Q4 2026 Korn Ferry Earnings Call

Speaker #1: Call. At this time, all participants are in a listen-only mode. Following the prepared remarks, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded for replay purposes.

Speaker #1: We have also made available in the investor relations section of our website at kornferry.com a copy of the financial presentation that we will be reviewing with you today.

Speaker #1: Before I turn the call over to your host, Mr. Gary Burnison, let me first read a cautionary statement to investors. Certain statements made in the call today, such as those relating to future performance, plans and goals, constitute forward-looking statements within the meaning of the private securities litigation reform act of 1995.

Speaker #1: Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, investors are cautioned not to place undue reliance on such statements.

Speaker #1: Ladies and gentlemen, thank you for standing by, and welcome to the Korn Ferry fourth quarter fiscal year 2026 conference call. At this time, all participants are in a listen-only mode.

Speaker #1: Actual results and future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties which are beyond the company's control.

Speaker #1: Following the prepared remarks, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded for replay purposes. We have also made available, in the Investor Relations section of our website at kornferry.com, a copy of the financial presentation that we will be reviewing with you today.

Speaker #1: Additional information concerning such risks and uncertainties can be found in the release relating to this presentation, and in the periodic and other reports filed by the company with the SEC, including the company's soon-to-be-filed annual reports for fiscal year 2026.

Speaker #1: Before I turn the call over to your host, Mr. Gary Bernison, let me first read a cautionary statement to investors. Certain statements made on the call today, such as those relating to future performance, plans, and goals, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Speaker #1: Also, some of the comments today may reference non-GAAP financial measures such as constant currency amounts, EBITDA, and adjusted EBITDA, additional information concerning these measures, including reconciliations to the most directly comparable GAAP financial measure, is contained in the Financial Presentation and Earnings Release relating to this call, both of which are posted in the investor relations section of the company's website at kornferry.com.

Speaker #1: Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, investors are cautioned not to place undue reliance on such statements.

Speaker #1: With that, I'll turn the call over to Mr. Burnison. Please go ahead, Mr. Burnison.

Speaker #1: Actual results and future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, which are beyond the company's control.

Speaker #2: Okay. Thank you, Sarah. And thank you, everybody, for joining us. I'm going to let our team walk through the numbers, but our quarterly performance was outstanding.

Speaker #1: Additional information concerning such risks and uncertainties can be found in the release relating to this presentation, and in the periodic and other reports filed by the company with the SEC, including the company's soon-to-be-filed annual report for fiscal year 2026.

Speaker #2: It marks our fifth consecutive quarter of top-line growth, underscoring the strength of our strategy. But let me first reflect on a moment. You know, on these calls, I used to talk about opportunities measured in the hundreds of millions of dollars.

Speaker #1: Also, some of the comments today may reference non-GAAP financial measures such as constant currency amounts, EBITDA, and adjusted EBITDA. Additional information concerning these measures, including reconciliations to the most directly comparable GAAP financial measure, is contained in the financial presentation and earnings release relating to this call, both of which are posted in the investor relations section of the company's website at kornferry.com.

Speaker #2: Today, I think in terms of opportunities measured in the billions. Far beyond where we are today. In leadership, we spend a lot of time talking about the what, the how, and the when.

Speaker #2: Too often, though, the why and the who get overlooked. Despite all of Korn Ferry's success and evolution, our why has never changed. Enabling people and organizations to be more than.

Speaker #1: With that, I'll turn the call over to Mr. Bernison. Please go ahead, Mr. Bernison.

Speaker #2: And I was reminded of that a few months ago while I was traveling in the Midwest. And out of nowhere, I heard the sound of a train horn.

Speaker #2: Okay, thank you, Sarah. And thank you, everybody, for joining us. I'm going to let our team walk through the numbers, but our quarterly performance was outstanding.

Speaker #2: Which I hadn't heard in years. It wasn't the sound that struck me. It was that feeling. In an instant, I was taken back to where I was raised, where trains ran next to our house, and that moment healed back the years and made me reflect about the essence of who we are and what we do.

Speaker #2: It marks our fifth consecutive quarter of top-line growth, underscoring the strength of our strategy. But let me first reflect for a moment. You know, on these calls, I used to talk about opportunities measured in the hundreds of millions of dollars.

Speaker #2: Today, I think in terms of opportunities measured in the billions—far beyond where we are today. In leadership, we spend a lot of time talking about the what, the how, and the when.

Speaker #2: And as I think about the Korn Ferry of today, this image feels particularly relevant. We're at the intersection of a present that feels far different than our past, and a future that will even be brighter than today.

Speaker #2: Too often, though, the why and the who get overlooked. Despite all of Korn Ferry's success and evolution, our why has never changed: enabling people and organizations to be more than.

Speaker #2: That's why our foundational headmark is evolving, from one Korn Ferry to We Are Korn Ferry. And We Are Korn Ferry begins with deep clients centricity.

Speaker #2: And I was reminded of that a few months ago while I was traveling in the Midwest, and out of nowhere, I heard the sound of a train horn.

Speaker #2: And expanding the breadth of our solutions, we deliver within every client relationship. And there are just a few examples during the quarter of the Fortune 50 tech company that turned to us to accelerate their sales organization, or a global professional services firm to look to us as their sole source of interim technology talent.

Speaker #2: Which I hadn't heard in years. It wasn't the sound that struck me; it was that feeling. In an instant, I was taken back to where I was raised.

Speaker #2: Where trains ran next to our house. That moment healed back the years and made me reflect on the essence of who we are and what we do.

Speaker #2: And as I think about the Korn Ferry of today, this image feels particularly relevant. We're at the intersection of a present that feels far different than our past, and a future that will be even brighter than today.

Speaker #2: I mean, I could go on and on and on, including in the quarter we won a number of substantial RPO engagements, spanning multiple industries.

Speaker #2: Across all three regions. And, you know, when we take a client-centric approach, and we leverage our relationships across geographies, and deliver impact with the totality of the firm, we build sustainable relationships of scale.

Speaker #2: That's why our foundational headmark is evolving, from 'One Korn Ferry' to 'We are Korn Ferry.' And 'We are Korn Ferry' begins with deep client centricity.

Speaker #2: And expanding the breadth of our solutions, we deliver within every client relationship. And there are just a few examples during the quarter of a Fortune 50 tech company that turned to us to accelerate their sales organization.

Speaker #2: Over the last several months, I've looked in the mirror and realized that what got us here by itself is not what will get us there.

Speaker #2: Or a global professional services firm to look to us as their sole source of interim technology talent. I mean, I could go on and on and on. Including, in the quarter, we won a number of substantial RPO engagements spanning multiple industries.

Speaker #2: To reach our destination, we need to shift our mindset. That's when our whole becomes bigger than the sum of our parts. As such, I want our industry's to be accelerators.

Speaker #2: Our solutions to be innovators and enablers in our geographies to be the integrators. And so starting in this quarter, Q1, our external reporting segments are going to be reflected through a regional lens of the Americas, EMEA, and APAC.

Speaker #2: Across all three regions. And, you know, when we take a client-centric approach, leverage our relationships across geographies, and deliver impact with the totality of the firm, we build sustainable relationships of scale.

Speaker #2: And our solution-level detail will be provided in three categories: search, comprised of executive and professional search; talent and organizational solutions, comprised of digital and consulting; and finally, workforce solutions, comprised of RPO and interim.

Speaker #2: Over the last several months, I've looked in the mirror and realized that what got us here, by itself, is not what will get us there.

Speaker #2: To reach our destination, we need to shift our mindset. That's when our whole becomes bigger than the sum of our parts. As such, I want our industries to be accelerators.

Speaker #2: These categories serve our clients across the entire talent continuum. Search is about identifying talent, workforce solutions is about scaling talent, and talent and organizational solutions is about unlocking potential.

Speaker #2: Our solutions are to be innovators and enablers in our geographies, to be the integrators. And so, starting in this quarter—Q1—our external reporting segments are going to be reflected through a regional lens of the Americas, EMEA, and APAC.

Speaker #2: Grouping our solutions like this more accurately reflects how work gets done today. And orients our services to the competitive landscape and the way the clients buy these solutions.

Speaker #2: And our solution-level detail will be provided in three categories: Search, comprised of Executive and Professional Search; Talent and Organizational Solutions, comprised of Digital and Consulting; and finally, Workforce Solutions, comprised of RPO and Interim.

Speaker #2: I'm confident that amid all the changes in the world today, it can also be the best environment where good companies become even greater. Aligning to opportunities ahead.

Speaker #2: I'm also incredibly proud. Enormously proud of our colleagues around the world. Their expertise and passion are the catalyst as we change people's lives, unlock the potential in people, and unleash transformation across organizations.

Speaker #2: These categories serve our clients across the entire talent continuum. Search is about identifying talent, workforce solutions is about scaling talent, and talent and organizational solutions are about unlocking potential.

Speaker #2: With that, I'll turn the call over to Bob. Bob, go ahead.

Speaker #3: Great. Thanks, Gary and good afternoon or good morning, everybody. You know, I would be remiss if I didn't start by saying thank you to all the colleagues Gary was just referring to as fiscal 26 was another outstanding year for Korn Ferry.

Speaker #2: Grouping our solutions like this more accurately reflects how work gets done today and orients our services to the competitive landscape and the way clients buy these solutions.

Speaker #3: You know, despite uneven market conditions, uncertain macro environment, we achieved a new fee revenue high and delivered very strong earnings. We continue to skillfully execute our We Are Korn Ferry go-to-market strategy, integrating our intellectual property data along with our consulting capabilities to drive enterprise-wide results for our clients.

Speaker #2: I'm confident that amid all the changes in the world today, it can also be the best environment where good companies become even greater—aligning to opportunities ahead.

Speaker #2: I'm also incredibly proud—enormously proud of our colleagues around the world. Their expertise and passion are the catalyst as we change people's lives, unlock the potential in individuals, and unleash transformation across organizations.

Speaker #3: We continue to demonstrate how we're different. And we are different. Growing for the fifth consecutive quarter while others in the industry continue to contract or just perform less worse.

