||||||||||||||||||
| North America | 506,927 | 513,545 | 120,710 | 23.8 | % | |||||||||||||||||||||
| EMEA | 184,516 | 185,552 | 25,902 | 14.0 | % | |||||||||||||||||||||
| Asia Pacific | 85,863 | 86,273 | 18,923 | 22.0 | % | |||||||||||||||||||||
| Latin America | 28,937 | 28,956 | 5,571 | 19.3 | % | |||||||||||||||||||||
| Total Executive Search | 806,243 | 814,326 | 171,106 | 21.2 | % | |||||||||||||||||||||
| Professional Search & Interim | 540,615 | 544,453 | 101,868 | 18.8 | % | |||||||||||||||||||||
| RPO | 354,107 | 362,997 | 40,399 | 11.4 | % | |||||||||||||||||||||
| Corporate | - | - | (128,098) | |||||||||||||||||||||||
| Consolidated | $ | 2,762,671 | $ | 2,795,505 | $ | 408,204 | 14.8 | % | ||||||||||||||||||
Our Annual Report on Form 10-K for the year ended April 30, 2025 includes a discussion and analysis of our financial condition and results of operations for fiscal 2025 compared to fiscal 2024 in Item 7 of Part II, "Management's Discussion and Analysis of Financial Condition and Results of Operations."
Fiscal 2026 Compared to Fiscal 2025
Fee Revenue
Fee Revenue. Fee revenue increased by $177.4 million, or 7%, to $2,907.5 million in fiscal 2026 compared to $2,730.1 million in fiscal 2025. Exchange rates favorably impacted fee revenue by $48.1 million, or 2%, in fiscal 2026 compared to fiscal 2025. The increase in fee revenue was due to higher fee revenues in Professional Search & Interim, Executive Search North America, Executive Search EMEA, Consulting and RPO.
Consulting. Consulting reported fee revenue of $691.7 million in fiscal 2026, an increase of $29.0 million, or 4%, compared to $662.7 million in fiscal 2025. Exchange rates favorably impacted fee revenue by $12.9 million, or 2%, in fiscal 2026 compared to fiscal 2025. The increase in fee revenue was primarily driven by an increase in demand for our assessment & succession, organizational strategy and leadership development offerings.
Digital. Digital reported fee revenue of $363.5 million in fiscal 2026, essentially flat compared to $363.5 million in fiscal 2025. Exchange rates favorably impacted fee revenue by $9.7 million, or 3%, in fiscal 2026 compared to fiscal 2025.
Executive Search North America. Executive Search North America reported fee revenue of $583.4 million in fiscal 2026, an increase of $47.5 million, or 9%, compared to $535.9 million in fiscal 2025. North America's fee revenue increased primarily due to a 6% increase in the weighted-average fee billed per engagement (calculated using local currency) and a 3% increase in the number of engagements billed in fiscal 2026 compared to fiscal 2025.
Executive Search EMEA. Executive Search EMEA reported fee revenue of $215.1 million in fiscal 2026, an increase of $21.0 million, or 11%, compared to $194.1 million in fiscal 2025. Exchange rates favorably impacted fee revenue by $11.8 million, or 6%, in fiscal 2026 compared to fiscal 2025. The increase in fee revenue was primarily due to a 6% increase in the number of engagements billed and a 5% increase in the weighted-average fee billed per engagement in fiscal 2026 compared to fiscal 2025.
Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $97.5 million in fiscal 2026, an increase of $10.2 million, or 12%, compared to $87.3 million in fiscal 2025. The increase in fee revenue was primarily due to an 8% increase in the number of engagements billed and a 3% increase in weighted-average fee billed per engagement (calculated using local currency) in fiscal 2026 compared to fiscal 2025.
Executive Search Latin America. Executive Search Latin America reported fee revenue of $28.0 million in fiscal 2026, a decrease of $0.9 million, or 3%, compared to $28.9 million in fiscal 2025. Exchange rates favorably impacted fee revenue by $1.2 million, or 4%, in fiscal 2026 compared to fiscal 2025.
