Highlights

Fee revenue in Q2 FY'25 was $674.4 million, a year-over-year decrease of 4%, flat on a sequential quarter basis.
Completed our sixth consecutive quarter of improved profitability:
- Operating income was $87.5 million and Adjusted EBITDA was $117.0 million.
- Operating margin increased 980bps year-over-year to 13.0%. Adjusted EBITDA margin was 17.4%, a 340bps increase compared to the year-ago quarter.
Net income attributable to Korn Ferry was $60.8 million, while diluted and adjusted diluted earnings per share were $1.14 and $1.21 in Q2 FY'25, respectively.
The Company repurchased 456,250 shares of stock during the quarter for $32.6 million.
Declared a quarterly dividend of $0.37 per share on December 4, 2024, which is payable on January 15, 2025 to stockholders of record on December 20, 2024.
On November 1, 2024, Korn Ferry completed the acquisition of Trilogy, a leading provider of technology/digital interim talent across Europe and in the United States, which will be included in the Professional Search & Interim segment starting in Q3 FY'25.

Korn Ferry (NYSE:KFY), a global organizational consulting firm, today announced second quarter fee revenue of $674.4 million. In addition, second quarter diluted earnings per share was $1.14 and adjusted diluted earnings per share was $1.21.

"I am pleased with our second quarter results, as we generated $674 million in fee revenue," said Gary D. Burnison, CEO, Korn Ferry. "Earnings and profitability increased year over year and sequentially as we delivered $117 million of Adjusted EBITDA, at a 17.4% margin, which is our sixth consecutive quarter of profitability improvement.

"Overall, our execution has been solid," added Burnison. "The durability and potential of our business were evident once again during the quarter with stability in our Talent Acquisition fee revenues and new business, Digital new business trends improving and steady performance in Consulting. We also continue to invest for the future, as evidenced by the launch of the Korn Ferry Talent Suite, which brings together our assessment, development, talent management, and total rewards solutions, allowing our clients to license our decades of expertise, proprietary insights and data-driven intelligence via a subscription-based model. Additionally, our recent Trilogy International investment expands our interim professional offerings to EMEA, which is a substantial addressable market opportunity."

Selected Financial Results
(dollars in millions, except per share amounts) ^(a)

	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Fee revenue	$	674.4		$	704.0		$	1,349.3		$	1,403.2
Total revenue	$	682.0		$	712.4		$	1,364.7		$	1,418.7
Operating income	$	87.5		$	22.8		$	163.5		$	79.6
Operating margin		13.0	%		3.2	%		12.1	%		5.7	%
Net income (loss) attributable to Korn Ferry	$	60.8		$	(1.7	)	$	123.4		$	44.9
Basic earnings (loss) per share	$	1.16		$	(0.04	)	$	2.34		$	0.86
Diluted earnings (loss) per share	$	1.14		$	(0.04	)	$	2.30		$	0.86

Adjusted Results (b):	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Adjusted EBITDA	$	117.0		$	98.5		$	228.2		$	194.2
Adjusted EBITDA margin		17.4	%		14.0	%		16.9	%		13.8	%
Adjusted net income attributable to Korn Ferry	$	64.7		$	51.0		$	127.8		$	102.5
Adjusted basic earnings per share	$	1.23		$	0.98		$	2.42		$	1.97
Adjusted diluted earnings per share	$	1.21		$	0.97		$	2.38		$	1.96

______________________
(a)		Numbers may not total due to rounding.
(b)		Adjusted EBITDA refers to earnings before interest, taxes, depreciation and amortization, further adjusted to exclude integration/acquisition costs, impairment of fixed assets, impairment of right-of-use assets and restructuring charges, net when applicable. Adjusted results on a consolidated basis are non-GAAP financial measures that adjust for the following, as applicable (see attached reconciliations):

	Second Quarter				Year to Date
	FY'25		FY'24		FY'25		FY'24
Integration/acquisition costs	$	3.9	$	5.0	$	5.0	$	9.2
Restructuring charges, net	$	0.6	$	63.5	$	0.6	$	63.9
Impairment of fixed assets	$	—	$	1.5	$	—	$	1.6
Impairment of right-of-use assets	$	—	$	—	$	—	$	1.6

The Company reported fee revenue in Q2 FY'25 of $674.4 million, a decrease of 4% compared to Q2 FY'24. The decrease in fee revenue was primarily due to lower fee revenues in Professional Search & Interim and Consulting driven by a decline in demand due to the current economic environment, partially offset by an increase in Executive Search fee revenue. The impact of foreign currency was not material in the current quarter.