Speaker #2: With that, I'll turn the call over to Bob. Bob, go ahead.

Speaker #3: Our results demonstrate the resilience and effectiveness of our strategy and the benefits of our diversified business model. We continue to evolve into a comprehensive organizational and talent solution partner for all of our clients.

Speaker #3: Great. Thanks, Gary, and good afternoon or good morning, everybody. You know, I would be remiss if I didn't start by saying thank you to all the colleagues Gary was just referring to, as fiscal '26 was another outstanding year for Korn Ferry.

Speaker #3: You know, despite uneven market conditions and an uncertain macro environment, we achieved a new fee revenue high and delivered very strong earnings. We continue to skillfully execute our "We are Korn Ferry" go-to-market strategy, integrating our intellectual property data along with our consulting capabilities to drive enterprise-wide results for our clients.

Speaker #3: We perform differently because we're not simply a monoline transactional business. We're a diversified data and IP-driven talent advisory with multiple synergistic revenue streams and growing earnings power.

Speaker #3: Now let me turn to our Q4 performance. This will be in addition to the detailed results in the earnings presentation that we posted. I'm going to provide you a couple of company-wide and solution-specific highlights for the quarter.

Speaker #3: We continue to demonstrate how we're different—and we are different. We're growing for the fifth consecutive quarter, while others in the industry continue to contract or simply perform less well.

Speaker #3: So for Q4, our ending estimated remaining fees under existing contracts grew 10% year over year to almost $1.9 billion with growth in every solution.

Speaker #3: Our results demonstrate the resilience and effectiveness of our strategy, as well as the benefits of our diversified business model. We continue to evolve into a comprehensive organizational and talent solution partner for all of our clients.

Speaker #3: Our business referral rate increased to 29.1% of consolidated fee revenue in the fourth quarter that's up by about $320 basis points. And our marketing and diamond account penetration remained strong at 40% of our consolidated fee revenue.

Speaker #3: We perform differently because we're not simply a monoline, transactional business. We're a diversified, data- and IP-driven talent advisory firm with multiple synergistic revenue streams and growing earnings power.

Speaker #3: Now, both these metrics really demonstrate the effectiveness of our We Are Korn Ferry go-to-market strategy. Executive search grew 7% in the fourth quarter and is now growing for eight consecutive quarters.

Speaker #3: Now let me turn to our Q4 performance. This will be in addition to the detailed results in the earnings presentation that we posted. I'm going to provide you a couple of company-wide and solution-specific highlights for the quarter.

Speaker #3: Professional search and interim fee revenue was up 14%, with 17% growth in professional search and 12% growth in interim. Our interim solution continues to perform better than other industry players driven by both strong business referrals and expanding bill rates.

Speaker #3: So, for Q4, our ending estimated remaining fees under existing contracts grew 10% year over year to almost $1.9 billion, with growth in every solution.

Speaker #3: Digital subscription and license fee revenue was up 10% year over year. And last, our consulting fee revenue grew 7% driven by an increase in larger engagements and stronger bill rates.

Speaker #3: Our business referral rate increased to 29.1% of consolidated fee revenue in the fourth quarter. That's up by about 320 basis points. And our marquee and diamond account penetration remained strong at 40% of our consolidated fee revenue.

Speaker #3: Now let me turn to overall company results. For the full year, fee revenue was about $2.9 billion, up 7%. We delivered close to 500 million dollars in adjusted EBITDA also up 7%.

Speaker #3: Now, both these metrics really demonstrate the effectiveness of our Korn Ferry go-to-market strategy. Executive Search grew 7% in the fourth quarter and is now growing for eight consecutive quarters.

Speaker #3: Adjusted EPS of $5.28, which was also up 8%. Focusing on the fourth quarter, we grew for the fifth consecutive quarter, as Gary mentioned, with consolidated fee revenue up 7%, reaching $760 million.

Speaker #3: Professional search and interim fee revenue was up 14%, with 17% growth in professional search and 12% growth in interim. Our interim solution continues to perform better than other industry players, driven by both strong business referrals and expanding bill rates.

Speaker #3: Earnings and profitability also remained strong. Adjusted EBITDA grew 8 million or 7% to $130 million. Adjusted EBITDA margin remained very strong at 17%. And adjusted diluted earnings per share grew 8 cents or 6% to $1.40.

Speaker #3: Digital subscription and license fee revenue was up 10% year over year. And last, our consulting fee revenue grew 7%, driven by an increase in larger engagements and stronger bill rates.

Speaker #3: Total company new business grew 2% when you exclude RPO, 4% when you include it. The RPO business itself won $137 million of new business in the fourth quarter, and 74% of that came from new logos.

Speaker #3: Now let me turn to overall company results. For the full year, fee revenue was about $2.9 billion, up 7%. We delivered close to $500 million in adjusted EBITDA, also up 7%.

Speaker #3: As I previously mentioned, estimated remaining fees under existing contracts at the end of the fourth quarter were almost $1.9 billion. 57% or about a billion dollars of that is projected to be recognized within the next year and the remaining 43% or $800 million or so is going to be recognized beyond the next four quarters.

Speaker #3: Adjusted EPS of $5.28, which was also up 8%. Focusing on the fourth quarter, we grew for the fifth consecutive quarter, as Gary mentioned, with consolidated fee revenue up 7%, reaching $760 million.

Speaker #3: Earnings and profitability also remained strong. Adjusted EBITDA grew $8 million, or 7%, to $130 million. Adjusted EBITDA margin remained very strong at 17%. Adjusted diluted earnings per share grew $0.08, or 6%, to $1.40.

Speaker #3: Looking at our regional results, fee revenue in the Americas up 8% with strength in exec search, pro search, and interim, and RPO. EMEA fee revenue also grew 8% with strong growth in consulting.

Speaker #3: And professional search and interim. And our Asia PAC fee revenue is kind of flat year over year. Finally, we continue to maintain a disciplined approach to capital allocation.

Speaker #3: Total company new business grew 2% when you exclude RPO, and 4% when you include it. The RPO business itself won $137 million of new business in the fourth quarter, and 74% of that came from new logos.

Speaker #3: In the fourth quarter, we purchased one point 24 million shares using approximately 78 million dollars. Now, if you remember, when we talked in our last earnings call, we said we're going to lean more heavily into buybacks, and that's exactly what we did.

Speaker #3: As I previously mentioned, estimated remaining fees under existing contracts at the end of the fourth quarter were almost $1.9 billion. Fifty-seven percent, or about $1 billion of that, is projected to be recognized within the next year, and the remaining 43%, or $800 million or so, is going to be recognized beyond the next four quarters.

Speaker #3: For all of fiscal 26, we returned $221 million per shareholders through the combination of share repurchases and dividends. Invested $85 million into capex for the development of talent suite and the delivery of other productivity tools for other solutions.

Speaker #3: Looking at our regional results, fee revenue in the Americas was up 8%, with strength in Executive Search, Professional Search and Interim, and RPO. EMEA fee revenue also grew 8%, with strong growth in Consulting and Professional Search and Interim.

Speaker #3: Now, turning to our outlook for the first quarter of fiscal 27, assuming no further changes in worldwide geopolitical conditions, economic conditions, financial markets, foreign exchange rates, we expect fee revenue to range from $725 to $745 million.

Speaker #3: And our AsiaPAC fee revenue was kind of flat year over year. Finally, we continue to maintain a disciplined approach to capital allocation. In the fourth quarter, we purchased 1.24 million shares using approximately $78 million.

Speaker #3: Our adjusted EBITDA margin to be right around 17%. And our consolidated adjusted diluted earnings per share to range from $1.32 to $1.38. Now, before I conclude as Gary mentioned earlier, the company will continue to build on our We Are Korn Ferry go-to-market strategy.

Speaker #3: Now, if you remember, when we talked in our last earnings call, we said we're going to lean more heavily into buybacks, and that's exactly what we did.

Speaker #3: For all of fiscal '26, we returned $221 million to shareholders through the combination of share repurchases and dividends. We invested $85 million into capex for the development of the Talent Suite and the delivery of other productivity tools for our solutions.

Speaker #3: We expect this initiative to continue to drive deeper client penetration and industry-leading growth. Through this initiative, we are orienting more towards regions. For our integrators, as Gary said, this will also result in a change to the company's financial reporting segments.

Speaker #3: Now, turning to our outlook for the first quarter of fiscal '27, assuming no further changes in worldwide geopolitical conditions, economic conditions, financial markets, or foreign exchange rates, we expect fee revenue to range from $725 million to $745 million.

Speaker #3: As Gary mentioned, beginning in the first quarter of fiscal 27, our external reporting segments will transition from global solution-based presentation to three regional reporting segments: the Americas, EMEA, and APAC.

Speaker #3: Our adjusted EBITDA margin to be right around 17%, and our consolidated adjusted diluted earnings per share to range from $1.32 to $1.38. Now, before I conclude, as Gary mentioned earlier, the company will continue to build on our "We Are KORN FERRY" go-to-market strategy.

Speaker #3: The region segment results will include fee revenue and profitability through adjusted EBITDA. And then we'll continue to provide solution-level results for new business, fee revenue, and estimated remaining fees under existing contracts through the three solution groupings: again, search, executive search, and professional search, talent and organizational solutions, comprised of consulting and digital, and workforce solutions, comprised of RPO and interim.

Speaker #3: We expect this initiative to continue driving deeper client penetration and industry-leading growth. Through this initiative, we are orienting more towards regions. For our integrators, as Gary said, this will also result in a change to the company’s financial reporting segments.

Speaker #3: We really believe this reporting structure better reflects how work is delivered across the firm, aligns much more closely with how our clients are actually buying our services, and better enables our We Are Korn Ferry operating model.

Speaker #3: As Gary mentioned, beginning in the first quarter of fiscal '27, our external reporting segments will transition from a global solution-based presentation to three regional reporting segments: the Americas, EMEA, and APAC.