Professional Search & Interim. Professional Search & Interim reported fee revenue of $561.1 million in fiscal 2026, an increase of $57.6 million, or 11%, compared to $503.5 million in fiscal 2025. Exchange rates favorably impacted fee revenue by $6.0 million, or 1%, in fiscal 2026 compared to fiscal 2025. Interim fee revenue increased by $39.0 million primarily due to the acquisition of Trilogy International ("Trilogy") effective November 1, 2024. The rest of the increase was due to higher fee revenue in Permanent placement of $18.6 million in fiscal 2026 compared to fiscal 2025 due to an increase in the weighted-average fee billed per engagement.
RPO. RPO reported fee revenue of $367.1 million in fiscal 2026, an increase of $13.0 million, or 4%, compared to $354.1 million in fiscal 2025. Exchange rates favorably impacted fee revenue by $5.5 million, or 2%, in fiscal 2026 compared to fiscal 2025. The increase in fee revenue was primarily due to new logo clients in North America.
Compensation and Benefits
Compensation and benefits expense increased by $109.0 million, or 6%, to $1,867.0 million in fiscal 2026 from $1,758.0 million in fiscal 2025. Exchange rates unfavorably impacted compensation and benefits by $31.6 million, or 2%, in fiscal 2026 compared to fiscal 2025. The increase in compensation and benefits expense was primarily due to an increase in performance-related bonus expense of $33.6 million due to higher fee revenue in fiscal 2026 compared to fiscal 2025. Also contributing to the increase were higher salaries and related payroll taxes, deferred compensation expense and severance-related expenses of $29.2 million, $22.7 million and $12.2 million, respectively, in fiscal 2026 compared to fiscal 2025.
Consulting compensation and benefits expense increased by $17.7 million, or 4%, to $476.1 million in fiscal 2026 from $458.4 million in fiscal 2025. Exchange rates unfavorably impacted compensation and benefits by $10.0 million, or 2%, in fiscal 2026 compared to fiscal 2025. The increase in compensation and benefits expense was primarily due to increases of $15.7 million in performance-related bonus expense due to higher segment fee revenue in fiscal 2026 compared to fiscal 2025, $4.2 million in severance-related costs, and higher deferred compensation expense of $3.7 million in fiscal 2026 compared to fiscal 2025. The increase was partially offset by a decrease of $6.7 million in restricted stock compensation expense in fiscal 2026 compared to fiscal 2025.
Digital compensation and benefits expense was $179.5 million in both fiscal 2026 and fiscal 2025. Exchange rates unfavorably impacted compensation and benefits by $4.4 million, or 2%, in fiscal 2026 compared to fiscal 2025.
Executive Search North America compensation and benefits expense increased by $39.7 million, or 11%, to $402.0 million in fiscal 2026 compared to $362.3 million in fiscal 2025. Compensation and benefits expense increased primarily due to an increase of $24.3 million in performance-related bonus expense due to higher segment fee revenue in fiscal 2026 compared to fiscal 2025. Also contributing to the increase was $13.9 million more in deferred compensation expense in fiscal 2026 compared to fiscal 2025.
Executive Search EMEA compensation and benefits expense increased by $14.9 million, or 10%, to $160.3 million in fiscal 2026 compared to $145.4 million in fiscal 2025. Exchange rates unfavorably impacted compensation and benefits by $9.0 million, or 6%, in fiscal 2026 compared to fiscal 2025. Compensation and benefits expense increased primarily due to an increase of $9.5 million in salaries and related payroll taxes as a result of a 5% increase in average headcount in fiscal 2026 compared to fiscal 2025. Also contributing to the increase were $3.0 million more in amortization of long-term awards and an increase in performance-related bonus expense of $2.5 million due to higher segment fee revenue in fiscal 2026 compared to fiscal 2025.
Executive Search Asia Pacific compensation and benefits expense increased by $5.2 million, or 8%, to $66.9 million in fiscal 2026 compared to $61.7 million in fiscal 2025. The increase in compensation and benefits expense was primarily due to an increase in performance-related bonus expense of $4.2 million due to higher segment fee revenue in fiscal 2026 compared to fiscal 2025 and an increase of $1.1 million in salaries and related payroll taxes in fiscal 2026 compared to fiscal 2025.
