Korn Ferry Q1 FY2027 Earnings: Fee Revenue Rises 7% While EBITDA Margin Holds at 17%

Korn Ferry (NYSE: KFY) reported Q1 FY2027 fee revenue of $756.5 million, up 7% year over year from $708.6 million, while diluted EPS increased 5% to $1.32 from $1.26. Search and Workforce Solutions produced double-digit growth, but higher compensation and administrative expenses kept adjusted EBITDA margin flat and reduced net margin by 30 basis points. The results cover the three months ended July 31, 2026, and were announced on September 1, 2026.

Core Earnings Data

Fee revenue increased for the sixth consecutive quarter, with growth across every region. Higher revenue lifted operating income, net income and adjusted EBITDA, although the expansion did not translate into a higher consolidated adjusted EBITDA margin.

Net income attributable to Korn Ferry rose 4% to $69.0 million. Adjusted diluted EPS grew faster at 9%, partly reflecting the exclusion of integration and acquisition costs, which increased to $7.6 million from $1.5 million.

Adjusted EBITDA and adjusted EPS are non-GAAP measures that exclude applicable integration, acquisition and other specified costs.

Business and Regional Performance

Search and Workforce Solutions drove companywide growth, while Talent & Organizational Solutions was essentially unchanged. The Americas was the fastest-growing region and generated most of the incremental fee revenue; APAC delivered only modest reported growth.

Americas growth reflected 14% increases in both Search and Workforce Solutions. Its adjusted EBITDA margin improved 140 basis points to 26.3%. EMEA’s margin edged up to 16.4%, while APAC adjusted EBITDA fell to $19.2 million from $19.8 million and its margin declined to 22.2% from 23.1%.

Commercial indicators also increased. Estimated remaining fees under signed contracts reached $1.915 billion, up 14%, while new business rose about 12% to $832.3 million. Annualized new-business productivity per fee earner increased to $1.84 million from $1.61 million even as the ending number of fee earners declined to 1,811 from 1,830.

Profitability and Balance Sheet

Compensation and benefits expense increased to $477.4 million from $461.4 million, while general and administrative expense rose to $80.2 million from $63.9 million. Cost of services also increased to $83.3 million from $77.2 million. Korn Ferry said fee-revenue growth was the primary driver of higher net income and adjusted EBITDA, partly offset by these expense increases.

Operating income grew about 12%, but net income rose more slowly. Net other income declined to $5.1 million from $12.8 million, and net interest expense increased to $4.3 million from $3.5 million, limiting the benefit from improved operating profit.

Cash and cash equivalents stood at $800.9 million on July 31, down from $1.10 billion at the end of April. Client receivables increased to $615.3 million from $573.4 million, while long-term debt was nearly unchanged at $398.8 million. Because the AMS acquisition closed after quarter-end on September 1, the July 31 balance sheet does not include the acquired business.

Q2 FY2027 Guidance

Korn Ferry’s Q2 outlook includes AMS for September and October. That means the projected fee-revenue increase is not directly comparable with the company’s pre-acquisition Q1 run rate.

Adjusted diluted EPS guidance includes the after-tax effects of incremental intangible-asset amortization, net interest expense and shares issued for the AMS acquisition. Korn Ferry did not provide corresponding GAAP margin or EPS guidance because it could not reasonably estimate Q2 integration and acquisition costs.

Management’s View

CEO Gary D. Burnison emphasized that Q1 marked Korn Ferry’s sixth consecutive quarter of fee-revenue growth. Management expects AMS to expand Workforce Solutions by adding technology-enabled talent services delivered through long-term client contracts, although the immediate Q2 outlook also incorporates acquisition-related amortization, financing and share-count effects.

Recent Insider Transactions

The supplied insider data categorizes 400,800 shares across five purchases and 9,110 shares across three sales during the last six months, resulting in 391,690 net shares purchased. Among the 10 latest detailed records, three were direct sales with reported values totaling approximately $704,000; the remaining records consisted of stock awards and a stock gift.

These disclosures describe the transactions but do not establish the insiders’ views regarding Korn Ferry’s outlook.

Risks Investors Should Watch

• AMS integration costs: The company could not quantify Q2 GAAP earnings because integration and acquisition costs remain uncertain. These expenses could widen the difference between GAAP and adjusted results.
• Expense pressure: Compensation, administrative and service-delivery costs increased during Q1. Continued expense growth could prevent revenue gains from producing margin expansion.
• Uneven business growth: Talent & Organizational Solutions was flat, while APAC grew only 1.4% and recorded lower adjusted EBITDA. Continued weakness in these areas would increase reliance on the Americas, Search and Workforce Solutions.
• Guidance assumptions: The Q2 outlook assumes no further changes in geopolitical conditions, economic conditions, financial markets or foreign exchange rates.

Summary

Korn Ferry’s Q1 FY2027 results showed broad regional growth led by Search and Workforce Solutions, with higher fee revenue supporting increases in operating income, net income and adjusted EPS. Expense growth and lower other income limited margin improvement, leaving adjusted EBITDA margin flat and net margin slightly lower. The next quarter will be shaped by the addition of AMS, making integration costs, acquired revenue and the effect on adjusted profitability the main items to monitor.