Speaker #3: Now, to insist assist folks excuse me in understanding the impact of these changes, the company will be providing recast supplemental unaudited information containing historical financial information for the three reporting segments following the filing of our Q1 FY27 10Q in September.

Speaker #3: The region segment results will include fee revenue and profitability through adjusted EBITDA. And then we'll continue to provide solution-level results for new business, fee revenue, and estimated remaining fees under existing contracts through the three solution groupings: again, search—executive search and professional search, talent and organizational solutions—comprised of consulting and digital, and workforce solutions—comprised of RPO and interim.

Speaker #3: In addition, our Q1 FY27 press release will reflect the new reporting segments and the investor presentation that we will post to our website will reflect both the new reporting segments and the selected financial data previously mentioned for our three solution groupings.

Speaker #3: We really believe this reporting structure better reflects how work is delivered across the firm, aligns much more closely with how our clients are actually buying our services, and better enables our "We are Korn Ferry" operating model.

Speaker #3: Now, in conclusion, we continue to be extremely encouraged by the strength of our business, the progress we've made, executing our strategy, and the continued trust our clients place in Korn Ferry.

Speaker #3: Now, to assist folks—excuse me—in understanding the impact of these changes, the company will be providing recast supplemental unaudited information containing historical financial information for the three reporting segments following the filing of our Q1 FY27 10-Q in September.

Speaker #3: Our diversified portfolio, global scale, and integrated solutions position us well to navigate through any business environment. We are going to continue to invest in our people, our platforms, and drive our long-term growth opportunities.

Speaker #3: We remain focused on driving performance, delivering value to our clients and shareholders, and we look forward to continuing with industry-leading differentiated success in the year ahead.

Speaker #3: In addition, our Q1 FY27 press release will reflect the new reporting segments, and the investor presentation that we will post to our website will reflect both the new reporting segments and the selected financial data previously mentioned for our three solution groupings.

Speaker #3: With that, we would be glad to answer any questions you may have.

Speaker #1: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again.

Speaker #3: Now, in conclusion, we continue to be extremely encouraged by the strength of our business, the progress we've made executing our strategy, and the continued trust our clients place in Korn Ferry.

Speaker #1: Our first question comes from Trevor Romeo, with William Blair. Your line is open.

Speaker #2: Hi. Thanks so much for taking the questions. I had a couple on the executive search business, I think first of all, I think in the press release you mentioned kind of winning more work at the higher levels of the organization.

Speaker #3: Our diversified portfolio, global scale, and integrated solutions position us well to navigate through any business environment. We will continue to invest in our people, our platforms, and drive our long-term growth opportunities.

Speaker #2: I wanted to dig in there. So when you talk about the higher levels of the organization, is that primarily Korn Ferry gaining market share in those areas, or is it some kind of shift among the client base?

Speaker #3: We remain focused on driving performance, delivering value to our clients and shareholders, and we look forward to continuing with industry-leading, differentiated success in the year ahead.

Speaker #2: And is that a sustainable trend that you would see continuing?

Speaker #4: Well, it certainly I'll tell you that over the long run here, the brand around the executive search solution has certainly gone up market. And you can just look at the climb in our average fees.

Speaker #3: With that, we would be glad to answer any questions you may have.

Speaker #1: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again.

Speaker #1: Our first question comes from Trevor Romeo with William Blair. Your line is open.

Speaker #4: And the average fees are up almost 10%, just over the last couple of years. And if I go further back than that, it would be very dramatic.

Speaker #2: Hi, thanks so much for taking the questions. I had a couple on the executive search business. First of all, I think in the press release you mentioned winning more work at the higher levels of the organization, and I wanted to dig in there.

Speaker #4: So I think that we've proven that we can take the access that's afforded us and surround it with a lot of adjacent solutions that not only diversifies the firm, but positions us.

Speaker #2: So, when you talk about the higher levels of the organization, is that primarily Korn Ferry gaining market share in those areas, or is it some kind of shift among the client base?

Speaker #4: And I can think of six or seven big marquee consumer CEO changes this year in the United States that we were part of. So yeah, we've definitely moved up brand.

Speaker #2: And is that a sustainable trend that you would see continuing?

Speaker #3: Well, I'll certainly tell you that, over the long run here, the brand around the executive search solution has definitely gone upmarket. And you can just look at the climb in our average fees.

Speaker #4: Now, whether we're taking market share or not, I don't look at I look at the market opportunity as 300 billion dollars. I think the search market is probably 14 or 15 billion.

Speaker #4: So we tend to look at the 300 billion and what we can do to drive share there. Having said that, it is incredibly important to us.

Speaker #3: And the average fees are up almost 10% just over the last couple of years. And if I go further back than that, it would be very dramatic.

Speaker #3: So, I think that we've proven that we can take the access that's afforded to us and surround it with a lot of adjacent solutions that not only diversify the firm, but also position us.

Speaker #4: That gives us unparalleled access. And I think we've proven that if we're careful about it with high quality, we can monetize that access.

Speaker #2: Thanks, Gary. That's helpful. And maybe follow up on the search business again. Just in terms of the volume side, I think that's been a pretty good story the last few years with executive turnover being kind of elevated and the demographics and such.

Speaker #2: But I think this quarter the new engagements were more like flattish. So from what you can see kind of in the pipeline, I guess, what would you say about kind of the volume trends that you see now?

Speaker #2: And you'd expect going forward. Is that kind of moderating or what would you see there?

Speaker #4: Well, it's certainly been it's certainly been it's accelerated, for sure. Over the last couple of years, I'll just tell you that trailing four months here, and even so far this month, it's looking very, very good.

Speaker #4: And so again, I'm going to like on the last quarterly earnings call, I mean, our business essentially deals with the outliers of achievement. And whether that is in workforce solutions or talent and organizational solutions, it's dealing at the very, very high end.

Speaker #4: And out of the 170 million working Americans, it's certainly with the outliers of achievement. The 10 or 15 million. That would be "in the C-suite" or upper management.

Speaker #4: So I can only tell you that the demographic trends are real. And the last four months have continued on pace.

Speaker #2: Okay. Thanks again. And maybe one more, if you don't mind. Kind of similar theme, but on the pro search and interim side, I think a lot of the growth there seems to be driven by maybe mixed shift to higher skills, higher salaries, like the interim bill rate being up $20 versus last year.

Speaker #2: I think the pro search kind of fee per placement is also growing nicely. So maybe you could just speak to kind of what you're seeing across the different verticals in that business and maybe in the context of the skill sets where you kind of seeing the candidates move up in the skill set curve and how that's kind of helping you outperform the peer set there.

Speaker #4: Well, I think the outperformance is I would point to the ability to have a client-centric approach and drive deeper relationships with our clients. So what we've found is that solution is very, very synergistic.

Speaker #4: With the rest of the firm. That is number one. And we have seen we just got into that solution five and a half years ago.

Speaker #4: And today, for example, in interim, that's almost a 400 million annual solution. Where there's a market opportunity of billions and billions of dollars, and it's the same for RPO.

Speaker #4: Both of those are massive markets. And clearly, over time here I mean, I think we started, Bob, with the rate per hour and interim was like 100.

Speaker #5: It was close to 100 bucks, yeah.

Speaker #4: Yeah. And so it's gone from 100 to 150. And right now, the principle areas that we are in are technology, finance and accounting, HR, and supply chain.

Speaker #4: But you can imagine that we're just getting started here. On this. And so we've definitely seen a pickup over the last three months or so, four months.

Speaker #4: Around the interim solution. And so some of that clearly, some of that's market, right? The temp penetration level was going down forever. 36, 37 months.

Speaker #4: And so you've seen that. That's stabilized. That's definitely helped. But I think it's these other factors as well. And like I said, we're just getting started with this.

Speaker #5: Yeah. Trevor says, Bob, the thing I would add to it is just being part of our ecosystem. So you heard Gary talk about the size of the interim business.

Speaker #5: North of 10% of that comes from referrals across the organization. Right? So those are engagements that never would have existed had they not been part of the KORN FERRY family.

Speaker #5: The other stat I mentioned in my remarks are business referrals. So the referred work across the system. It's now up to a little bit north of 29%.

Speaker #5: Right? If you go back prior to the beginning of this year, we were kind of stuck at 25 for a number of quarters. We put the we are KORN FERRY's go-to-market strategy in place at the beginning of this year.

Speaker #5: And you've seen that ramp throughout the course of the year up to 29% now. So I think some of what you're seeing in these businesses is just being part of our ecosystem and engagements and deeper client penetration result in more business referrals across?

Speaker #2: That all makes sense. All right. Thank you guys very much. I appreciate it.

Speaker #1: And so those are engagements that never would have existed had they not been part of the Korn Ferry family. The other stat I mentioned in my remarks is business referrals—so, the referred work across the system.

Speaker #1: Your next question comes from George Tong with Goldman Sachs. Your line is open.

Speaker #3: A little bit deeper into the new business trends. So XRPO new business was up 2% year over year or relatively flat on a constant currency basis.

Speaker #1: It's now up to a little bit north of 29%, right? If you go back prior to the beginning of this year, we were kind of stuck at 25% for a number of quarters.

Speaker #3: And that moderated a bit from the prior quarter. Can you talk about what contributed to the deceleration and new business XRPO? And what the implications are for revenue over the next year?

Speaker #1: We put the—you know—the "We are Korn Ferry go-to-market strategy" in place at the beginning of this year, and you’ve seen that ramp throughout the course of the year, up to 29% now.

Speaker #4: Yeah. It's a little thing called a war. So the Middle East. It definitely has had an impact, in a big way, on the levels of new business.

Speaker #1: So I think some of what you're seeing in these businesses is just being part of our ecosystem, and, you know, engagements and deeper client penetration result in more business referrals across.

Speaker #4: And it's a little bit of a flywheel impact. So we've trailing four months. We've seen strong, strong new business in Americas. But it's definitely impacted APAC.

Speaker #2: That all makes sense. All right, thank you guys very much. I appreciate it.

Speaker #3: Your next question comes from George Tong with Goldman Sachs. Your line is open.