Operating income was $87.5 million with an operating margin of 13.0%, in Q2 FY'25, compared to $22.8 million with an operating margin of 3.2% in the year-ago quarter, an increase in operating margin of 980bps. Net income attributable to Korn Ferry was $60.8 million in Q2 FY'25, compared to net loss attributable to Korn Ferry of $1.7 million in Q2 FY'24. Adjusted EBITDA was $117.0 million in Q2 FY'25 compared to $98.5 million in Q2 FY'24. Adjusted EBITDA margin was 17.4% in Q2 FY'25, an increase of 340bps compared to the year-ago quarter.

Operating income, operating margin, and net income attributable to Korn Ferry increased as a result of decreases in restructuring charges, net, integration/acquisition costs, disciplined cost management, and lower cost of services expense compared to the year-ago quarter. These decreases in expenses were partially offset by the decrease in fee revenue discussed above.

Adjusted EBITDA and margin increased due to the same factors above excluding restructuring charges, net and integration/acquisition costs.

Results by Line of Business
Selected Consulting Data
(dollars in millions) ^(a)

	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Fee revenue	$	166.8		$	177.8		$	334.6		$	345.9
Total revenue	$	169.4		$	181.0		$	340.2		$	351.7

Ending number of consultants and execution staff (b)		1,646			1,780			1,646			1,780
Hours worked in thousands (c)		398			431			793			858
Average bill rate (d)	$	419		$	413		$	422		$	403

Adjusted Results (e):	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Adjusted EBITDA	$	29.1		$	28.9		$	58.4		$	54.1
Adjusted EBITDA margin		17.5	%		16.3	%		17.5	%		15.6	%

______________________
(a)		Numbers may not total due to rounding.
(b)		Represents number of employees originating, delivering and executing consulting services.
(c)		The number of hours worked by consultant and execution staff during the period.
(d)		The amount of fee revenue divided by the number of hours worked by consultants and execution staff.
(e)		Adjusted results exclude the following:

	Second Quarter				Year to Date
	FY'25		FY'24		FY'25		FY'24
Restructuring charges, net	$	0.4	$	17.6	$	0.4	$	17.8
Impairment of right-of-use assets	$	—	$	—	$	—	$	0.6

Fee revenue was $166.8 million in Q2 FY'25 compared to $177.8 million in Q2 FY'24, a decrease of $11.0 million or 6%, and was essentially flat on a sequential quarter. The year-over-year decrease in Consulting fee revenue was primarily driven by a decline in our organizational strategy and leadership and professional development offerings.

Adjusted EBITDA was $29.1 million in Q2 FY'25 compared to $28.9 million in the year-ago quarter. Adjusted EBITDA margin in the quarter increased year-over-year by 120bps to 17.5%. These increases resulted primarily from higher average bill rates with greater consultant and execution staff productivity and disciplined cost management.

Selected Digital Data
(dollars in millions) ^(a)

	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Fee revenue	$	92.9		$	97.1		$	181.1		$	185.1
Total revenue	$	93.0		$	97.2		$	181.2		$	185.2

Ending number of consultants		260			284			260			284
Subscription & License fee revenue	$	34.6		$	32.4		$	68.7		$	64.9

Adjusted Results (b):	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Adjusted EBITDA	$	29.2		$	29.0		$	55.8		$	53.3
Adjusted EBITDA margin		31.4	%		29.9	%		30.8	%		28.8	%

______________________
(a)		Numbers may not total due to rounding.
(b)		Adjusted results exclude the following:

	Second Quarter				Year to Date
	FY'25		FY'24		FY'25		FY'24
Restructuring charges, net	$	—	$	8.9	$	—	$	8.9
Impairment of fixed assets	$	—	$	1.5	$	—	$	1.5

Fee revenue was $92.9 million in Q2 FY'25 compared to $97.1 million in Q2 FY'24, a decrease of $4.2 million or 4%, up 5% on a sequential quarter basis. The year-over-year decrease in fee revenue was primarily driven by a decrease in demand in our leadership and professional development offerings.

