Korn Ferry Goldman Sachs Communacopia + Technology Conference 2026
Review the key takeaways and the transcript of this earnings call.
- Korn Ferry has expanded beyond executive search into consulting, digital, and workforce solutions, recently acquiring AMS, which significantly increases their backlog to nearly $3.5 billion combined.
- The company shifted to a regional operating model (Americas, EMEA, APAC) to improve client-centricity and cross-solution collaboration, increasing business referrals from 25% to nearly 30% in Q1, with a target of 35%.
- AMS adds contingent workforce solutions, early career recruiting, and tech consulting, doubling Korn Ferry's employee count to about 17,000 and expanding geographic presence to 120 countries.
- AMS standalone growth is similar to Korn Ferry's historical 6-7% growth, with plans to increase AMS EBITDA from $100 million to $140 million within a year primarily through cost synergies.
- The AMS acquisition is expected to be EPS dilutive in the near term but accretive by the end of the first year, with estimated net income contribution of about $29 million after amortization and taxes.
- Korn Ferry delivered six consecutive quarters of positive fee revenue growth, driven largely by talent acquisition businesses including executive search, pro search, RPO, and interim, with increased hiring confidence.
- The company has moved upmarket in search assignments, benefiting from higher average fees due to senior-level placements and CFO churn, with a positive outlook on volume and pricing.
- Regional performance varies: Americas is stable, EMEA grew about 4-5% in Q1, and APAC is stable but impacted by Middle East conflicts affecting supply chains.
- Talent and organizational solutions growth is constrained by longer sales cycles and macroeconomic uncertainty; digital and consulting segments are growing similarly and are being integrated.
- The new Talent Suite platform supports the entire firm by consolidating assessments, pay data, and development content, enabling talent intelligence rather than just digital solutions.
- RPO volumes are recovering with differentiated offerings that integrate Korn Ferry’s assessments and pay data, improving recruiting efficiency.
- Marquis and Diamond accounts represent about 40% of fee revenue and grow 300-400 basis points faster than the overall company.
- Korn Ferry reported 17% EBITDA margins in fiscal Q1, targeting 16-18% medium to long term, with potential upside from AMS margin improvements and digital segment expansion.
- Interim search margins have improved from 6-7% to around 15% through synergies and integration; further interim acquisitions could pressure margins due to mix changes.
- Post-AMS acquisition, Korn Ferry’s gross leverage is about 1.7x with over $1 billion debt; management plans to focus on debt paydown before considering share buybacks or M&A.
- Large transformative acquisitions are unlikely in the next year as the company integrates AMS; smaller acquisitions in interim and leadership development are potential targets.
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Transcript
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Thank you for the invite.
Of course. Let's start at a high level with Korn Ferry's strategy.
The company has expanded well beyond executive search over the past couple of years, pushing into consulting, digital workforce solutions, recently acquired AMS, which I know we will talk more about. Can you discuss how this broader portfolio has changed Korn Ferry's growth profile and overall cyclicality?
Yeah. Part of the initial strategy in terms of expanding our solution set with our clients was really all about moving away from highly cyclical, highly transactional, monoline business into something that has more revenue durability, resilience, and so on. If you think about our executive search business, George, it converts from signing to closure within 3 months.
You constantly have to go out and sell the next search, whereas now, we have long-term relationships. At the end of the first quarter, we were about $1.9 billion in backlog. So that's work that we've sold but have yet to deliver.
Very different. Then with AMS coming on board, they have very large client relationships, and their backlog is about $1.5 billion. If you think about us at $1.9 billion, we're a $3 billion company. They're at $1.5 billion, and they're about a $650 million company. That shows you the size and scale of their client engagements. Today, we're going to have almost a $3.5 billion backlog.
Very different profile for our organization. Not to mention, when you look at the assets that we have and the services and solutions we provide, we basically fulfill every talent need that a client has. Not just finding a body when somebody leaves or they get terminated, but providing end-to-end talent solutions for clients.
Mm-hmm. Recently, the company has shifted to more of a regional operating model, carving the business up into the Americas, EMEA, and APAC, as the primary integrators of solutions across the company. What changes operationally under this new model, and how do you think it's going to improve execution and growth?
Yeah. So really what changes, this is all about becoming much more client-centric. In order to do so, you have to meet clients where they are, which is on a local basis. What we found over time is, Gary and I would manage the business, we were really focused on solutions. So I would go to Mathias, say, "Hey, what's going on in digital?" Or Leszek, "What's going on in consulting?" We were creating divisiveness within the business, so everybody became siloed. As we stepped back and we said, "Okay, that worked for us to a point, but it's not going to help us get to the next level. We have to bring our organization together before we split it up." The whole concept behind the regions was to do that and really focus on clients.
What we have done operationally now, Gary drives all of our go-to-market activities, and we get on a call every other Monday. We look at all the new business we have won. We look at all of our Marquee and Diamond accounts, all our must-win opportunities, and he has got his whole leadership team doing that. No longer are we going, again, to the individual solutions and seeing what they are doing. It is what we are doing collectively as a team. On the operating side, that is where my responsibilities come in, and I still look at the business regionally and by solution groupings, because as I think about resource decisions and so on, it would be really hard to do it just at the regional level. So we have kind of broken it up, and that is the operating model that we have got in place that we are following now.
On the go-to-market side, if I go back to May 1 of last year, what we measure is what we call our business referrals. When one solution refers something to another solution, it was about 25%. We were stuck there for about four quarters.
As we started with this new operating model, we saw that start to ramp up, and we just finished Q1 at almost 29.5%.
Right. We are seeing real kind of cause and effect, if you will.
On that topic of cross-referrals, where do you think that 30% can go to over time?
I would be surprised if we do not get it up to at least 35% at some point in time.
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