Korn/Ferry International (NYSE:KFY) reported fiscal third-quarter 2026 results that management said reflected continued progress in reshaping the firm’s operating model and expanding client relationships across its five solutions. On the call, CEO Gary Burnison framed the quarter’s performance against a backdrop of demographic-driven labor constraints and accelerating adoption of AI, while CFO Bob Rozek highlighted broad-based fee revenue growth, rising profitability, and strong new business momentum.
Third-quarter results: fee revenue up 7%, adjusted EPS up 8%
Rozek said consolidated fee revenue rose 7% year over year to $717 million, marking the company’s fifth consecutive quarter of accelerating year-over-year fee revenue growth. Profitability increased alongside revenue: adjusted EBITDA grew $9 million, or 7.5%, to $123 million, and the adjusted EBITDA margin was 17.2%, up 10 basis points. Adjusted diluted EPS increased $0.09, or 8%, to $1.28.
Client strategy: “We Are Korn Ferry” and cross-solution selling
Burnison emphasized what he called the firm’s evolution “from One Korn Ferry to We Are Korn Ferry,” describing it as a unified operating approach across “one business with five solutions” and about 9,000 colleagues. He said the strategy is focused on deepening existing relationships through a systematic top-down and bottom-up go-to-market effort.
Burnison noted that the firm has more than 10,000 clients globally, but about 4,500 clients represent 90% of revenue. He said that within that group, the company’s penetration is typically just “one and a half or two solutions per client” for roughly two-thirds of those clients—an indicator, in his view, of remaining runway to expand engagements.
Rozek pointed to the impact of cross-business activity. Cross-business referrals represented 27.2% of consolidated fee revenue, up 200 basis points year over year, and the firm’s Marquee and Diamond account efforts contributed 40% of total fee revenue. Burnison added that market accounts outperformed the overall portfolio, up 9% and contributing 40% of total revenue.
Talent Suite and AI: early rollout, intended to deepen relationships
A recurring topic on the call was AI and Korn Ferry’s Talent Suite. Burnison argued that the greater risk for workers is not AI eliminating jobs, but workers and organizations failing to adopt technology, particularly as demographic trends shrink the labor pool. He said Korn Ferry is focused on the high end of the labor force and does not expect “high-end labor talent” to be disintermediated, adding that AI should create opportunities for Korn Ferry both through efficiency and new client solutions.
In Q&A, Burnison said Talent Suite is more likely to have its biggest impact by deepening existing relationships rather than primarily adding new customers. He described Talent Suite as “Moneyball for business,” intended to embed a “language of talent” across how clients hire, design organizations, retain and pay employees, and develop leaders. He also said Korn Ferry has “about 6,000 clients on Talent Suite,” and that about 70% use only one product within it, which he characterized as an opportunity to expand adoption.
On whether Talent Suite contributed to the quarter’s strength in consulting and digital, Burnison said it had “a little impact, but not much,” noting the company conducted a soft launch in November and a “harder launch” in January, and that client conversions were seamless. The next step, he said, is enabling roughly 2,000 front-line colleagues to communicate Talent Suite’s data and use cases with clients.
Regional and solution highlights; consulting engagement mix
Rozek said fee revenue growth was broad-based across solutions. He highlighted interim revenue growth of 4%, which he attributed in part to referrals and the firm’s go-to-market initiatives in an industry environment he said has been challenged for more than 36 months.
On the digital side, Rozek said subscription and licensed new business grew 30% year over year and represented 43% of digital new business, while subscription and license fee revenue increased 8%. He also said average hourly bill rates increased 2% in consulting and 15% in interim.
By geography, fee revenue in the Americas rose 6%, led by executive search and RPO. EMEA grew 13%, with double-digit growth in executive search, consulting, digital and PS&I. APAC declined 2%, as executive search growth was offset by weakness in other solutions.
During Q&A, Rozek provided additional detail on consulting new business, noting that the company saw an all-time high in new business in October and exceeded that in December—typically a slower month. He said 44% of consulting new business in the quarter came from engagements over $500,000. Burnison said large consulting engagements were commonly tied to transformation and organization strategy work, and both executives referenced client interest in “AI-ready” leaders and talent, supported by assessment and succession work.
Asked about consulting margins, Rozek said margins were pressured because fee revenue came in above guidance and resulted in higher bonus expense, which reduced margins in the quarter.
Cash deployment, dividend increase, and fourth-quarter outlook
Rozek said capital allocation remained balanced, with $113 million returned to shareholders through share repurchases and dividends through the end of the third quarter, and $64 million invested in capital expenditures focused on Talent Suite, productivity tools, and solution and product enhancements. He also noted the board approved a 15% increase in the quarterly dividend to $0.55 per share, which he said was the seventh increase in the last six years.
On investment levels, Rozek said the company’s CapEx run rate has been about $80 million to $85 million, with expectations that it could move back toward a more historical $60 million to $65 million run rate as the company heads into fiscal 2027. Burnison and Rozek both suggested the firm could lean more heavily toward buybacks depending on market conditions.
For the fiscal fourth quarter of 2026, management guided to:
- Fee revenue of $730 million to $750 million
- Adjusted EBITDA margin of 17.1% to 17.3%
- Adjusted diluted EPS (and GAAP diluted EPS) of $1.34 to $1.40
The outlook assumes no material negative impact from the recent Middle East conflict and no further changes in global geopolitical conditions, economic conditions, financial markets, or foreign exchange rates. Burnison said the company had not factored the last 10 days of developments into guidance and that it was too early to assess broader implications.
Closing the call, Burnison reiterated confidence in the firm’s “direction of travel,” and highlighted Korn Ferry’s role as a founding partner of the LA28 Olympic & Paralympic Games, including work on leadership hiring and organizational design.
About Korn/Ferry International (NYSE:KFY)
Korn Ferry International is a global organizational consulting firm that partners with clients to design optimal structures, roles and responsibilities. The company’s core offerings include executive search, talent acquisition, leadership development and succession planning. By blending deep industry expertise with data-driven insights, Korn Ferry helps organizations identify, assess and develop executives and high-potential talent for critical roles.
Since its founding in 1969 and with headquarters in Los Angeles, Korn Ferry has expanded its presence to more than 50 offices across North America, Europe, Asia Pacific and Latin America.
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