Adjusted EBITDA was $29.2 million in Q2 FY'25 compared to $29.0 million in the year-ago quarter. Adjusted EBITDA margin in the quarter increased year-over-year by 150bps to 31.4%. The increase in Adjusted EBITDA margin was mainly due to improved consultant productivity and disciplined cost management.

Selected Executive Search Data^(a)
(dollars in millions) ^(b)

	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Fee revenue	$	206.0		$	203.0		$	414.6		$	408.2
Total revenue	$	208.0		$	204.8		$	418.3		$	412.4

Ending number of consultants		555			586			555			586
Average number of consultants		557			599			549			594
Engagements billed		3,566			3,488			5,474			5,555
New engagements (c)		1,567			1,531			3,123			3,080

Adjusted Results (d):	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Adjusted EBITDA	$	51.4		$	39.7		$	100.8		$	82.2
Adjusted EBITDA margin		24.9	%		19.6	%		24.3	%		20.1	%

______________________
(a)		Executive Search is the sum of the individual Executive Search Reporting Segments described in our annual and quarterly reporting on Forms 10-K and 10-Q and is presented on a consolidated basis as it is consistent with the Company's discussion of its Lines of Business, and financial metrics used by the Company's investor base.
(b)		Numbers may not total due to rounding.
(c)		Represents new engagements opened in the respective period.
(d)		Executive Search Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures that adjust for the following:

	Second Quarter				Year to Date
	FY'25		FY'24		FY'25		FY'24
Restructuring charges, net	$	0.2	$	25.7	$	0.2	$	25.9
Impairment of right-of-use assets	$	—	$	—	$	—	$	0.9
Impairment of fixed assets	$	—	$	—	$	—	$	0.1

Fee revenue was $206.0 million in Q2 FY'25, an increase of $3.0 million or 1% compared to the year-ago quarter and essentially flat on a sequential quarter. The year-over-year increase in fee revenue was primarily driven by an increase in the number of engagements billed.

Adjusted EBITDA was $51.4 million in Q2 FY'25 compared to $39.7 million in the year-ago quarter. Adjusted EBITDA margin increased by 530bps to 24.9% in Q2 FY'25. The increase in Adjusted EBITDA and Adjusted EBITDA margin was primarily due to higher consultant productivity and disciplined cost management.

Selected Professional Search & Interim Data
(dollars in millions) ^(a)

	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Fee revenue	$	121.1		$	138.4		$	242.8		$	280.6
Total revenue	$	122.0		$	139.5		$	244.7		$	282.5

Permanent Placement:
Fee revenue	$	52.8		$	56.5		$	105.0		$	114.8
Engagements billed		1,740			2,018			2,844			3,455
New engagements (b)		947			1,184			1,919			2,419
Ending number of consultants		292			383			292			383
Interim:
Fee revenue	$	68.3		$	81.9		$	137.8		$	165.8
Average bill rate (c)	$	140		$	126		$	137		$	124
Average weekly billable consultants (d)		980			1,336			1,024			1,387

Adjusted Results (e):	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Adjusted EBITDA	$	27.2		$	25.6		$	52.9		$	50.0
Adjusted EBITDA margin		22.5	%		18.5	%		21.8	%		17.8	%

_____________________
(a)		Numbers may not total due to rounding.
(b)		Represents new engagements opened in the respective period.
(c)		Fee revenue from interim divided by the number of hours worked by consultants.
(d)		The number of billable consultants based on a weekly average in the respective period.
(e)		Adjusted results exclude the following:

	Second Quarter				Year to Date
	FY'25		FY'24		FY'25		FY'24
Integration/acquisition costs	$	1.4	$	4.9	$	2.5	$	8.9
Restructuring charges, net	$	—	$	3.8	$	—	$	3.8

Fee revenue was $121.1 million in Q2 FY'25, a decrease of $17.3 million or 13% compared to the year-ago quarter and essentially flat on a sequential quarter basis. The year-over-year decrease is primarily due to lower demand in the current economic environment.

Adjusted EBITDA was $27.2 million in Q2 FY'25 compared to $25.6 million in the year-ago quarter. Adjusted EBITDA margin increased year-over-year by 400bps to 22.5%. The increase in Adjusted EBITDA and Adjusted EBITDA margin was primarily due to a higher average bill rate in Interim, increased consultant productivity in Permanent Placement and disciplined cost management.