Speaker #4: No question about it. And it's obviously impacted EMEA and the Middle East. So that's what I would point to.

Speaker #4: A little bit deeper into the new business trends. So, XRPO new business was up 2% year-over-year, or relatively flat on a constant currency basis. That moderated a bit from the prior quarter.

Speaker #3: Got it. And then with respect to margins, EBITDA margins in the quarter were flat year over year. Can you talk about some of the puts and takes on margin performance?

Speaker #4: Can you talk about what contributed to the deceleration in new business XRPO, and what the implications are for revenue over the next year?

Speaker #4: Yeah. Yeah. I'm glad you asked that, George. Because I saw you mentioned that. There's really one reason why. I mean, if you look at the revenue over performance, in the quarter, you have to pay people for that.

Speaker #1: Yeah, it's a little thing called a war. So, the Middle East—it definitely has had an impact, in a big way, on the levels of new business.

Speaker #4: And so we ended up having to book more bonus expense in the quarter. Which is something I'd happily do to drive that type of revenue growth every quarter, to be honest with you.

Speaker #1: And, you know, it's a little bit of a flywheel impact. So, over the trailing four months, we've seen strong, strong new business in the Americas, but it's definitely impacted APAC.

Speaker #3: Got it. Very helpful. Thank you.

Speaker #1: Your next question comes from Mark Marcin with Baird. Your line is open.

Speaker #1: I have no question about it, and it has obviously impacted EMEA and the Middle East. So that's what I would point to.

Speaker #2: Hey. Good morning or good afternoon, depending on where you are. Really nice results. Gary, can you talk a little bit about just from a leadership perspective, internally, to KORN FERRY, what you're going to do in terms of reporting structures.

Speaker #4: Got it. And then, with respect to margins, EBITDA margins in the quarter were flat year-over-year. Can you talk about some of the puts and takes on margin performance?

Speaker #1: Yeah, yeah, I'm glad you asked that, George. I saw your note—you mentioned that. There's really one reason why. I mean, if you look at the revenue overperformance in the quarter, you have to pay people for that.

Speaker #2: Are you going to have a head of search, a head of talent in organizational, a head of workforce solutions? Or are you going to have the head of Americas and EMEA and APAC?

Speaker #1: And so we ended up having to book more bonus expense in the quarter, which is something I’d happily do to drive that type of revenue growth every quarter, to be honest with you.

Speaker #2: How's that going to work? How's reporting structure go? How's it going to end up optimizing the performance on a go-forward basis for you?

Speaker #4: Got it. Very helpful. Thank you.

Speaker #4: Well, so first of all, we started this a little bit over a year ago, Mark. And the starting point is mindset. And so we've been very, very deliberate starting with leadership 15 actually, 15 months ago.

Speaker #3: Your next question comes from Mark Markham with Baird. Your line is open.

Speaker #2: Hey, good morning—or good afternoon, depending on where you are. Really nice results. Gary, can you talk a little bit about, just from a leadership perspective internally at Korn Ferry, what you're going to do in terms of reporting structures?

Speaker #4: Around mindset, and client centricity. Up to this point, we haven't we don't have five businesses. We have one business with up to this point, five solutions.

Speaker #2: Are you going to have, like, a head of Search, a head of Talent & Organizational, a head of Workforce Solutions, or are you going to have a head of Americas, EMEA, and APAC?

Speaker #4: So you are going to be with them left with a matrixed organization for sure. And the truth is that we have to pivot more towards geographies.

Speaker #2: How's that going to work? How's the reporting structure going to look? How's it going to end up optimizing the performance on a go-forward basis for you?

Speaker #4: We were, I think, a little bit over-indexed on solutions. And so we do have a head of APAC in the Americas and EMEA. And we have to if you want to get at client centricity, you've got to get at it both top down through the enterprise accounts, but you also have to do it bottom up.

Speaker #1: Well, I—so, first of all, we started this a little bit over a year ago, Mark. And the starting point is mindset. And so we've been very, very deliberate, starting with leadership 15—actually, 15 months ago.

Speaker #1: Around mindset and client centricity. Up to this point, we haven't—we don't have five businesses. We have one business with, up to this point, five solutions.

Speaker #4: And the bottom up is on a regional basis. And so we have carefully over time here, over the last year, shifted mindset. Now, ultimately, say in another year, were that ends up to directly answer your question, I think that's premature.

Speaker #1: So you are going to be left with a matrixed organization, for sure. And the truth is that we have to pivot more towards geographies.

Speaker #4: But for sure, we've shifted the focus of the organization including the 1800 partners and principals that we have at the firm that are responsible for originating business.

Speaker #1: We were, I think, a little bit over-indexed on solutions. And so we do have a head of APAC, the Americas, and EMEA. And we have to—if you want to get at client centricity, you've got to get at it both top-down through the enterprise accounts, but you also have to do it bottom-up.

Speaker #4: And the every single day now, the leadership team looks at every piece of new business that's open. Over a certain level. And keep in mind, you're talking about 40 or 50 engagements a day.

Speaker #1: And the bottom-up is on a regional basis. And so, we have carefully, over time here—over the last year—shifted mindset. Now, ultimately, say in another year, where that ends up, you know, to directly answer your question, I think that's premature.

Speaker #4: Where the team and it's very programmatic with the regional leaders, with the solution leaders, with the industry leaders about who does what. And we are looking at each of those engagements to making sure that we have a good team on it, what the opportunity is, and whether we can not only land something, but expand it.

Speaker #1: But for sure, we've shifted the focus of the organization, including the 1,800 partners and principals that we have at the firm who are responsible for originating business.

Speaker #4: So every single day that's been happening now for about 13 or 14 months. And so my starting point, rather than org structure, has been on mindset.

Speaker #1: And, you know, every single day now, the leadership team looks at every piece of new business that's opened—over a certain level. And keep in mind, you're talking about 40 or 50 engagements a day.

Speaker #4: Mindset of our leaders, and mindset of the organization. Because the fact is, when you look at the data, we do business with almost 14,000 clients around the world.

Speaker #4: 5,000 of those clients represent 90% of our revenue. When you look at those 5,000, you're going to find that 60, 65% of those are only utilizing about one and a half of our solutions.

Speaker #1: With the team, and it's very programmatic, with the regional leaders, the solution leaders, and the industry leaders, about who does what. We are looking at each of those engagements to make sure that we have a good team on it, understand what the opportunity is, and consider whether we can not only land something, but expand it.

Speaker #4: And if you look at the logos there, the opportunity just comes screaming off the page. So I think we have to continue to evolve this organization.

Speaker #1: So, every single day—that's been happening now for about 13 or 14 months. And so, my starting point, rather than org structure, has been on mindset.

Speaker #4: And I just looked in the mirror a year ago, Mark, and I said, "Wow. What you're doing, including how you're going to clients, how you're representing yourself to Wall Street, you're dividing before you are uniting." We have one firm.

Speaker #1: Mindset of our leaders, and mindset of the organization. Because the fact is, when you look at the data, we do business with almost 14,000 clients around the world.

Speaker #4: And what I want in three years is that when colleagues go to clients, they say, "We are from KORN FERRY." Not, "I'm from this," or, "I'm from that." And that's really what we're striving for.

Speaker #1: 5,000 of those clients represent 90% of our revenue. When you look at those 5,000, you're going to find that 60 to 65% of those are only utilizing about 1.5 of our solutions.

Speaker #4: And a deeper penetration of that client base.

Speaker #2: That totally makes sense. And so I hate to ask a segment question after that. But how should we think about the margins on digital and consulting?

Speaker #1: And if you look at the logos there, you know, the opportunity just comes screaming off the page. So I think, you know, we have to continue to evolve this organization.

Speaker #2: Was that also reflective of the strong performance and then the bonuses that were associated there?

Speaker #1: And I just looked in the mirror a year ago, Mark, and I said, wow, what you're doing, including how you're going to clients and how you're representing yourself to Wall Street, you're dividing before you are uniting.

Speaker #4: I think the reality is we had pretty broad-based growth across the firm, Mark. With the exception is George. The exception is the Middle East.

Speaker #1: We have one firm. And what I want in three years is that when colleagues go to clients, they say, "We are from Korn Ferry."

Speaker #4: And I didn't finish my answer to George. Hopefully, what we've seen in every crisis is opportunity. But we've also seen in every crisis, there's pent-up demand.

Speaker #1: Not, "I'm from this," or "I'm from that." And that's really what we're striving for: a deeper penetration of that very, very rich client base.

Speaker #4: And so I do believe as the hopefully, as the skies clear here, and oil starts to flow through the strait, I think you're probably going to see some pent-up demand.

Speaker #2: Totally makes sense. And so, I hate to ask a segment question after that, but how should we think about the margins on Digital and Consulting?

Speaker #4: It may be six months out. But there's no doubt that that's had an impact on the levels of new business for sure. But I would say, Mark, that it was pretty broad-based.

Speaker #2: Was that also reflective of the strong performance, and then the bonuses that were associated there?

Speaker #2: Okay. That's great. And are you I know it's really early, Gary, but are you seeing any signs of at least an APAC and EMEA in terms of some increased optimism in saying, "Okay.

Speaker #1: You know, I think the reality is we had pretty broad-based growth across the firm, Mark. The exception is, you know, the Middle East.

Speaker #2: Looks like things are finally getting back to normal and we should see a decent burst."

Speaker #1: And I didn't finish my answer to George. Hopefully, you know, what we've seen in every crisis is opportunity. But we've also seen in every crisis, there's pent-up demand.

Speaker #4: We just had a bunch of colleagues together from all over actually, all over the world about 700 of our partners and principals and there is definite hope.

Speaker #1: And so, I do believe, as hopefully the skies clear here and oil starts to flow through the strait, you're probably going to see some pent-up demand.

Speaker #4: Can I say so far this month, have we seen it? Not materially, but I do think that calmer minds will prevail here. And there's probably going to be some pent-up demand for sure.

Speaker #1: It may be six months out, but there's no doubt that, you know, that's had an impact on the levels of new business, for sure.