Executive Search Latin America compensation and benefits expense increased by $0.8 million, or 4%, to $19.0 million in fiscal 2026 compared to $18.2 million in fiscal 2025.
Professional Search & Interim compensation and benefits expense increased by $13.9 million, or 7%, to $205.5 million in fiscal 2026 compared to $191.6 million in fiscal 2025. Exchange rates unfavorably impacted compensation and benefits by $2.2 million, or 1%, in fiscal 2026 compared to fiscal 2025. The increase in compensation and benefits expense was primarily due to an increase in salaries and related payroll taxes of $6.7 million in fiscal 2026 compared to fiscal 2025. Also contributing to the increase were higher severance-related expenses of $3.2 million and commission expense of $2.8 million in fiscal 2026 compared to fiscal 2025.
RPO compensation and benefits expense increased by $8.4 million, or 3%, to $277.4 million in fiscal 2026 from $269.0 million in fiscal 2025. Exchange rates unfavorably impacted compensation and benefits by $4.3 million, or 2%, in fiscal 2026 compared to fiscal 2025. The increase in compensation and benefits expense was primarily due to the increases in use of outside contractors to support the increase on segment fee revenue, severance-related expenses, and salaries and related payroll taxes of $3.8 million, $1.9 million and $1.8 million, respectively, in fiscal 2026 compared to fiscal 2025.
Corporate compensation and benefits expense increased by $8.5 million, or 12%, to $80.4 million in fiscal 2026 compared to $71.9 million in fiscal 2025. The increase was primarily due to increases of $3.8 million in restricted stock compensation expense, $2.7 million in salaries and related payroll taxes and $1.0 million in deferred compensation expense in fiscal 2026 compared to fiscal 2025.
General and Administrative Expenses
General and administrative expenses decreased by $10.8 million, or 4%, to $247.7 million in fiscal 2026 compared to $258.5 million in fiscal 2025. Exchange rates unfavorably impacted general and administrative expenses by $4.3 million, or 2%, in fiscal 2026 compared to fiscal 2025. 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 fiscal 2026 compared to fiscal 2025. Further contributing to the decrease were decreases of $4.4 million in bad debt expense and $3.4 million in integration and acquisition costs in fiscal 2026 compared to fiscal 2025, as well as impairment charges of $3.0 million associated primarily with the reduction of the Company's real estate footprint in fiscal 2025. These decreases were partially offset by increases in marketing and business development expenses and computer software licenses of $11.2 million and $3.6 million, respectively, in fiscal 2026 compared to fiscal 2025.
Consulting general and administrative expenses decreased by $2.9 million, or 6%, to $48.6 million in fiscal 2026 compared to $51.5 million in fiscal 2025. 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 fiscal 2026 compared to fiscal 2025. The decrease was partially offset by an increase in marketing and business development expenses of $1.4 million in fiscal 2026 compared to fiscal 2025.
Digital general and administrative expenses increased by $0.6 million, or 2%, to $39.7 million in fiscal 2026 compared to $39.1 million in fiscal 2025.
Executive Search North America general and administrative expenses decreased by $9.2 million, or 26%, to $26.7 million in fiscal 2026 from $35.9 million in fiscal 2025. The decrease in general and administrative expenses was primarily due to lower legal and other professional fees of $5.1 million in fiscal 2026 compared to fiscal 2025. Also contributing to the decrease was impairment charges of $2.6 million associated with the reduction of the Company's real estate footprint in fiscal 2025.
Executive Search EMEA general and administrative expenses decreased by $2.5 million, or 15%, to $14.5 million in fiscal 2026 from $17.0 million in fiscal 2025. 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 fiscal 2026. This decrease was partially offset by the impact of foreign currency, with a foreign currency loss of $0.1 million in fiscal 2026 compared to a foreign currency gain of $0.5 million in fiscal 2025.
Executive Search Asia Pacific general and administrative expenses increased by $1.2 million, or 15%, to $9.0 million in fiscal 2026 from $7.8 million in fiscal 2025. The increase in general and administrative expenses was primarily due to an increase of $1.0 million in bad debt expense in fiscal 2026 compared to fiscal 2025.