Selected Recruitment Process Outsourcing ("RPO") Data
(dollars in millions) ^(a)

	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Fee revenue	$	87.6		$	87.7		$	176.1		$	183.4
Total revenue	$	89.6		$	90.1		$	180.3		$	186.9

Remaining revenue under contract (b)	$	659.2		$	680.5		$	659.2		$	680.5
RPO new business (c)	$	101.1		$	140.9		$	204.7		$	189.1

Adjusted Results (d):	Second Quarter						Year to Date
	FY'25			FY'24			FY'25			FY'24
Adjusted EBITDA	$	12.9		$	8.9		$	25.4		$	19.3
Adjusted EBITDA margin		14.7	%		10.1	%		14.4	%		10.5	%

______________________
(a)		Numbers may not total due to rounding.
(b)		Estimated fee revenue associated with signed contracts for which revenue has not yet been recognized.
(c)		Estimated total value of a contract at the point of execution of the contract.
(d)		Adjusted results exclude the following:

	Second Quarter				Year to Date
	FY'25		FY'24		FY'25		FY'24
Restructuring charges, net	$	—	$	7.2	$	—	$	7.2
Impairment of right-of-use assets	$	—	$	—	$	—	$	0.1

Fee revenue was $87.6 million in Q2 FY'25, essentially flat compared to the year-ago quarter and sequential quarter.

Adjusted EBITDA was $12.9 million in Q2 FY'25 compared to $8.9 million in the year-ago quarter. Adjusted EBITDA margin increased 460bps to 14.7% in Q2 FY'25. The increase in Adjusted EBITDA and Adjusted EBITDA margin both resulted from greater execution staff productivity and disciplined cost management.

Outlook

Assuming worldwide geopolitical conditions, economic conditions, financial markets and foreign exchange rates remain steady, on a consolidated basis:

Q3 FY'25 fee revenue is expected to be in the range of $635 million and $665 million; and
Q3 FY'25 diluted earnings per share is expected to range between $1.02 to $1.16.

On a consolidated adjusted basis:

Q3 FY'25 adjusted diluted earnings per share is expected to be in the range from $1.06 to $1.18.

	Q3 FY'25 Earnings Per Share Outlook
	Low			High
Consolidated diluted earnings per share	$	1.02		$	1.16
Integration/acquisition costs		0.05			0.03
Tax rate impact		(0.01	)		(0.01	)
Consolidated adjusted diluted earnings per share⁽¹⁾	$	1.06		$	1.18

______________________
(1)		Consolidated adjusted diluted earnings per share is a non-GAAP financial measure that excludes the items listed in the table.

Earnings Conference Call Webcast

The earnings conference call will be held today at 12:00 PM (EST) and hosted by CEO Gary Burnison, CFO Robert Rozek, SVP Business Development & Analytics Gregg Kvochak and VP Investor Relations Tiffany Louder. The conference call will be webcast and available online at ir.kornferry.com. We will also post to the investor relations section of our website earnings slides, which will accompany our webcast, and other important information, and encourage you to review the information that we make available on our website.

About Korn Ferry

Korn Ferry is a global organizational consulting firm. We help clients synchronize strategy and talent to drive superior performance. We work with organizations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people. Visit kornferry.com for more information.