Speaker #1: But I would say, Mark, that it was pretty broad-based.

Speaker #2: That's great. Thanks, Gary.

Speaker #2: Okay, that’s great. And are you—I know it’s really early, Gary—but are you seeing any signs of, you know, at least in APAC and EMEA, in terms of, you know, some increased optimism in saying, okay, it looks like things are finally getting back to normal and we should see a decent burst?

Speaker #1: Your next question comes from Tobey Sommer with Truist. Your line is open.

Speaker #2: Thank you.

Operator: Ladies and gentlemen, thank you for standing by and welcome to the Korn Ferry Q4 fiscal year 2026 Conference Call. At this time, all participants are in a listen-only mode. Following the prepared remarks, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded for replay purposes. We have also made available, in the Investor Relations section of our website at kornferry.com, a copy of the financial presentation that we will be reviewing with you today. Before I turn the call over to your host, Mr. Gary Burnison, let me first read a cautionary statement to investors. Certain statements made in the call today, such as those relating to future performance, plans, and goals, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Korn Ferry Q4 Fiscal Year 2026 Conference Call. At this time, all participants are in a listen-only mode. Following the prepared remarks, we will conduct a question and answer session. As a reminder, this conference call is being recorded for replay purposes. We have also made available, in the Investor Relations section of our website at kornferry.com, a copy of the financial presentation that we will be reviewing with you today. Before I turn the call over to your host, Mr. Gary Burnison, let me first read a cautionary statement to investors. Certain statements made in the call today, such as those relating to future performance, plans, and goals, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Speaker #4: I wanted to ask about what initiatives or changes you have in place maybe it dovetails into the new segment reporting. To drive that 29% of reference sales to a higher level.

Speaker #1: We just, you know, we just had a bunch of colleagues together from, you know, all over, actually, all over the world, about 700 of our partners and principals.

Speaker #4: Is there an accompanying sort of change in incentive comps in addition to reporting structure? What levers are inside the fold?

Speaker #1: And there is definitely hope. Can I say, you know, so far this month, have we seen it? Not materially, but I do think that, you know, calmer minds will prevail here.

Speaker #3: Hey, Tobey. It's Bob. Yeah. One of the things I've noticed if you go again, if you go back and you look at the program that we've had in place to drive that, way back in, I think it was 2018 or 2019, it was 14%.

Speaker #1: And there's probably going to be some pent-up demand, for sure.

Speaker #2: That's great. Thanks, Gary.

Speaker #3: And we put the program in place. And every year, we continue to open it up for more people, make it a little bit richer.

Speaker #3: Your next question comes from Toby Summer with Truist. Your line is open.

Speaker #3: And we saw success up to a point, right? And we kind of got stuck at 25%. And we're there for whatever it was, four or five quarters in a row.

Operator: Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, investors are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, which are beyond the company's control. Additional information concerning such risks and uncertainties can be found in the release relating to this presentation and in the periodic and other reports filed by the company with the SEC, including the company's soon-to-be-filed annual report for fiscal year 2026. Some of the comments today may reference non-GAAP financial measures such as constant currency amounts, EBITDA, and adjusted EBITDA.

Operator: Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, investors are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties, which are beyond the company's control. Additional information concerning such risks and uncertainties can be found in the release relating to this presentation, and in the periodic and other reports filed by the company with the SEC, including the company's soon-to-be-filed annual report for fiscal year 2026. Some of the comments today may reference non-GAAP financial measures, such as constant currency amounts, EBITDA, and adjusted EBITDA.

Speaker #2: Thank you. I wanted to ask about what initiatives or changes you have in place—maybe it dovetails into the new segment reporting—to drive that 29% of reference sales to a higher level.

Speaker #3: And then use Gary's phrase from one of his earlier responses. It really is about changing mindset now. And what we're doing, literally, we get together we get those emails every day.

Speaker #3: We get together every other Monday we go through the opportunities that arose over the prior two weeks. We go through all of our what we call must wins.

Speaker #2: Is there an accompanying sort of change in incentive comps, in addition to the reporting structure? What levers are you trying to pull?

Speaker #4: Hey, Toby, it's Bob. Yeah, you know, one of the things I've noticed — you know, if you go back and you look at the program that we've had in place to drive that, way back in, I think it was 2018 or 2019 — it was 14%.

Speaker #3: Those are engagements over a certain threshold. We go through all of our marketing and diamond accounts. And it's every two weeks. And the collaboration network getting and the mindset change that we're getting from our folks I think is actually what's influenced us to go from the 25 to 27.

Speaker #4: And we put the program in place, and every year we continue to open it up for more people, make it a little bit richer.

Operator: Additional information concerning these measures, including reconciliations to the most directly comparable GAAP financial measure, is contained in the financial presentation and earnings release relating to this call, both of which are posted in the Investor Relations section of the company's website at kornferry.com. With that, I'll turn the call over to Mr. Burnison. Please go ahead, Mr. Burnison.

Operator: Additional information concerning these measures, including reconciliations to the most directly comparable GAAP financial measure, is contained in the financial presentation and earnings release relating to this call, both of which are posted in the investor relations section of the company's website at kornferry.com. With that, I'll turn the call over to Mr. Burnison. Please go ahead, Mr. Burnison.

Speaker #3: Because I've made the program richer. Again, we've broadened it out. And we were kind of stuck. I think this next level of achievement is really driven by the behaviors and practices that we're putting in place at the organization.

Speaker #4: And we saw success up to a point, right? And we kind of got stuck at 25%. And we were there for, whatever it was, four or five quarters in a row.

Speaker #4: And then, to use Gary's phrase from one of his earlier responses, it really is about changing the mindset now. What we're doing—literally—we get together, we get those emails every day, we meet every other Monday, we go through the opportunities that arose over the prior two weeks, and we review all of our, what we call, must-wins.

Speaker #2: In consulting, can you talk about the degree to which some of your services because I know it's a broad array of things that you're doing.

Gary Burnison: Okay. Thank you, Sara, and thank you, everybody, for joining us. I'm going to let our team walk through the numbers, but our quarterly performance was outstanding. It marks our fifth consecutive Q4 of top-line growth, underscoring the strength of our strategy. Let me first reflect for a moment. On these calls, I used to talk about opportunities measured in hundreds of millions of dollars. Today, I think in terms of opportunities measured in billions of dollars, far beyond where we are today. In leadership, we spend a lot of time talking about the what, the how, and the when. Too often, though, the why and the who get overlooked. Despite all of Korn Ferry's success and evolution, our why has never changed: enabling people and organizations to be more than. I was reminded of that a few months ago while I was traveling in the Midwest.

Gary Burnison: Okay. Thank you, Sara, and thank you, everybody, for joining us. I'm going to let our team walk through the numbers, but our quarterly performance was outstanding. It marks our fifth consecutive Q4 of top-line growth, underscoring the strength of our strategy. Let me first reflect on a moment. On these calls, I used to talk about opportunities measured in hundreds of millions. Today, I think in terms of opportunities measured in $ billions, far beyond where we are today. In leadership, we spend a lot of time talking about the what, the how, and the when. Too often, though, the why and the who get overlooked. Despite all of Korn Ferry's success and evolution, our why has never changed. Enabling people and organizations to be more than. I was reminded of that a few months ago while I was traveling in the Midwest.

Speaker #2: Are priced on a value basis as opposed to time and materials and just average bill rates and hours billed to the client? And. Do you see it transforming at all?

Speaker #4: Those are engagements over a certain threshold. We go through all of our marketing and diamond accounts, and that's every two weeks. The collaboration that we're getting and the mindset change that we're seeing from our folks, I think, is actually what's influenced us to go from 25 to 27.

Speaker #4: Yeah, I do. I actually do. I think even there's a number of solutions that could actually transform, including search. It's pretty it's kind of archaic how the industry does that.

Speaker #4: Because I've made the program richer. Again, we've broadened it out, and we were kind of stuck. I think this next level of achievement is really driven by the behaviors and practices that we're putting in place at the organization.

Speaker #4: I think there's now an opportunity once you get to a scale that you can actually change the paradigm. So it could search be sold as a service.

Speaker #4: Could you sign up as a retainer? I do believe that there is the opportunity and we're pushing the team, particularly on the consulting side, to look at value because up to this point, it's been pretty much the old method.

Speaker #2: In consulting, can you talk about the degree to which some of your services—because I know it's a broad array of things that you're doing—are priced on a value basis, as opposed to, you know, time and materials and just average bill rates and hours billed to the client?

Gary Burnison: Out of nowhere, I heard the sound of a train horn, which I hadn't heard in years. It wasn't the sound that struck me—it was that feeling. In an instant, I was taken back to where I was raised, where trains ran next to our house. That moment peeled back the years and made me reflect on the essence of who we are and what we do. As I think about the Korn Ferry of today, this image feels particularly relevant. We're at the intersection of a present that feels far different from our past, and a future that will be even brighter than today. That's why our foundational headmark is evolving from One Korn Ferry to We Are Korn Ferry. We Are Korn Ferry begins with deep client centricity and expanding the breadth of the solutions we deliver within every client relationship.

Gary Burnison: Out of nowhere, I heard the sound of a train horn, which I hadn't heard in years. It wasn't the sound that struck me, it was that feeling. In an instant, I was taken back to where I was raised, where trains ran next to our house. That moment peeled back the years and made me reflect about the essence of who we are and what we do. As I think about the Korn Ferry of today, this image feels particularly relevant. We're at the intersection of a present that feels far different than our past, and a future that will even be brighter than today. That's why our foundational head mark is evolving from one Korn Ferry to We are Korn Ferry. We are Korn Ferry begins with deep client centricity and expanding the breadth of our solutions we deliver within every client relationship.

Speaker #4: I mean, not totally, but that's probably truer than not. And I'm pretty convinced of the value that we bring. You have to align strategy with an organization, with people, with compensation, how you develop people.

Speaker #2: And.

Speaker #1: Yeah, well, we're first.

Speaker #2: Would it be transforming at all?

