Korn Ferry Q1 FY’26 slides: revenue up 5%, EMEA and APAC drive growth

Introduction & Market Context

Korn Ferry (NYSE:KFY) presented its first quarter fiscal 2026 earnings results on September 9, 2025, showing solid growth across key financial metrics despite varying regional performance. The global organizational consulting firm reported fee revenue of $709 million, representing a 5% year-over-year increase (4% in constant currency).

The company’s stock responded positively to the results, with premarket trading showing a 7.61% increase to $78.03, building on momentum from its strong Q4 FY’25 performance when the stock surged nearly 15% following better-than-expected results.

Quarterly Performance Highlights

Korn Ferry delivered strong financial results for Q1 FY’26, with adjusted EBITDA reaching $120 million, an 8% increase year-over-year. The adjusted EBITDA margin improved by 50 basis points to 17.0%, demonstrating the company’s ability to enhance operational efficiency. Adjusted diluted earnings per share rose to $1.31, an 11% increase from the prior year.

As shown in the following comprehensive performance overview:

New business growth was positive at 5% year-over-year excluding RPO (Recruitment Process Outsourcing), and 1% including RPO on a constant currency basis. This growth in new business indicates continued demand for Korn Ferry’s services despite challenging economic conditions mentioned in previous earnings calls.

The company’s estimated remaining fees under existing contracts showed strong momentum, providing visibility into future revenue streams:

Geographic and Solution Performance

Korn Ferry’s Q1 results revealed significant geographic disparities in performance. The EMEA region led growth with a 19% year-over-year increase in fee revenue, followed by APAC at 12%. However, the Americas region, which accounts for 57% of total fee revenue, experienced a 2% decline.

By solution, Executive Search and Professional Search & Interim showed the strongest performance with 8% and 10% year-over-year growth respectively. The RPO segment grew by 3%, while Consulting and Digital segments each posted modest 1% growth.

The Executive Search segment, representing 32% of fee revenue and 37% of adjusted EBITDA, demonstrated solid performance with improving margins:

Similarly, the Professional Search & Interim segment showed robust growth, with fee revenue increasing 10% year-over-year:

The Digital segment, while showing modest 1% overall growth, saw its subscription and license fee revenue increase by 9% year-over-year, indicating a shift toward recurring revenue streams:

Strategic Initiatives and Capital Allocation

Korn Ferry continues to position itself as a global organizational consulting firm with a comprehensive suite of solutions. The company highlighted its strategic advantages, including proprietary intellectual property with over 10 billion data points and an expanding set of digitized products.

As illustrated in the following strategic overview:

The company’s strategy focuses on driving integrated client engagements, monetizing intellectual property, implementing an integrated go-to-market approach, and pursuing transformational opportunities:

In terms of capital allocation, Korn Ferry deployed $67 million in Q1 FY’26, with $22 million invested in technology, $9 million in debt service, and $36 million returned to shareholders through dividends and share repurchases. The company’s cash position strengthened to $963 million, up from $610 million at the end of Q4 FY’25:

Forward-Looking Statements

While the presentation did not provide explicit guidance for the upcoming quarters, Korn Ferry’s strategic positioning suggests continued focus on leveraging its diverse portfolio of solutions to drive growth. The company’s strong backlog of estimated remaining fees under existing contracts ($1.7 billion) provides a solid foundation for future revenue.

The varying regional performance highlights both challenges and opportunities, with the Americas region showing weakness while EMEA and APAC demonstrate strong growth momentum. This geographic diversification may help Korn Ferry navigate economic uncertainties in different markets.

The company’s continued investment in technology ($22 million in Q1) underscores its commitment to enhancing digital capabilities and intellectual property, which management views as key differentiators in the market. With subscription and license revenue growing at 9% year-over-year, Korn Ferry appears to be successfully transitioning toward more predictable, recurring revenue streams.

As global organizations continue to face talent and organizational challenges, Korn Ferry’s integrated approach positions it to capitalize on what it estimates as a $450 billion addressable market, supporting its long-term growth strategy despite near-term economic headwinds in certain regions.

Full presentation:

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