Forward-Looking Statements

Statements in this press release and our conference call that relate to our outlook, projections, goals, strategies, future plans and expectations, including statements relating to expected demand for and relevance of our products and services, expected results of our business diversification strategy, expected benefits of the acquisition of Trilogy, and other statements of future events or conditions are forward-looking statements that involve a number of risks and uncertainties. Words such as "believes", "expects", "anticipates", "goals", "estimates", "guidance", "may", "should", "could", "will" or "likely", and variations of such words and similar expressions are intended to identify such forward-looking statements. Readers are cautioned not to place undue reliance on such statements. Such statements are based on current expectations; actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties that are beyond the control of Korn Ferry. The potential risks and uncertainties include those relating to global and local political and or economic developments in or affecting countries where we have operations, such as inflation, interest rates, global slowdowns, or recessions, competition, geopolitical tensions, shifts in global trade patterns, changes in demand for our services as a result of automation, dependence on and costs of attracting and retaining qualified and experienced consultants, impact of inflationary pressures on our profitability, our ability to maintain relationships with customers and suppliers and retaining key employees, maintaining our brand name and professional reputation, potential legal liability and regulatory developments, portability of client relationships, consolidation of or within the industries we serve, changes and developments in government laws and regulations, evolving investor and customer expectations with regard to environmental, social and governance matters, currency fluctuations in our international operations, risks related to growth, alignment of our cost structure, including as a result of recent workforce, real estate, and other restructuring initiatives, restrictions imposed by off-limits agreements, reliance on information processing systems, cyber security vulnerabilities or events, changes to data security, data privacy, and data protection laws, dependence on third parties for the execution of critical functions, limited protection of our intellectual property ("IP"), our ability to enhance, develop and respond to new technology, including artificial intelligence, our ability to successfully recover from a disaster or other business continuity problems, employment liability risk, an impairment in the carrying value of goodwill and other intangible assets, treaties, or regulations on our business and our Company, deferred tax assets that we may not be able to use, our ability to develop new products and services, changes in our accounting estimates and assumptions, the utilization and billing rates of our consultants, seasonality, the expansion of social media platforms, the ability to effect acquisitions and integrate acquired businesses, resulting organizational changes, our indebtedness, and those relating to the ultimate magnitude and duration of any pandemic or outbreaks. For a detailed description of risks and uncertainties that could cause differences from our expectations, please refer to Korn Ferry's periodic filings with the Securities and Exchange Commission. Korn Ferry disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Measures

This press release contains financial information calculated other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). In particular, it includes:

Adjusted net income attributable to Korn Ferry, adjusted to exclude integration/acquisition costs, impairment of fixed assets, impairment of right-of-use assets and restructuring charges, net of income tax effect;
Adjusted basic and diluted earnings per share, adjusted to exclude integration/acquisition costs, impairment of fixed assets, impairment of right-of-use assets and restructuring charges, net of income tax effect;
Constant currency (calculated using a quarterly average) percentages that represent the percentage change that would have resulted had exchange rates in the prior period been the same as those in effect in the current period; and
Consolidated and Executive Search Adjusted EBITDA, which is earnings before interest, taxes, depreciation and amortization, further adjusted to exclude integration/acquisition costs, impairment of fixed assets, impairment of right-of-use assets and restructuring charges, net when applicable, and Consolidated and Executive Search Adjusted EBITDA margin.

This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial information determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Management believes the presentation of non-GAAP financial measures in this press release provides meaningful supplemental information regarding Korn Ferry's performance by excluding certain charges that may not be indicative of Korn Ferry's ongoing operating results. These non-GAAP financial measures are performance measures and are not indicative of the liquidity of Korn Ferry. These charges, which are described in the footnotes in the attached reconciliations, represent 1) costs we incurred to acquire and integrate a portion of our Professional Search & Interim business, 2) impairment of fixed assets primarily due to software impairment charge in our Digital segment, 3) impairment of right-of-use assets due to the decision to terminate and sublease some of our offices and 4) restructuring charges, net to align workforce to the challenging macroeconomic business environment arising from persistent inflationary pressures, rising interest rates and global economic and geopolitical uncertainty. The use of non-GAAP financial measures facilitates comparisons to Korn Ferry's historical performance. Korn Ferry includes non-GAAP financial measures because management believes they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its evaluation of Korn Ferry's ongoing operations and financial and operational decision-making. Adjusted net income attributable to Korn Ferry, adjusted basic and diluted earnings per share and Consolidated and Executive Search Adjusted EBITDA, exclude certain charges that management does not consider on-going in nature and allows management and investors to make more meaningful period-to-period comparisons of the Company's operating results. Management further believes that Consolidated and Executive Search Adjusted EBITDA is useful to investors because it is frequently used by investors and other interested parties to measure operating performance among companies with different capital structures, effective tax rates and tax attributes and capitalized asset values, all of which can vary substantially from company to company. In the case of constant currency percentages, management believes the presentation of such information provides useful supplemental information regarding Korn Ferry's performance as excluding the impact of exchange rate changes on Korn Ferry's financial performance allows investors to make more meaningful period-to-period comparisons of the Company's operating results, to better identify operating trends that may otherwise be masked or distorted by exchange rate changes and to perform related trend analysis, and provides a higher degree of transparency of information used by management in its evaluation of Korn Ferry's ongoing operations and financial and operational decision-making.