Speaker #1: Yeah, I do. I actually do. I think there are a number of solutions that could actually transform, including search. You know, it's pretty—it's kind of archaic how the industry does that.

Speaker #4: I just know out of all my years as CEO, it's about people. It's about talent. Players win games. Coaches lose games. So we're challenging the team.

Speaker #1: I think there's now an opportunity, once you get to a scale, that you can actually change the paradigm. So, you know, could search be sold as a service?

Speaker #4: I can't say that we haven't answered today. But I would expect that to change quite a bit, actually, over the next three years. I wouldn't be a bit surprised by that.

Speaker #1: You know, could you sign up as a retainer? I do believe that there is the opportunity, and we're pushing the team, particularly on the consulting side, to look at value, because up to this point it's been pretty much, you know, the old method.

Speaker #2: The bill rates in consulting that you report currently, are they an imputed bill rate or is that literally the average rate that clients are seeing on invoices?

Gary Burnison: There are just a few examples during the quarter. A Fortune 50 tech company that turned to us to accelerate their sales organization, or a global professional services firm that looked to us as their sole source of interim technology talent. I could go on and on. Including in the quarter, we won a number of substantial RPO engagements spanning multiple industries across all three regions. When we take a client-centric approach, leverage our relationships across geographies, and deliver impact with the totality of the firm, we build sustainable relationships of scale. Over the last several months, I've looked in the mirror and realized that what got us here, by itself, is not what will get us there. To reach our destination, we need to shift our mindset. That's when our whole becomes bigger than the sum of our parts.

Gary Burnison: There are just a few examples during the quarter. A Fortune 50 tech company that turned to us to accelerate their sales organization, or a global professional services firm to look to us as their sole source of interim technology talent. I could go on and on and on. Including in the quarter, we won a number of substantial RPO engagements, spanning multiple industries, across all three regions. When we take a client-centric approach and we leverage our relationships across geographies and deliver impact with the totality of the firm, we build sustainable relationships of scale. Over the last several months, I've looked in the mirror and realized that what got us here by itself is not what will get us there. To reach our destination, we need to shift our mindset. That's when our whole becomes bigger than the sum of our parts.

Speaker #1: I mean, not totally, but you know, that's probably truer than not. And I'm pretty convinced of the value that we bring. You know, you have to align strategy with an organization—with people, with compensation, how you develop people.

Speaker #4: Well, I'm not going to say what they'd see on invoices. But that's a real range. I mean, that's a real economic rate per hour.

Speaker #4: For sure.

Speaker #3: Yeah. Tobey, you basically take our fee revenues and divide the hours worked into it to come up with the average billing rate would be.

Speaker #1: You know, I just know out of all my years as CEO, it's about people. It's about talent—you know, players. Players win games, coaches lose games.

Speaker #4: But again, just to be clear, to answer the question correctly, we may not engage with a client in that way. We will say for a project, phase one is this.

Speaker #1: So we're challenging the team. I can't say that we haven't answered today, but I would expect that to change quite a bit, actually, over the next three years.

Speaker #4: Phase two is that. So we don't sit there and charge like a law firm would by the hour. That's not so I don't want to give you the wrong impression.

Speaker #1: I wouldn't be a bit surprised by that.

Speaker #2: The bill rates in consulting that you report currently—are they an imputed bill rate, or is that literally the average rate that clients are seeing on invoices?

Speaker #4: But I do believe in terms of the spirit of your question, around value, I think there's something there.

Speaker #1: Well, I'm not going to say what they see on invoices, but that's a real range. I mean, that's a real economic rate per hour.

Speaker #2: And if I sneak one last one in. With respect to the executive search business and AI, private companies say that they can do some of the intermediate steps in delivery along a search process more efficiently, but customers just ask for more, want to see more candidates, etc.

Speaker #1: For sure.

Speaker #4: Yeah, Toby, you basically take our fee revenues and divide the hours worked into it to come up with what the average billing rate would be.

Speaker #1: But again, just to be clear, so that I answer the question correctly, we may not engage with a client in that way. We will say, for a project, Phase One is this, Phase Two is that.

Gary Burnison: As such, I want our industries to be accelerators; our solutions to be innovators and enablers; and our geographies to be the integrators. Starting in this quarter, Q1, our external reporting segments are going to be reflected through a regional lens of the Americas, EMEA, and APAC. Our solution-level detail will be provided in three categories: Search, comprised of Executive Search and Professional Search; Talent and Organizational Solutions, comprised of Digital and Consulting; and finally, Workforce Solutions, comprised of RPO and Interim. These categories serve our clients across the entire talent continuum. Search is about identifying talent; Workforce Solutions is about scaling talent; and Talent and Organizational Solutions is about unlocking potential. Grouping our solutions like this more accurately reflects how work is done today and orients our services to the competitive landscape and the way clients buy these solutions.

Gary Burnison: As such, I want our industries to be accelerators, our solutions to be innovators and enablers, and our geographies to be the integrators. Starting in this quarter, Q1, our external reporting segments are going to be reflected through a regional lens of the Americas, EMEA, and APAC. Our solution-level detail will be provided in 3 categories: Search, comprised of Executive Search and Professional Search. Talent and Organizational Solutions, comprised of digital and consulting. Finally, Workforce Solutions, comprised of RPO and interim. These categories serve our clients across the entire talent continuum. Search is about identifying talent, Workforce Solutions is about scaling talent, and Talent and Organizational Solutions is about unlocking potential. Grouping our solutions like this more accurately reflects how work is done today and orients our services to the competitive landscape and the way the clients buy these solutions.

Speaker #2: So they're kind of neither experiencing margin expansion from inefficiencies nor faster time to completion or price erosion. What's your experience in that realm?

Speaker #1: So, we don't sit there and charge like a law firm would—by the hour. That's not—so I don't want to give you the wrong impression.

Speaker #4: We have 17 work streams, five are anchored around search. And what we're concerned about there clearly, what the efforts are showing us is we can be way more efficient.

Speaker #1: But I do believe, in terms of the spirit of your question around value, I think there's something there.

Speaker #4: No doubt about it. That's now been proven. Over the last year, on these five work streams out of the 17, no doubt about it.

Speaker #2: And if I sneak one last one in—with respect to the executive search business and AI—private companies say that they can do some of the intermediate steps in delivery along a search process more efficiently, but customers just ask for more, want to see more candidates, etc.

Speaker #4: But what we're very, very mindful of, where we operate, is that we have tremendous IP. And we use that IP when assessing candidates, when we do it in our consulting solution.

Speaker #2: So they're kind of neither experiencing margin expansion from inefficiencies nor faster time to completion, or, you know, price erosion. What's your experience in that realm?

Speaker #4: We use the same IP throughout the entire firm. We use it in our RPO solution as well. What we are very, very protective of is we don't want that proprietary data to get outside.

Speaker #1: We have 17 workstreams; five are anchored around search. And, you know, what we're concerned about there clearly, what, you know, the efforts are showing us is we can be way more efficient.

Gary Burnison: I'm confident that amid all the changes in the world today, it can also be the best environment—where good companies become even greater, aligning to opportunities ahead. I'm also incredibly proud, enormously proud, of our colleagues around the world. Their expertise and passion are the catalyst as we change people's lives, unlock the potential in people, and unleash transformation across organizations. With that, I'll turn the call over to Bob. Bob, go ahead.

Gary Burnison: I'm confident that amid all the changes in the world today, it can also be the best environment, where good companies become even greater, aligning to opportunities ahead. I'm also incredibly proud, enormously proud of our colleagues around the world. Their expertise and passion are the catalyst as we change people's lives, unlock the potential in people, and unleash transformation across organizations. With that, I'll turn the call over to Bob. Bob, go ahead.

Speaker #4: And so as we go down this path, for me, anybody can generate a name. And it's not what they've done; it's who they are.

Speaker #1: No doubt about it. You know, that's now been proven. Over the last year, on these five work streams out of the 17, no doubt about it.

Speaker #4: And when you're talking about the outliers of achievement here, I'm still going to put a very, very strong argument forward that it's around culture fit.

Speaker #1: But what we're very, very mindful of, wherever we operate, is that we have tremendous IP. And we use that IP when assessing candidates, and when we do it in our consulting solution.

Speaker #4: And we're not human doings. We're human beings. AI is not going to disintermediate humanity. Will technology make us more efficient? Yes. Will it solve the supply and demand imbalance of labor absent immigration?

Robert Rozek: Great, thanks Gary. Good afternoon and good morning, everybody. I would be remiss if I didn't start by saying thank you to all the colleagues Gary was just referring to, as fiscal 2026 was another outstanding year for Korn Ferry. Despite uneven market conditions and an uncertain macro environment, we achieved a new fee revenue high and delivered very strong earnings. We continue to skillfully execute our 'We Are Korn Ferry' go-to-market strategy, integrating our intellectual property data along with our consulting capabilities to drive enterprise-wide results for our clients. We continue to demonstrate how we're different—we are different—growing for the fifth consecutive quarter while others in the industry continue to contract or just perform less well. Our results demonstrate the resilience and effectiveness of our strategy and the benefits of our diversified business model.

Robert Rozek: Great. Thanks, Gary, good afternoon and good morning, everybody. I would be remiss if I didn't start by saying thank you to all the colleagues Gary was just referring to, as fiscal 2026 was another outstanding year for Korn Ferry. Despite uneven market conditions, uncertain macro environment, we achieved a new fee revenue high and delivered very strong earnings. We continue to skillfully execute our We Are Korn Ferry go-to-market strategy, integrating our intellectual property data, along with our consulting capabilities, to drive enterprise-wide results for our clients. We continue to demonstrate how we're different, we are different. Growing for the fifth consecutive quarter while others in the industry continue to contract or just perform less worse. Our results demonstrate the resilience and effectiveness of our strategy and the benefits of our diversified business model.

Speaker #1: We use the same IP throughout the entire firm. We use it in our RPO solution as well. What we are very, very protective of is that we don't want that proprietary data to get outside.