Executive Search Latin America general and administrative expenses increased by $1.1 million, or 44%, to $3.6 million in fiscal 2026 from $2.5 million in fiscal 2025. The increase in general and administrative expenses was primarily due to the impact of foreign currency, with a foreign currency loss of $0.3 million in fiscal 2026 compared to a foreign currency gain of $1.1 million in fiscal 2025.
Professional Search & Interim general and administrative expenses decreased by $4.2 million, or 21%, to $15.9 million in fiscal 2026 from $20.1 million in fiscal 2025. 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 fiscal 2026 and a decrease of $1.7 million in bad debt expense in fiscal 2026 compared to fiscal 2025.
RPO general and administrative expenses decreased by $3.8 million, or 18%, to $17.4 million in fiscal 2026 from $21.2 million in fiscal 2025. The decrease in general and administrative expenses was primarily due to a decrease of $3.0 million in bad debt expense in fiscal 2026 compared to fiscal 2025 and a gain from the modification of an office lease of $1.5 million in fiscal 2026.
Corporate general and administrative expenses increased by $9.0 million, or 14%, to $72.3 million in fiscal 2026 compared to $63.3 million in fiscal 2025. The increase in general and administrative expenses was primarily due to increases in marketing and business development expenses and legal and other professional fees of $10.1 million and $2.1 million, respectively, in fiscal 2026 compared to fiscal 2025. These increases were partially offset by a decrease in integration and acquisition costs of $2.8 million in fiscal 2026 compared to fiscal 2025.
Cost of Services Expense
Cost of services expense consists of contractor and product costs related to the delivery of various services and products through Consulting, Digital, Professional Search & Interim and RPO. Cost of services expense was $319.2 million in fiscal 2026, an increase of $34.1 million, or 12%, compared to $285.1 million in fiscal 2025. Professional Search & Interim accounted for $30.3 million of the increase due to an increase in fee revenue in the segment as a significant amount of interim services performed had a higher cost of service expense as compared to the Company's other segments.
Depreciation and Amortization Expenses
Depreciation and amortization expenses were $98.8 million in fiscal 2026, an increase of $18.5 million, or 23%, compared to $80.3 million in fiscal 2025. 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 combined with technology investments made in the current and prior year in our Digital segment.
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 fiscal 2025, we recorded an adjustment to the previously recorded restructuring accruals of $1.9 million. There were no restructuring charges during fiscal 2026.
Net Income Attributable to Korn Ferry
Net income attributable to Korn Ferry was $277.4 million in fiscal 2026, an increase of $31.3 million, or 13%, compared to $246.1 million in fiscal 2025. The increase in net income attributable to Korn Ferry was primarily due to an increase in fee revenue of $177.4 million, partially offset by increases in compensation and benefits expense of $109.0 million and cost of services expense of $34.1 million in fiscal 2026 compared to fiscal 2025. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 10% and 9% in fiscal 2026 and 2025, respectively.
Adjusted EBITDA
Adjusted EBITDA was $497.8 million in fiscal 2026, an increase of $33.9 million, or 7%, compared to $463.9 million in fiscal 2025. The increase in Adjusted EBITDA was driven by an increase in fee revenue, partially offset by increases in compensation and benefit expense (excluding management separation charges and integration/acquisition costs) and cost of services expense in fiscal 2026 compared to fiscal 2025. Adjusted EBITDA, as a percentage of fee revenue, was 17.1% in both fiscal 2026 and 2025.
Consulting Adjusted EBITDA was $118.4 million in fiscal 2026, an increase of $2.9 million, or 3%, compared to $115.5 million in fiscal 2025. The increase in Adjusted EBITDA was primarily driven by an increase in fee revenue, partially offset by increases in compensation and benefits expense (excluding management separation charges) and cost of services expense in fiscal 2026 compared to fiscal 2025. Consulting Adjusted EBITDA, as a percentage of fee revenue, was 17% in both fiscal 2026 and fiscal 2025.