KORN FERRY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

	Three Months Ended October 31,						Six Months Ended October 31,
		2024			2023			2024			2023

	(unaudited)
Fee revenue	$	674,365		$	704,003		$	1,349,311		$	1,403,192
Reimbursed out-of-pocket engagement expenses		7,595			8,444			15,410			15,517
Total revenue		681,960			712,447			1,364,721			1,418,709

Compensation and benefits		437,427			453,859			889,202			933,740
General and administrative expenses		64,541			65,737			124,540			131,654
Reimbursed expenses		7,595			8,444			15,410			15,517
Cost of services		64,657			78,512			132,201			155,702
Depreciation and amortization		19,688			19,554			39,266			38,566
Restructuring charges, net		576			63,525			576			63,946
Total operating expenses		594,484			689,631			1,201,195			1,339,125

Operating income		87,476			22,816			163,526			79,584
Other income (loss), net		5,391			(13,835	)		19,896			(258	)
Interest expense, net		(5,626	)		(6,596	)		(9,571	)		(11,336	)
Income before provision for income taxes		87,241			2,385			173,851			67,990
Income tax provision		24,898			2,341			47,252			20,761
Net income		62,343			44			126,599			47,229
Net income attributable to noncontrolling interest		(1,543	)		(1,755	)		(3,195	)		(2,335	)
Net income (loss) attributable to Korn Ferry	$	60,800		$	(1,711	)	$	123,404		$	44,894

Earnings (loss) per common share attributable to Korn Ferry:
Basic	$	1.16		$	(0.04	)	$	2.34		$	0.86
Diluted	$	1.14		$	(0.04	)	$	2.30		$	0.86

Weighted-average common shares outstanding:
Basic		51,957			51,328			51,953			51,131
Diluted		52,750			51,328			52,864			51,401

Cash dividends declared per share:	$	0.37		$	0.18		$	0.74		$	0.36

KORN FERRY AND SUBSIDIARIES
FINANCIAL SUMMARY BY REPORTING SEGMENT
(dollars in thousands)
(unaudited)

	Three Months Ended October 31,						Six Months Ended October 31,
		2024		2023	% Change			2024		2023	% Change
Fee revenue:
Consulting	$	166,771	$	177,795	(6.2	%)	$	334,641	$	345,883	(3.3	%)
Digital		92,893		97,092	(4.3	%)		181,073		185,078	(2.2	%)
Executive Search:
North America		129,891		132,512	(2.0	%)		264,643		260,010	1.8	%
EMEA		46,788		43,098	8.6	%		92,769		89,874	3.2	%
Asia Pacific		21,464		19,304	11.2	%		42,043		43,843	(4.1	%)
Latin America		7,856		8,079	(2.8	%)		15,179		14,500	4.7	%
Total Executive Search ^(a)		205,999		202,993	1.5	%		414,634		408,227	1.6	%
Professional Search & Interim		121,107		138,384	(12.5	%)		242,848		280,563	(13.4	%)
RPO		87,595		87,739	(0.2	%)		176,115		183,441	(4.0	%)
Total fee revenue		674,365		704,003	(4.2	%)		1,349,311		1,403,192	(3.8	%)
Reimbursed out-of-pocket engagement expenses		7,595		8,444	(10.1	%)		15,410		15,517	(0.7	%)
Total revenue	$	681,960	$	712,447	(4.3	%)	$	1,364,721	$	1,418,709	(3.8	%)

(a)		Total Executive Search is the sum of the individual Executive Search Reporting Segments and is presented on a consolidated basis as it is consistent with the Company's discussion of its Lines of Business, and financial metrics used by the Company's investor base.

KORN FERRY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

	October 31, 2024			April 30, 2024 ⁽¹⁾
	(unaudited)
ASSETS
Cash and cash equivalents	$	694,850		$	941,005
Marketable securities		40,658			42,742
Receivables due from clients, net of allowance for doubtful accounts of $43,862 and $44,192 at October 31, 2024 and April 30, 2024, respectively		579,696			541,014
Income taxes and other receivables		55,033			40,696
Unearned compensation		64,265			59,247
Prepaid expenses and other assets		47,945			49,456
Total current assets		1,482,447			1,674,160

Marketable securities, non-current		231,956			211,681
Property and equipment, net		160,805			161,849
Operating lease right-of-use assets, net		162,441			160,464
Cash surrender value of company-owned life insurance policies, net of loans		236,928			218,977
Deferred income taxes		122,344			133,564
Goodwill		908,662			908,376
Intangible assets, net		76,504			88,833
Unearned compensation, non-current		122,263			99,913
Investments and other assets		22,303			21,052
Total assets	$	3,526,653		$	3,678,869