Speaker #4: Yes. Will it make our firm more efficient? For sure. That's what the 17 work streams are showing. But at the same time, we want to make sure that we protect our IP particularly that we're operating in 70 countries, 100 countries around the world with different privacy laws.

Speaker #1: And so, as we go down this path, for me, anybody can generate a name. And it's not what they've done; it's who they are.

Speaker #1: And when you're talking about the outliers of achievement here, I'm still going to put a very, very strong argument forward that it's around culture fit.

Speaker #4: We are very, very careful about letting that out. That's we're in the trust business. And so we I'm not that focused on the efficiency gain for the search process that we're going to get from AI.

Speaker #1: And, you know, we're not human doings—we're human beings. AI is not going to disintermediate humanity. Will technology make us more efficient? Yes. Will it solve the supply and demand imbalance of labor?

Speaker #4: Are we doing it? Yes. We're absolutely doing it. But I'm focused on the customer experience. And so we have a lot of things in motion there but I'm telling you, I'm going to be very conservative around who people are, what they tell us, what their assessments show.

Robert Rozek: We continue to evolve into a comprehensive organizational and talent solutions partner for all of our clients. We perform differently because we're not simply a monoline transactional business. We're a diversified, data- and IP-driven talent advisory with multiple synergistic revenue streams and growing earnings power. Let me turn to our Q4 performance. This will be in addition to the detailed results in the earnings presentation that we posted. I'm going to provide you with a couple of company-wide and solution-specific highlights for the quarter. For Q4, our ending estimated remaining fees under existing contracts grew 10% year-over-year to almost $1.9 billion, with growth in every solution. Our business referral rate increased to 29.1% of consolidated fee revenue in Q4, up by about 320 basis points. Our Marquee and Diamond account penetration remained strong at 40% of our consolidated fee revenue.

Robert Rozek: We continue to evolve into a comprehensive organizational and talent solution partner for all of our clients. We perform differently because we're not simply a monoline transactional business. We're a diversified, data- and IP-driven talent advisory with multiple synergistic revenue streams and growing earnings power. Let me turn to our Q4 performance. This will be in addition to the detailed results in the earnings presentation that we posted. I'm going to provide you a couple of company-wide and solution-specific highlights for the quarter. For Q4, our ending estimated remaining fees under existing contracts grew 10% year-over-year to almost $1.9 billion, with growth in every solution. Our business referral rate increased to 29.1% of consolidated fee revenue in Q4, up by about 320 basis points. Our Marquee and Diamond account penetration remained strong at 40% of our consolidated fee revenue.

Speaker #1: Absent immigration, yes. Will it make our firm more efficient? For sure. That's what the 17 workstreams are showing. But at the same time, we want to make sure that we protect our IP, particularly given that we're operating in, you know, 70 countries—100 countries—around the world with different privacy laws.

Speaker #4: We've done 113 million assessments of executives. We have to guard that data. And that is a big, big differentiator for us. So yes, we're definitely using it.

Speaker #1: We are very, very careful about letting that out. You know, we're in the trust business. So, you know, I'm not that focused on the efficiency gain for the search process that we're going to get from AI.

Speaker #4: We're using it as in the learning and development solution. In terms of coaching. Using agents. And we can all have different views on that.

Speaker #4: But clearly, we're headed in a direction where technology is going to have to fill the gap between supply and demand imbalance of labor.

Speaker #1: Are we doing it? Yes, we're absolutely doing it. But I'm focused on the customer experience. So, you know, we have a lot of things in motion there, but I'm telling you, I'm going to be very conservative around who people are, what they tell us, and what their assessments show.

Speaker #1: You're final question. We'll come from the line of Josh Chan with UBS. Your line is open.

Speaker #2: Hi. This is Korn from Audiology for Josh. Thanks for taking my questions. I wanted to ask on the North America executive search business. It looks like margins in the business have been pretty strong.

Robert Rozek: Both these metrics really demonstrate the effectiveness of our We Are Korn Ferry go-to-market strategy. Executive Search grew 7% in Q4 and has now grown for eight consecutive quarters. Professional Search and Interim fee revenue was up 14%, with 17% growth in Professional Search and 12% growth in Interim. Our Interim solution continues to perform better than other industry players, driven by both strong business referrals and expanding bill rates. Digital subscription and license fee revenue was up 10% year-over-year. Last, our Consulting fee revenue grew 7%, driven by an increase in larger engagements and stronger bill rates. Let me turn to overall company results. For the full year, fee revenue was about $2.9 billion, up 7%. We delivered close to $500 million in adjusted EBITDA, also up 7%. Adjusted EPS of $5.28, which was also up 8%.

Robert Rozek: Both these metrics really demonstrate the effectiveness of our We Are Korn Ferry go-to-market strategy. Executive Search grew 7% in the Q4 and has now grown for eight consecutive quarters. Professional Search and Interim fee revenue was up 14%, with 17% growth in Professional Search and 12% growth in Interim. Our Interim solution continues to perform better than other industry players, driven by both strong business referrals and expanding bill rates. Digital subscription and license fee revenue was up 10% year-over-year. Last, our consulting fee revenue grew 7%, driven by an increase in larger engagements and stronger bill rates. Let me turn to overall company results. For the full year, fee revenue was about $2.9 billion, up 7%. We delivered close to $500 million in adjusted EBITDA, also up 7%. Adjusted EPS of $5.28, which was also up 8%.

Speaker #1: We've done 113 million assessments of executives. We have to guard that data, and that is a big, big differentiator for us. So yes, we're definitely using it.

Speaker #2: It was like 31% this quarter. So just wondering how should we think about margins for the segment for this year?

Speaker #1: We're using it in the learning and development solution, in terms of coaching—you know, using agents. And we can all have different views on that.

Speaker #4: I would say that the margin profile, again, I wouldn't focus necessarily on search in North America because it's a pretty big company. And we got a lot of levers to pull.

Speaker #1: But clearly, we're headed in a direction where technology is going to have to fill the gap between the supply and demand imbalance of labor.

Speaker #4: I would just keep you focused on the range that we've talked about from an overall Korn FERRY perspective in the 16 to 18 percent.

Speaker #4: We guide it to Q1, right, snack in the middle of that, 17%. And that's how we're managing the business. So we don't to Gary's point earlier, when you think about the mindset change, right, we can't look at clients and go to market one way and then manage internally a different way.

Speaker #3: Your final question will come from the line of Josh Chen with UBS. Your line is open.

Speaker #2: Hi, this is Karen Singh, audiologist for Josh. Thanks for taking my questions. I wanted to ask, under a North America executive search business, it looks like margins in the business have been pretty strong.

Speaker #4: So as Gary said, we're one firm. We got five offerings. But we're managing the firm as one firm. So I'd suggest that you just focus on the 16 to 18 percent.

Speaker #2: It was like 31% this quarter. So, just the segment for this year?

Robert Rozek: Focusing on the fourth quarter, we grew for the fifth consecutive quarter, as Gary mentioned, with consolidated fee revenue up 7%, reaching $760 million. Earnings and profitability also remained strong. Adjusted EBITDA grew $8 million, or 7%, to $130 million. Adjusted EBITDA margin remained very strong at 17%. Adjusted diluted earnings per share grew $0.08, or 6%, to $1.40. Total company new business grew 2% when you exclude RPO, and 4% when you include it. The RPO business itself won $137 million of new business in the fourth quarter, and 74% of that came from new logos. As I previously mentioned, estimated remaining fees under existing contracts at the end of the fourth quarter were almost $1.9 billion.

Robert Rozek: Focusing on the Q4, we grew for the fifth consecutive quarter, as Gary mentioned, with consolidated fee revenue up 7%, reaching $760 million. Earnings and profitability also remained strong. Adjusted EBITDA grew $8 million, or 7%, to $130 million. Adjusted EBITDA margin remained very strong at 17%, adjusted diluted earnings per share grew $0.08, or 6%, to $1.40. Total company new business grew 2% when you exclude RPO, 4% when you include it. The RPO business itself won $137 million of new business in the Q4, and 74% of that came from new logos. As I previously mentioned, estimated remaining fees under existing contracts at the end of the Q4 were almost $1.9 billion.

Speaker #2: Okay. Got it. And as my follow-up, how should we think about the capital allocation priorities for this year? Would you continuously lean more heavily towards buybacks and also on capex?

Speaker #1: I would say that, you know, the margin profile—again, I wouldn't focus necessarily on Search in North America, as we get—it's a pretty big company and we've got a lot of levers to pull.

Speaker #1: I would just keep you focused on the range that we've talked about from an overall Korn Ferry perspective, in the 16% to 18% range. You know, we guided to Q1, right?

Speaker #2: Do you expect it to come back to a more normalized levels this year?

Speaker #4: Well, we typically, over time, we've deployed a pretty balanced approach systematic approach to capital deployment. Clearly, in this last quarter, as we said we were going to do on the last call, and as Bob mentioned earlier, we did what we said.

Speaker #1: You know, smack in the middle of that, 17%. And that's how we're managing the business. So we don't, you know — to Gary's point earlier — when you think about the mindset change, right?

Speaker #1: We can't look at clients and go to market one way, and then manage internally a different way. So, as Gary said, we're one firm.

Speaker #4: Clearly, when you look at the firm, over the last 10, 15 years, 20 years, 60% of our growth has been organic. And 40% has been inorganic.

Speaker #1: We have five offerings, but we're managing the firm as one firm. So I'd suggest that you just focus on the 16% to 18%.

Speaker #2: Okay, got it. And as my follow-up, how should we think about the capital allocation priorities for this year? Would you continue to lean more heavily towards buybacks, and also on capex?

Speaker #4: And the last investment that we made was in the interim. Solution, which was an organization in the UK and Ireland. And it's been an absolute home run for us.

Robert Rozek: Fifty-seven percent, or about $1 billion of that, is projected to be recognized within the next year, and the remaining 43%, or $800 million or so, is going to be recognized beyond the next four quarters. Looking at our regional results, fee revenue in the Americas was up 8%, with strength in Executive Search, Professional Search and Interim, and RPO. EMEA fee revenue also grew 8%, with strong growth in Consulting and Professional Search and Interim. Our Asia Pacific fee revenue was kind of flat year-over-year. Finally, we continue to maintain a disciplined approach to capital allocation. In Q4, we purchased 1.24 million shares using approximately $78 million. Now, if you remember when we talked on our last earnings call, we said we're going to lean more heavily into buybacks, and that's exactly what we did.