Digital Adjusted EBITDA was $113.1 million in fiscal 2026, essentially flat, compared to $112.7 million in fiscal 2025. Digital Adjusted EBITDA, as a percentage of fee revenue, was 31% in both fiscal 2026 and fiscal 2025.
Executive Search North America Adjusted EBITDA increased by $25.5 million, or 17%, to $173.7 million in fiscal 2026 compared to $148.2 million in fiscal 2025. The increase in Adjusted EBITDA was primarily driven by increases in fee revenue and other income, net coupled with lower general and administrative expenses (excluding impairment of right-of-use assets and fixed assets), partially offset by an increase in compensation and benefits expense in fiscal 2026 compared to fiscal 2025. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 30% in fiscal 2026 compared to 28% in fiscal 2025.
Executive Search EMEA Adjusted EBITDA increased by $4.9 million, or 15%, to $36.6 million in fiscal 2026 compared to $31.7 million in fiscal 2025. The increase in Adjusted EBITDA was primarily driven by an increase in fee revenue, partially offset by higher compensation and benefits expense and an increase in general and administrative expenses (excluding gain from modification of an office lease) in fiscal 2026 compared to fiscal 2025. Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, was 17% in fiscal 2026 compared to 16% in fiscal 2025.
Executive Search Asia Pacific Adjusted EBITDA increased by $3.4 million, or 19%, to $21.5 million in fiscal 2026 compared to $18.1 million in fiscal 2025. The increase in Adjusted EBITDA was primarily driven by an increase in fee revenue, partially offset by increases in compensation and benefits expense and general and administrative expenses in fiscal 2026 compared to fiscal 2025. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 22% in fiscal 2026 compared to 21% in fiscal 2025.
Executive Search Latin America Adjusted EBITDA decreased by $2.5 million, or 31%, to $5.6 million in fiscal 2026 compared to $8.1 million in fiscal 2025. The decrease in Adjusted EBITDA was primarily driven by increases in general and administrative expenses and compensation and benefits expense, coupled with a decrease in fee revenue in fiscal 2026 compared to fiscal 2025. Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, was 20% in fiscal 2026 compared to 28% in fiscal 2025.
Professional Search & Interim Adjusted EBITDA was $121.2 million in fiscal 2026, an increase of $13.6 million, or 13%, compared to $107.6 million in fiscal 2025. 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 benefits expense (excluding integration/acquisition costs). Professional Search & Interim Adjusted EBITDA, as a percentage of fee revenue, was 22% in fiscal 2026 compared to 21% in fiscal 2025.
RPO Adjusted EBITDA was $57.7 million in fiscal 2026, an increase of $5.1 million, or 10%, compared to $52.6 million in fiscal 2025. 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 fiscal 2026 compared to fiscal 2025. RPO Adjusted EBITDA, as a percentage of fee revenue, was 16% in fiscal 2026 compared to 15% in fiscal 2025.
Other Income, Net
Other income, net was $33.7 million in fiscal 2026 compared to $19.0 million in fiscal 2025. The difference was primarily due to an increase in the gains generated from the increase in fair value of our marketable securities that are held in trust for the settlement of the Company's obligations under the ECAP in fiscal 2026 compared to fiscal 2025.
Interest Expense, Net
Interest expense, net primarily relates to our Notes issued in December 2019, borrowings under our 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 $20.0 million in fiscal 2026 compared to $20.4 million in fiscal 2025.
Income Tax Provision
The provision for income tax was $107.6 million in fiscal 2026 compared to $93.8 million in fiscal 2025. This reflects a 27.7% effective tax rate for fiscal 2026 compared to a 27.2% effective tax rate for fiscal 2025. The effective tax rate was primarily impacted by U.S. state income taxes and jurisdictional mix of earnings, which generally create variability in our 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. We have reflected the effect of the Act within the provision for income taxes and the deferred tax balances. 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 is attributable to shares of such subsidiary not held by Korn Ferry that are included in the consolidated statements of income. Net income attributable to noncontrolling interest was $3.4 million and $5.0 million in fiscal 2026 and fiscal 2025, respectively.