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	44,051		$	50,112
Income taxes payable		14,652			24,076
Compensation and benefits payable		346,434			525,466
Operating lease liability, current		38,526			36,073
Other accrued liabilities		274,120			298,792
Total current liabilities		717,783			934,519

Deferred compensation and other retirement plans		458,089			440,396
Operating lease liability, non-current		142,415			143,507
Long-term debt		397,336			396,946
Deferred tax liabilities		5,542			4,540
Other liabilities		22,623			21,636
Total liabilities		1,743,788			1,941,544

Stockholders' equity
Common stock: $0.01 par value, 150,000 shares authorized, 78,232 and 77,460 shares issued and 51,748 and 51,983 shares outstanding at October 31, 2024 and April 30, 2024, respectively		368,260			414,885
Retained earnings		1,509,986			1,425,844
Accumulated other comprehensive loss, net		(100,501	)		(107,671	)
Total Korn Ferry stockholders' equity		1,777,745			1,733,058
Noncontrolling interest		5,120			4,267
Total stockholders' equity		1,782,865			1,737,325
Total liabilities and stockholders' equity	$	3,526,653		$	3,678,869

(1)		Information is derived from audited financial statements included in Form 10-K.

KORN FERRY AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(dollars in thousands, except per share amounts)
(unaudited)

	Three Months Ended October 31,						Six Months Ended October 31,
		2024			2023			2024			2023

Net income (loss) attributable to Korn Ferry	$	60,800		$	(1,711	)	$	123,404		$	44,894
Net income attributable to non-controlling interest		1,543			1,755			3,195			2,335
Net income		62,343			44			126,599			47,229
Income tax provision		24,898			2,341			47,252			20,761
Income before provision for income taxes		87,241			2,385			173,851			67,990
Other (income) loss, net		(5,391	)		13,835			(19,896	)		258
Interest expense, net		5,626			6,596			9,571			11,336
Operating income		87,476			22,816			163,526			79,584
Depreciation and amortization		19,688			19,554			39,266			38,566
Other income (loss), net		5,391			(13,835	)		19,896			(258	)
Integration/acquisition costs (1)		3,896			5,030			4,972			9,158
Impairment of fixed assets (2)		—			1,452			—			1,575
Impairment of right-of-use assets (3)		—			—			—			1,629
Restructuring charges, net (4)		576			63,525			576			63,946
Adjusted EBITDA	$	117,027		$	98,542		$	228,236		$	194,200

Operating margin		13.0	%		3.2	%		12.1	%		5.7	%
Depreciation and amortization		2.9	%		2.8	%		2.9	%		2.7	%
Other income (loss), net		0.8	%		(1.9	%)		1.5	%		0.0	%
Integration/acquisition costs (1)		0.6	%		0.7	%		0.4	%		0.7	%
Impairment of fixed assets (2)		—	%		0.2	%		—	%		0.1	%
Impairment of right-of-use assets (3)		—	%		—	%		—	%		0.1	%
Restructuring charges, net (4)		0.1	%		9.0	%		0.0	%		4.5	%
Adjusted EBITDA margin		17.4	%		14.0	%		16.9	%		13.8	%

Net income (loss) attributable to Korn Ferry	$	60,800		$	(1,711	)	$	123,404		$	44,894
Integration/acquisition costs (1)		3,896			5,030			4,972			9,158
Impairment of fixed assets (2)		—			1,452			—			1,575
Impairment of right-of-use assets (3)		—			—			—			1,629
Restructuring charges, net (4)		576			63,525			576			63,946
Tax effect on the adjusted items (5)		(585	)		(17,252	)		(1,145	)		(18,671	)
Adjusted net income attributable to Korn Ferry	$	64,687		$	51,044		$	127,807		$	102,531

Basic earnings (loss) per common share	$	1.16		$	(0.04	)	$	2.34		$	0.86
Integration/acquisition costs (1)		0.07			0.10			0.09			0.18
Impairment of fixed assets (2)		—			0.03			—			0.03
Impairment of right-of-use assets (3)		—			—			—			0.03
Restructuring charges, net (4)		0.01			1.24			0.01			1.24
Tax effect on the adjusted items (5)		(0.01	)		(0.35	)		(0.02	)		(0.37	)
Adjusted basic earnings per share	$	1.23		$	0.98		$	2.42		$	1.97

