KORN FERRY SEC 10-K Report

Korn Ferry, a global organizational consulting firm, has released its annual 10-K report, providing a comprehensive overview of its financial performance, business operations, strategic initiatives, and the challenges it faces. The report highlights the company's efforts to adapt to market conditions, invest in technology, and drive growth through strategic acquisitions and capital management.

Financial Highlights

• Total Revenue: $2,761.1 million, reflecting a slight decrease from the previous year due to lower demand in certain segments.
• Net Income: $246.1 million, a 45% increase compared to the previous year, primarily driven by decreases in compensation and benefits expense, restructuring charges, and cost of services expense.
• Net Income Attributable to Korn Ferry: $246.1 million, representing a 9.0% margin, up from 6.1% in the prior year.
• Diluted EPS: $4.60, indicating improved profitability and efficiency.
• Adjusted EBITDA: $463.9 million, a 14% increase from the previous year, driven by cost reductions and efficiency improvements.

Business Highlights

• Revenue Segments: Korn Ferry's business is organized into five solution areas: Consulting, Digital, Executive Search, Professional Search & Interim, and Recruitment Process Outsourcing (RPO). Each area contributes to the company's overall fee revenue, with Executive Search being the largest segment, accounting for 31% of total fee revenue in fiscal 2025.
• Geographical Performance: The Executive Search segment is managed and reported on a geographic basis, with North America, EMEA, Asia Pacific, and Latin America as key regions. In fiscal 2025, North America saw a 6% increase in fee revenue, EMEA increased by 5%, and Asia Pacific by 2%, while Latin America remained flat.
• Sales Units: In fiscal 2025, Korn Ferry opened more than 6,300 new Executive Search engagements, reflecting strong demand for board-level and senior executive recruitment services.
• New Product Launches: Korn Ferry continues to invest in its proprietary technology platform, the Korn Ferry Talent Suite®, which integrates generative AI to enhance client workflows and consultant efficiency.
• Future Outlook: Korn Ferry plans to continue expanding its capabilities and integrating technology to meet evolving client needs. The company is focused on deepening client relationships and driving transformational growth through its Marquee and Diamond Accounts Program, which represented 39% of consolidated fee revenue in fiscal 2025.

Strategic Initiatives

• Acquisition of Trilogy: Korn Ferry completed the acquisition of Trilogy for $44.4 million to enhance its Professional Search & Interim business, focusing on digital interim talent across EMEA and the United States. This acquisition is part of a broader strategy to scale solutions at the intersection of talent, transformation, and strategy.
• Capital Management: Korn Ferry maintains a balanced approach to capital allocation, prioritizing investments in growth initiatives and returning excess capital to shareholders through dividends and share repurchases. The company increased its quarterly dividend to $0.48 per share and repurchased approximately $88.9 million of its common stock in fiscal 2025. The company has a revolving credit facility of $650 million, with $645.6 million available as of April 30, 2025, and a $400 million principal amount of Notes maturing in December 2027.
• Future Outlook: Korn Ferry plans to continue its strategic focus on growth through acquisitions and investments in technology and talent solutions. The company aims to maintain a strong liquidity position to support these initiatives and manage its capital structure effectively. The ongoing macroeconomic uncertainty, including inflation and potential recession, may impact future demand for services, but the company believes its current resources are sufficient to meet anticipated needs.

Challenges and Risks

• Competition: Korn Ferry faces significant competition across its service offerings, including human resource consulting, executive search, and digital products. The company must continuously innovate and adapt to maintain its competitive edge.
• Talent Retention: The ability to attract and retain qualified consultants is critical. The loss of key personnel could lead to a decline in client relationships and revenue.
• Technological Disruption: Advances in AI and automation could reduce demand for traditional human capital services. Korn Ferry must invest in new technologies to remain competitive.
• Regulatory Risks: The company is subject to complex and evolving regulations, including data privacy laws like GDPR. Non-compliance could result in significant fines and reputational damage.
• Economic Conditions: Global economic downturns, inflation, and geopolitical uncertainties could negatively impact demand for Korn Ferry's services.
• Legal Liability: The company is exposed to potential legal claims related to its consulting services and executive search processes.
• Debt Levels: Korn Ferry's level of indebtedness could limit its financial flexibility and ability to respond to market changes.
• Market Risks: Korn Ferry is exposed to foreign currency exchange rate fluctuations, which could impact its financial results. The company operates in multiple countries, and changes in exchange rates could affect revenue and expenses. Additionally, interest rate increases could raise the cost of servicing its variable rate debt.

SEC Filing: KORN FERRY [ KFY ] - 10-K - Jun. 27, 2025