Liquidity and Capital Resources
The Company and its Board of Directors (the "Board") 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 this Annual Report on 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 April 30, 2026, the fair value of the Notes was $396.5 million, which is based on borrowing rates currently required of notes with similar terms, maturity and credit risk.
On July 1, 2025, we 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 (the "Facility"). The Credit Agreement also provides that, under certain circumstances, we may incur term loans or increase the aggregate principal amount of revolving commitments by an aggregate amount of up to $600.0 million plus an unlimited amount subject to a consolidated secured net leverage ratio of 3.25 to 1.00. The Credit Agreement replaced a previous 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. We repaid all outstanding obligations under the Prior Credit Agreement, and expenses and fees in connection therewith. See Note 11 - Long-Term Debt for a further description of the Credit Agreement. The Company had a total of $845.7 million available under the Facility and $645.6 million available under the Prior Credit Agreement as of April 30, 2026 and 2025, respectively, after $4.3 million and $4.4 million of standby letters of credit were issued as of April 30, 2026 and 2025, respectively. The Company had a total of $15.5 million and $13.1 million of standby letters with other financial institutions as of April 30, 2026 and 2025, respectively. The standby letters of credit were generally issued as a result of entering into office premise leases.
On December 8, 2014, the Board adopted a dividend policy to distribute to our stockholders a regular quarterly cash dividend of $0.10 per share. Every quarter since the adoption of the dividend policy, the Company has declared a quarterly dividend. On June 21, 2021 and 2022, the Board increased the quarterly dividend to $0.12 per share and $0.15 per share, respectively. On June 26, 2023, the Board approved an increase of 20% in the quarterly dividend, which increased the quarterly dividend to $0.18 per share. On December 5, 2023, the Board approved an increase of 83% in the quarterly dividend, which increased the quarterly dividend to $0.33 per share. On June 12, 2024, the Board approved an increase in the quarterly dividend to $0.37 per share. On March 10, 2025, the Board approved a further increase of 30% in the quarterly dividend, which increased the quarterly dividend to $0.48 per share. On March 5, 2026, the Board approved a 15% increase in the quarterly dividend, which increased the quarterly dividend to $0.55 per share. The Credit Agreement permits us to pay dividends to our stockholders and make share repurchases so long as there is no default under the Credit Agreement, our total funded debt to adjusted EBITDA ratio (as set forth in the Credit Agreement, the "consolidated net leverage ratio") is no greater than 5.00 to 1.00, and we are in pro forma compliance with our financial covenants that require the Company to maintain a consolidated secured net leverage ratio of not greater than 3.75 to 1.00 (which may be temporarily increased to 4.25 following certain material acquisitions under certain circumstances) (the "Financial Covenant"). Furthermore, our Notes allow us to pay $25.0 million of dividends per fiscal year with no restrictions plus an unlimited amount of dividends so long as our consolidated total leverage ratio is not greater than 3.50 to 1.00, and there is no default under the indenture governing the Notes. The declaration and payment of future dividends under the quarterly dividend program will be at the discretion of the Board and will depend upon many factors, including our earnings, capital requirements, financial conditions, the terms of our indebtedness and other factors our Board may deem to be relevant. Our Board may, however, amend, revoke or suspend our dividend policy at any time and for any reason.
On September 18, 2025, our Board approved an increase to the share repurchase program of $250.0 million, which at the time brought our available capacity to repurchase shares in the open market or privately negotiated transactions to $331.4 million. The Company repurchased approximately $116.1 million and $88.9 million of the Company's stock during fiscal 2026 and fiscal 2025, respectively. As of April 30, 2026, $227.7 million remained available for common stock repurchases under our share repurchase program. Any decision to continue to execute our currently outstanding share repurchase program will depend on our earnings, capital requirements, financial condition and other factors considered relevant by our Board.
