Korn Ferry Delivers Strong Q3 FY2026 Results: Revenue Growth Across All Solutions

Key Financial Highlights

• Q3 FY2026 fee revenue: \$717.4 million, up 7% year-over-year (4% in constant currency), with growth in every solution line.
• Net income attributable to Korn Ferry: \$65.3 million, up 12% year-over-year; margin improved to 9.1% from 8.7%.
• Adjusted EBITDA: \$123.1 million, up 8% year-over-year; margin steady at 17.2%.
• Diluted EPS: \$1.23 (up 12% YoY); Adjusted diluted EPS: \$1.28 (up 8% YoY).
• Estimated remaining fees under existing contracts: \$1.85 billion, up 11% YoY, led by Digital (+16%), Consulting (+12%), and RPO (+10%).
• Year-to-date (9M FY26) revenue: \$2.15 billion, up from \$2.02 billion YoY (+6%).

CEO Commentary

Gary D. Burnison, CEO, emphasized the evolving nature of Korn Ferry as it responds to unprecedented global changes in demographics and technology. He highlighted the firm’s ability to synchronize its expertise and solutions to address clients’ toughest challenges. Burnison also underscored Korn Ferry’s role as a Founding Partner of the LA28 Olympic and Paralympic Games, positioning the brand with a major international event.

Segment Performance Detail

Consulting

• Fee revenue: \$166.9 million (+5% YoY; +2% constant currency).
• Adjusted EBITDA: \$28.4 million (flat YoY); margin 17.0% (down from 17.7%).
• Growth drivers: 2% increase in average bill rates despite a decrease in consultant headcount.
• Estimated remaining fees: \$407.3 million (+12% YoY).

Digital

• Fee revenue: \$94.0 million (+4% YoY; flat in constant currency).
• Adjusted EBITDA: \$29.1 million (+2.5% YoY); margin 31.0% (slight decrease YoY).
• Growth driver: 8% increase in Subscription & License fee revenue.
• Estimated remaining fees: \$428.0 million (+16% YoY).

Executive Search

• Fee revenue: \$231.9 million (+13% YoY; +11% constant currency).
• Adjusted EBITDA: \$58.2 million (+14% YoY); margin 25.1% (flat YoY).
• Growth drivers: More engagements billed and higher average fee per engagement; strong performance in all regions.
• Estimated remaining fees: \$68.6 million (+17% YoY).

Professional Search & Interim

• Fee revenue: \$137.0 million (+5% YoY; +3% constant currency).
• Adjusted EBITDA: \$29.1 million (+7% YoY); margin 21.2% (flat YoY).
• Growth drivers: Increases in both Permanent Placement and Interim, with a 16% rise in average bill rates for Interim.
• Estimated remaining fees: \$122 million (Permanent + Interim combined; slight decrease for Interim).

Recruitment Process Outsourcing (RPO)

• Fee revenue: \$87.5 million (+3% YoY; +1% constant currency).
• Adjusted EBITDA: \$13.6 million (+7% YoY); margin 15.6% (up 60bps YoY).
• Growth driver: New logo clients in North America.
• Estimated remaining fees: \$825.0 million (+10% YoY).

Balance Sheet Position

• Cash and cash equivalents: \$938.4 million (as of Jan 31, 2026).
• Total assets: \$3.95 billion.
• Total liabilities: \$1.94 billion.
• Stockholders’ equity: \$2.01 billion.
• Goodwill: \$952 million, indicating sustained investment in acquired businesses.

Guidance for Q4 FY2026

• Fee revenue expectation: \$730 million to \$750 million.
• Diluted EPS guidance: \$1.34 to \$1.40.
• Assumes no material negative impact from Middle East conflict, and that global economic and market conditions remain stable.

Noteworthy and Potentially Price-Sensitive Items

• Robust contract backlog: Estimated remaining fees under contract up 11% YoY, reflecting strong future revenue visibility and backlog growth in all major business lines.
• Strategic partnership: Korn Ferry’s role as a Founding Partner for the LA28 Olympic and Paralympic Games could significantly enhance brand visibility and create new business opportunities.
• Consistent profitability: Margins are holding up despite increased compensation and benefits expenses, showing operational resilience.
• Cost controls & restructuring: Some one-time costs (integration, restructuring, impairment, lease modifications) have been incurred, but their exclusion in adjusted results demonstrates underlying operating strength.
• Accelerated depreciation: Company is sunsetting its Digital platform, accounting for \$13.8 million in accelerated depreciation YTD—shareholders should note this is non-recurring.
• Balance sheet strength: High cash reserves and strong equity base provide flexibility for further investments or shareholder returns.

Risks & Forward-Looking Statements

• Korn Ferry highlights multiple macro risks that could affect future results, including geopolitical instability, inflation, labor market conditions, competition, and global economic slowdowns.
• Company continues to invest in technology (including AI) and may face risks related to technology adoption, cybersecurity, and regulatory changes.
• Any material negative shift in the global environment, particularly from the Middle East conflict or macroeconomic disruptions, could impact guidance and share value.

Non-GAAP Measures

Korn Ferry presents several non-GAAP financial measures (adjusted net income, adjusted EPS, adjusted EBITDA, constant currency data) to provide investors with a clearer picture of ongoing operations by excluding one-off items such as acquisition costs, restructuring, impairments, and lease incentives. These measures are widely used for peer comparison but should be interpreted alongside GAAP numbers.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. The information is based on Korn Ferry’s official Q3 FY2026 press release and should be considered in conjunction with the company’s filings with the U.S. Securities and Exchange Commission. Investors should be aware of the risks and uncertainties described herein and are encouraged to conduct their own due diligence before making investment decisions.

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