Diluted earnings (loss) per common share	$	1.14		$	(0.04	)	$	2.30		$	0.86
Integration/acquisition costs (1)		0.07			0.10			0.09			0.18
Impairment of fixed assets (2)		—			0.03			—			0.03
Impairment of right-of-use assets (3)		—			—			—			0.03
Restructuring charges, net (4)		0.01			1.23			0.01			1.23
Tax effect on the adjusted items (5)		(0.01	)		(0.35	)		(0.02	)		(0.37	)
Adjusted diluted earnings per share	$	1.21		$	0.97		$	2.38		$	1.96

Explanation of Non-GAAP Adjustments
(1)		Costs associated with current and previous acquisitions, such as legal and professional fees, retention awards and the on-going integration expenses.
(2)		Costs associated with impairment of fixed assets primarily due to software impairment charge in our Digital segment.
(3)		Costs associated with impairment of right-of-use assets due to terminating and deciding to sublease some of our offices.
(4)		Restructuring charges incurred to align our workforce to eliminate excess capacity resulting from challenging macroeconomic business environment.
(5)		Tax effect on integration/acquisition costs, impairment of fixed assets and right-of-use assets, and restructuring charges, net.

KORN FERRY AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - CONTINUED
(unaudited)

	Three Months Ended October 31,
	2024									2023
	Fee revenue		Total revenue		Adjusted EBITDA			Adjusted EBITDA margin		Fee revenue		Total revenue		Adjusted EBITDA			Adjusted EBITDA margin

	(dollars in thousands)
Consulting	$	166,771	$	169,384	$	29,106		17.5	%	$	177,795	$	180,953	$	28,928		16.3	%
Digital		92,893		93,038		29,188		31.4	%		97,092		97,157		28,983		29.9	%
Executive Search:
North America		129,891		131,419		36,907		28.4	%		132,512		133,933		29,436		22.2	%
EMEA		46,788		47,132		7,487		16.0	%		43,098		43,315		5,619		13.0	%
Asia Pacific		21,464		21,540		4,432		20.6	%		19,304		19,460		3,875		20.1	%
Latin America		7,856		7,859		2,552		32.5	%		8,079		8,085		805		10.0	%
Total Executive Search		205,999		207,950		51,378		24.9	%		202,993		204,793		39,735		19.6	%
Professional Search & Interim		121,107		121,988		27,203		22.5	%		138,384		139,455		25,622		18.5	%
RPO		87,595		89,600		12,899		14.7	%		87,739		90,089		8,855		10.1	%
Corporate		—		—		(32,747	)				—		—		(33,581	)
Consolidated	$	674,365	$	681,960	$	117,027		17.4	%	$	704,003	$	712,447	$	98,542		14.0	%

	Six Months Ended October 31,
	2024									2023
	Fee revenue		Total revenue		Adjusted EBITDA			Adjusted EBITDA margin		Fee revenue		Total revenue		Adjusted EBITDA			Adjusted EBITDA margin

	(dollars in thousands)
Consulting	$	334,641	$	340,151	$	58,400		17.5	%	$	345,883	$	351,746	$	54,108		15.6	%
Digital		181,073		181,249		55,811		30.8	%		185,078		185,169		53,308		28.8	%
Executive Search:
North America		264,643		267,506		72,005		27.2	%		260,010		263,346		58,192		22.4	%
EMEA		92,769		93,408		14,752		15.9	%		89,874		90,450		11,257		12.5	%
Asia Pacific		42,043		42,244		8,650		20.6	%		43,843		44,070		10,190		23.2	%
Latin America		15,179		15,185		5,350		35.2	%		14,500		14,507		2,546		17.6	%
Total Executive Search		414,634		418,343		100,757		24.3	%		408,227		412,373		82,185		20.1	%
Professional Search & Interim		242,848		244,718		52,909		21.8	%		280,563		282,524		49,951		17.8	%
RPO		176,115		180,260		25,393		14.4	%		183,441		186,897		19,326		10.5	%
Corporate		—		—		(65,034	)				—		—		(64,678	)
Consolidated	$	1,349,311	$	1,364,721	$	228,236		16.9	%	$	1,403,192	$	1,418,709	$	194,200		13.8	%

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Korn Ferry Announces Second Quarter Fiscal 2025 Results of Operations