Our primary source of liquidity is the fee revenue generated from our operations, supplemented by our borrowing capacity under our Credit Agreement. Our performance is subject to the general level of economic activity in the geographic regions and the industries we service. We believe, based on current economic conditions, that our cash on hand and funds from operations and the Credit Agreement will be sufficient to meet anticipated working capital, capital expenditures, general corporate requirements, debt repayments, share repurchases and dividend payments under our dividend policy during the next 12 months and thereafter for the foreseeable future. However, if the national or global economy, credit market conditions and/or labor markets were to deteriorate in the future, including as a result of ongoing macroeconomic uncertainty due to inflation and a potential recession, such changes have put and could continue to put, further negative pressure on demand for our services and affect our operating cash flows. If these conditions were to persist over an extended period of time, we may incur negative cash flows and it might require us to access additional borrowings under the Credit Agreement to meet our capital needs and/or discontinue our share repurchases and dividend policy.
Cash and cash equivalents and marketable securities were $1,381.5 million and $1,277.0 million as of April 30, 2026 and 2025, respectively. Net of amounts held in trust for deferred compensation plans and accrued bonuses, cash and cash equivalents and marketable securities were $728.9 million and $667.3 million at April 30, 2026 and 2025, respectively. As of April 30, 2026 and 2025, we held $432.3 million and $405.2 million, respectively, of cash and cash equivalents in foreign locations, net of amounts held in trust for deferred compensation plans and to pay accrued bonuses. Cash and cash equivalents consist of cash and highly liquid investments purchased with original maturities of three months or less. Marketable securities consist of mutual funds and investments in commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities. The primary objectives of our investment in mutual funds are to meet the obligations under certain of our deferred compensation plans, while the commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities are available for general corporate purposes.
As of April 30, 2026 and 2025, marketable securities of $286.0 million and $270.0 million, respectively, included equity securities of $243.6 million (net of gross unrealized gains of $42.7 million and gross unrealized losses of $1.4 million) and $230.4 million (net of gross unrealized gains of $27.7 million and gross unrealized losses of $0.6 million), respectively, and were held in trust for settlement of our obligations under certain deferred compensation plans, of which $230.2 million and $218.0 million, respectively, are classified as non-current. These marketable securities were held to satisfy vested obligations totaling $222.1 million and $205.3 million as of April 30, 2026 and 2025, respectively. Unvested obligations under the deferred compensation plans totaled $18.9 million and $19.5 million as of April 30, 2026 and 2025, respectively.
Our working capital (current assets less current liabilities) was $924.0 million as of April 30, 2026 and $794.5 million as of April 30, 2025. The net increase in our working capital of $129.5 million as of April 30, 2026 compared to April 30, 2025 was primarily attributable to an increase in cash and cash equivalents, as well as increases in income taxes and other receivables and prepaid expenses and other assets. These increases were partially offset by an increase in compensation and benefits payable. The increase in cash and cash equivalents was primarily due to cash from operations, partially offset by payments of annual bonuses earned in fiscal 2025 and paid during the first quarter of fiscal 2026, purchase of property and equipment, repurchases of common stock and dividends paid to shareholders. Income taxes and other receivables increased primarily due to lease incentives we expect to receive within a year due to the modification of an office lease that we entered into in the second quarter of fiscal 2026 and large tax payments made in fiscal 2026. Prepaid expenses and other assets increased primarily due to an increase in prepaid advertising of sponsorship events and timing of payment of computer software licenses costs. Compensation and benefits payable increased primarily due to higher performance-related bonus accrued for as a result of higher fee revenue in fiscal 2026 compared to fiscal 2025 and an increase in deferred compensation liability due within a year. Cash provided by operating activities was $414.2 million in fiscal 2026 compared to $364.4 million in fiscal 2025.
Cash used in investing activities was $98.7 million in fiscal 2026 compared to $125.5 million in fiscal 2025. The decrease from cash used in investing activities was primarily due to $44.4 million in cash paid for the acquisition of Trilogy in fiscal 2025 and an increase in proceeds received from sales/maturities of marketable securities net of purchases of $13.6 million in fiscal 2026 compared to fiscal 2025. The decrease was partially offset by an increase in the purchase of property and equipment of $27.4 million in fiscal 2026 compared to fiscal 2025 and a decrease in proceeds from life insurance policies of $3.9 million.