Robert Rozek: 57%, or about $1 billion of that, is projected to be recognized within the next year, and the remaining 43%, or $800 million or so, is going to be recognized beyond the next four quarters. Looking at our regional results, fee revenue in the Americas up 8%, with strength in Exec Search, Pro Search, and Interim, and RPO. EMEA fee revenue also grew 8%, with strong growth in consulting and Professional Search and Interim. Our Asia Pacific fee revenue was kind of flat year-over-year. Finally, we continue to maintain a disciplined approach to capital allocation. In Q4, we purchased 1.24 million shares using approximately $78 million. Now, if you remember when we talked on our last earnings call, we said we're going to lean more heavily into buybacks, and that's exactly what we did.

Speaker #2: Do you expect it to come back to more normalized levels this year?

Speaker #4: And that was almost two years ago. So we've there's been periods of time where we've leaned more into stock buybacks, we've been consistently raising our dividend for, I don't know, six or seven years.

Speaker #1: Oh, you know, we typically, over time, we've, you know, deployed a pretty balanced approach systematic approach to capital deployment. You know, clearly in this last quarter, as we said, we were going to do on the last call, and as Bob mentioned earlier, we did what we said.

Speaker #4: And there's times when we lean more into inorganic growth.

Speaker #1: You know, clearly when you look at the firm, over, you know, the last 10, 15 years, 20 years, you know, 60% of our growth has been organic.

Speaker #2: Got it. That's helpful. Thank you.

Speaker #1: Is there no further questions, Mr. Burnison?

Speaker #4: Okay, Sarah. Thank you for hosting. Thank you for everybody for joining us. And we'll talk to you soon. Thanks, everybody.

Speaker #1: And 40% has been inorganic. And, you know, the last investment that we made was in the Interim Solutions, which was an organization in the UK and Ireland.

Speaker #1: Ladies and gentlemen, this conference call will be available for replay for one week starting today, running through the day June 30th, 2026, ending at midnight.

Robert Rozek: For all of fiscal 2026, we returned $221 million to shareholders through the combination of share repurchases and dividends, invested $85 million into CapEx for the development of Talent Suite and the delivery of other productivity tools for our other solutions. Now, turning to our outlook for Q1 of fiscal 2027, assuming no further changes in worldwide geopolitical conditions, economic conditions, financial markets, foreign exchange rates, we expect fee revenue to range from $725 to 745 million. Our adjusted EBITDA margin to be right around 17%, and our consolidated adjusted diluted earnings per share to range from $1.32 to $1.38. Now, before I conclude, as Gary mentioned earlier, the company will continue to build on our We Are Korn Ferry go-to-market strategy. We expect this initiative to continue to drive deeper client penetration and industry-leading growth.

Robert Rozek: For all of fiscal 2026, we returned $221 million to shareholders through the combination of share repurchases and dividends, invested $85 million into CapEx for the development of Talent Suite and the delivery of other productivity tools for our other solutions. Now, turning to our outlook for Q1 of fiscal 2027, assuming no further changes in worldwide geopolitical conditions, economic conditions, financial markets, foreign exchange rates, we expect fee revenue to range from $725 to 745 million. Our adjusted EBITDA margin to be right around 17%, and our consolidated adjusted diluted earnings per share to range from $1.32 to $1.38. Now, before I conclude, as Gary mentioned earlier, the company will continue to build on our We Are Korn Ferry go-to-market strategy. We expect this initiative to continue to drive deeper client penetration and industry-leading growth.

Speaker #1: You may access the echo replay service by dialing 800-770-2030 and entering the access code 4218957 followed by the pound key additionally, the replay will be available for playback at the company's website www.kornferry.com in the investor relations section Thank you for joining.

Speaker #1: And it's been an absolute home run for us. And that was almost two years ago. So, you know, there's been periods of time where we've leaned more into stock buybacks. We've been consistently raising our dividend for, I don't know, six or seven years.

Speaker #1: And there are times when we lean more into inorganic growth.

Speaker #2: Got it. That's helpful. Thank you.

Speaker #3: Are there no further questions, Mr. Bernison?

Speaker #1: Okay, Sarah, thank you for hosting. Thank you, everybody, for joining us, and we'll talk to you soon. Thanks, everybody.

Speaker #3: Ladies and gentlemen, this conference call will be available for replay for one week starting today, running through June 30, 2026, and ending at midnight.

Speaker #3: You may access the ECHO replay service by dialing 800-770-2030 and entering the access code 4218957, followed by the pound key. Additionally, the replay will be available for playback on the company's website, www.kornferry.com, in the investor relations section. Thank you for joining.

Robert Rozek: Through this initiative, we are orienting more towards regions for our integrators, as Gary said. This will also result in a change to the company's financial reporting segments. As Gary mentioned, beginning in Q1 of fiscal 2027, our external reporting segments will transition from global solution-based presentation to three regional reporting segments: the Americas, EMEA, and Asia Pacific. The region segment results will include fee revenue and profitability through adjusted EBITDA, and then we'll continue to provide solution-level results for new business, fee revenue, and estimated remaining fees under existing contracts through the three solution groupings. Again, Search, Executive Search and Professional Search, Talent and Organizational Solutions, comprised of Consulting and Digital, and Workforce Solutions, comprised of RPO and Interim.

Robert Rozek: Through this initiative, we are orienting more towards regions for our integrators, as Gary said. This will also result in a change to the company's financial reporting segments. As Gary mentioned, beginning in Q1 of fiscal 2027, our external reporting segments will transition from global solution-based presentation to three regional reporting segments: the Americas, EMEA, and Asia Pacific. The region segment results will include fee revenue and profitability through adjusted EBITDA, and then we'll continue to provide solution-level results for new business, fee revenue, and estimated remaining fees under existing contracts through the three solution groupings. Again, Search, Executive Search and Professional Search, Talent and Organizational Solutions, comprised of Consulting and Digital, and Workforce Solutions, comprised of RPO and Interim.

Robert Rozek: We really believe this reporting structure better reflects how work is delivered across the firm, aligns much more closely with how our clients are actually buying our services, and better enables our We Are Korn Ferry operating model. Now, to assist folks in understanding the impact of these changes, the company will be providing recast supplemental unaudited information containing historical financial information for the three reporting segments following the filing of our Q1 FY 2027 10-Q in September. In addition, our Q1 FY 2027 press release will reflect the new reporting segments, and the investor presentation that we will post to our website will reflect both the new reporting segments and the selected financial data previously mentioned for our three solution groupings.

Robert Rozek: We really believe this reporting structure better reflects how work is delivered across the firm, aligns much more closely with how our clients are actually buying our services, and better enables our We Are Korn Ferry operating model. Now, to assist folks in understanding the impact of these changes, the company will be providing recast supplemental unaudited information containing historical financial information for the three reporting segments following the filing of our Q1 FY 2027 10-Q in September. In addition, our Q1 FY 2027 press release will reflect the new reporting segments, and the investor presentation that we will post to our website will reflect both the new reporting segments and the selected financial data previously mentioned for our three solution groupings.

Robert Rozek: Now, in conclusion, we continue to be extremely encouraged by the strength of our business, the progress we've made executing our strategy, and the continued trust our clients place in Korn Ferry. Our diversified portfolio, global scale, and integrated solutions position us well to navigate through any business environment. We are going to continue to invest in our people and our platforms and drive our long-term growth opportunities. We remain focused on driving performance, delivering value to our clients and shareholders, and we look forward to continuing with industry-leading, differentiated success in the year ahead. With that, we would be glad to answer any questions you may have.

Robert Rozek: Now, in conclusion, we continue to be extremely encouraged by the strength of our business, the progress we've made executing our strategy, and the continued trust our clients place in Korn Ferry. Our diversified portfolio, global scale, and integrated solutions position us well to navigate through any business environment. We are going to continue to invest in our people, our platforms, and drive our long-term growth opportunities. We remain focused on driving performance, delivering value to our clients and shareholders, and we look forward to continuing with industry-leading differentiated success in the year ahead. With that, we would be glad to answer any questions you may have.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Our first question comes from Trevor Romeo with William Blair. Your line is open.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Our first question comes from Trevor Romeo with William Blair. Your line is open.

Trevor Romeo: Hi, thanks so much for taking the questions. I had a couple on the Executive Search business. First of all, I think in the press release you mentioned kind of winning more work at the higher levels of the organization. I wanted to dig in there. When you talk about the higher levels of the organization, is that primarily Korn Ferry gaining market share in those areas, or is it some kind of shift among the client base, and is that a sustainable trend that you would see continuing?

Trevor Romeo: Hi, thanks so much for taking the questions. I had a couple on the Executive Search business. I think first of all, I think in the press release you mentioned kind of winning more work at the higher levels of the organization. I wanted to dig in there. When you talk about the higher levels of the organization, is that primarily Korn Ferry gaining market share in those areas, or is it some kind of shift among the client base, and is that a sustainable trend that you would see continuing?

Robert Rozek: Well, I'll tell you that over the long run here, the brand around the Executive Search solution has certainly gone up market. You can just look at the climb in our average fees. The average fees are up almost 10% just over the last couple of years. If I go further back than that, it would be very dramatic. I think that we've proven that we can take the access that's afforded us and surround it with a lot of adjacent solutions that not only diversify the firm, but position us. I can think of six or seven—

Gary Burnison: Well, I'll tell you that over the long run here, the brand around the Executive Search solution has certainly gone up market. You can just look at the climb in our average fees. The average fees are up almost 10% just over the last couple years. If I go further back than that, it would be very dramatic. I think that we've proven that we can take the access that's afforded us and surround it with a lot of adjacent solutions that not only diversifies the firm, but positions us. I can think of six or seven