Korn Ferry Q1 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Trevor Romeo - William Blair - Analyst : Hi, thanks so much for taking the questions. Just maybe I had a couple on your digital business to start, the Talent Suite rollout coming up in November. As you're getting ready for that commercial launch, I guess, what are some of the key milestones you'll be tracking there? And how should we be thinking about maybe the time line for the benefits there to start flowing through the financials?

Question: Trevor Romeo - William Blair - Analyst : Thanks, Gary. Maybe just one quick follow-up on digital. The subscription and license piece of the segment going above, I think, 40% of segment revenue now. Could you maybe just remind us what is your kind of long-term aspirational target for how big those subscriptions could grow as a percentage of that segment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2025 / 4:00PM, KFY.N - Q1 2026 Korn Ferry Earnings Call

Question: Trevor Romeo - William Blair - Analyst : Great, thank you. And then maybe one more, if you don't mind. Maybe for you, Bob. Just on the guidance, I think typically, Q2 is a little bit of a stronger seasonal revenue quarter for you. So I guess the guidance may be a slight dip at the midpoint sequentially for revenue. Can we just maybe reconcile that. Should we read that as a little bit of conservatism or any reasons across the businesses that would make you think you wouldn't see a little bit of an uptick?

Question: Trevor Romeo - William Blair - Analyst : Okay. Understood. Well, thanks very much. I really appreciate it.

Question: Tobey Sommer - Truist - Analyst : Thank you. I wanted to ask what you're hearing from clients. You mentioned in your -- that uncertainty out in the economy prompted some conservatism in guidance, we see the BLS revision lower here this morning for job creation over the last year, maybe rates starting to come down here at the Fed sometime soon. What are customers telling you? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 09, 2025 / 4:00PM, KFY.N - Q1 2026 Korn Ferry Earnings Call

Question: Tobey Sommer - Truist - Analyst : Just sort of a specific question on consulting if I could. With respect to your merger and divestiture kind of services in playbook. What are you seeing there? Because we've seen sort of an uptick in at least announced deals. And many of them seem to be sort of corporate breakups, I'm wondering if you're participating in that from a consulting perspective?

Question: Tobey Sommer - Truist - Analyst : Appreciate that. Last question for me is if we do see an appreciable uptick in demand or across the businesses and get a little bit faster revenue growth for the firm. Do you have some excess capacity now sort of in the businesses to be able to meet that? Or might you need to step on the gas with hiring and have sort of flat to down-ish margins for a quarter or two while you ramp things up?

Question: Tobey Sommer - Truist - Analyst : Thank you very much.

Question: Joshua Chan - UBS - Analyst : Hi Gary and Bob, thanks for taking my questions. If I look at the -- if I look at the geography, the North American part of the business, most parts of the business is down somewhat, which jives with the macro, but exec search is still up in North America. So what's going on in exec search that's allowing that part of your business to really seemingly outperform the environment?

Question: Joshua Chan - UBS - Analyst : Great. Well, thanks for the color there, Gary. And I think you guys also mentioned that in a choppy environment that could provide some opportunity for you to strengthen your position. I'm sure you'd love a stronger environment, but curious how you can still win business in a weaker environment and what kind of opportunities those might be?

Question: Joshua Chan - UBS - Analyst : That's an interesting perspective. Yeah, thank you for both for your color -- the color and the time.

Question: Mark Marcon - Robert W. Baird & Co Inc - Analyst : Hey, good afternoon, and thanks for taking my questions. Gary in your discussion, you talked a lot about some of the bigger deals that you've been signing and you specifically noted one with a big HCM company. I'm wondering if you can elaborate in terms of what you're going to do for them?

Question: Mark Marcon - Robert W. Baird & Co Inc - Analyst : That's really interesting. How big of a program could something like that be?

Question: Mark Marcon - Robert W. Baird & Co Inc - Analyst : That's great. Gary, we have been in a labor recession. You guys have held up the best of arguably any of the major players that are out there that most investors look at. You've been getting more and more into professional search and interim. You've made a number of acquisitions there. I'm wondering as the environment remains relatively uncertain, what's your posture there? What have you learned from the acquisitions that you've made in terms of, what are the types of acquisitions, the best spaces where you guys actually fit? And how many more opportunities are there in terms of bolstering the areas where you really do fit?

Question: Mark Marcon - Robert W. Baird & Co Inc - Analyst : Appreciate that answer.

Question: Mark Marcon - Robert W. Baird & Co Inc - Analyst : That's terrific. Thanks, Bob. And then can I just ask about AI, twofold question. One is, clearly, there's been a labor recession for anybody who's been following the labor market for some time. And the question revolves around like even if we do see some (inaudible) a little bit more actively. Gary, what do you think about the chance of uncertainty around AI kind of freezing certain employers. And in some cases, we are seeing some sections where labor demand is being reduced by AI. So I'm just wondering what you're seeing on the client front. And then secondly, you mentioned you're injecting [AI] processes. Wondering if you can be a little bit more specific in terms of specific areas that you're injecting to AI? How much are you spending there? And do you expect it to be an efficiency driver? And what's that impact going to be in terms of your own headcount?

Question: Mark Marcon - Robert W. Baird & Co Inc - Analyst : Thank you very much. That was terrific.