Cash used in financing activities was $238.4 million in fiscal 2026 compared to $190.7 million in fiscal 2025. The increase in cash used in financing activities was primarily due to higher repurchases of the Company's common stock of $26.9 million and an increase in dividends paid to stockholders of $21.0 million in fiscal 2026 compared to fiscal 2025.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements and have not entered into any transactions involving unconsolidated, special purpose entities.
Contractual Obligations
Contractual obligations represent future cash commitments and liabilities under agreements with third parties and exclude contingent liabilities for which we cannot reasonably predict future payment. The following table represents our contractual obligations as of April 30, 2026:
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| Operating lease commitments | 15 | $ | 246,318 | $ | 38,459 | $ | 69,866 | $ | 45,750 | $ | 92,243 | ||||||||||||||||||||||||
| Finance lease commitments | 15 | 4,916 | 2,104 | 2,496 | 316 | - | |||||||||||||||||||||||||||||
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Interest payments on COLI loans (2)
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11 | 26,678 | 4,285 | 8,570 | 7,517 | 6,306 | |||||||||||||||||||||||||||||
| Long-term debt | 11 | 400,000 | - | 400,000 | - | - | |||||||||||||||||||||||||||||
|
Estimated interest on long-term debt (3)
|
11 | 37,000 | 18,500 | 18,500 | - | - | |||||||||||||||||||||||||||||
| Total | $ | 714,912 | $ | 63,348 | $ | 499,432 | $ | 53,583 | $ | 98,549 | |||||||||||||||||||||||||
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(1)See the corresponding Note in the accompanying consolidated financial statements in Item 15.
(2)Assumes COLI loans remain outstanding until receipt of death benefits on COLI policies and applies current interest rates on COLI loans ranging from 4.76% to 8.00% with total death benefits payable, net of loans under COLI contracts of $604.6 million at April 30, 2026.
(3)Interest on the Notes payable semi-annually in arrears on June 15 and December 15 of each year, commenced on June 15, 2020.
In addition to the contractual obligations above, we have liabilities related to certain employee benefit plans. These liabilities are recorded in our consolidated balance sheets. The obligations related to these employee benefit plans are described in Note 6-Deferred Compensation and Retirement Plans, in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K.
Lastly, we have contingent commitments under certain employment agreements that are payable upon involuntary termination without cause, as described in Note 17-Commitments and Contingencies, in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K.
Cash Surrender Value of Company Owned Life Insurance Policies, Net of Loans
We purchased COLI policies or contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. As of April 30, 2026 and 2025, we held contracts with gross cash surrender value of $361.2 million and $325.5 million, respectively. Total outstanding borrowings against the CSV of COLI contracts were $72.2 million and $72.8 million as of April 30, 2026 and 2025, respectively. Such borrowings do not require annual principal repayments, bear interest primarily at variable rates and are secured by the CSV of COLI contracts. At April 30, 2026 and 2025, the net cash value of these policies was $289.1 million and $252.6 million, respectively. Total death benefits payable, net of loans under COLI contracts, were $604.6 million and $592.8 million at April 30, 2026 and 2025, respectively.
Other than the factors discussed in this section, we are not aware of any other trends, demands or commitments that would materially affect liquidity or those that relate to our resources as of April 30, 2026.
Accounting Developments
Recently Adopted Accounting Standards
In December 2023, the Financial Accounting Standards Board ("FASB") issued an amendment to the accounting update for income taxes disclosures. The new amendments provide improvements to annual income tax disclosures by requiring specific categories in the rate reconciliation and disaggregated information for income taxes paid. The amendment is effective for annual periods beginning after December 15, 2024, and can be applied on a prospective or retrospective basis. We adopted this guidance on a prospective basis in fiscal 2026 and it did not have a material impact on the consolidated financial statements.
Recent Accounting Standards - Not Yet Adopted
In November 2024, the FASB 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. We 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 consolidated financial statements.
In July 2025, the FASB issued an amendment to the accounting update for measurement of credit losses for accounts receivable and contract assets. The amendment 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. We will adopt this guidance in the interim periods beginning in fiscal 2027. The adoption of this guidance is not anticipated to have a material impact on our consolidated financial statements.
In September 2025, the FASB 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. We are currently evaluating the impact of this accounting guidance on our consolidated financial statements.
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