Korn Ferry (KFY) investor relations material

Strategic transformation and portfolio expansion

• Shifted from a transactional, cyclical business to a diversified, resilient portfolio with $3.5 billion backlog, driven by long-term client relationships and expanded solutions beyond executive search.

• AMS acquisition adds $1.5 billion backlog, nearly doubles employee count, and expands presence to 120 countries, enhancing end-to-end talent solutions and complementary offerings in financial services and contingent workforce.

• Integration priorities include migrating AMS onto core systems by May 1 next year and leveraging AMS’s global capability centers for operational efficiency.

• Cross-referral rates between business solutions have increased from 25% to nearly 29.5%, with a target of at least 35% as integration deepens.

• AMS’s contingent workforce solutions and early career/campus recruiting are seen as major incremental revenue opportunities, especially as these services are introduced to new geographies.

Financial outlook, synergies, and margin dynamics

• AMS’s EBITDA is targeted to grow from $100 million to $140 million within a year, driven primarily by cost synergies, with revenue synergies expected to follow as integration matures.

• EPS is expected to be dilutive in the first quarter post-acquisition but accretive by the end of the first year, with $0.52–$0.53 per share value creation projected from synergies alone.

• EBITDA margins are targeted at 16–18% medium to long term, with potential to exceed this range through successful integration and digital business growth.

• Interim business margins have improved to 15% through operational synergies, and further acquisitions in this area could impact overall margin mix.

• Balance sheet leverage stands at 1.7x post-AMS deal, with near-term focus on debt paydown before resuming M&A, likely through smaller tuck-in deals in Interim and leadership development.

Market trends, regional performance, and innovation

• Six consecutive quarters of positive fee revenue growth, led by talent acquisition businesses, with strong hiring confidence and increased executive search activity due to demographic shifts.

• Americas region remains robust, EMEA shows moderate growth, and APAC is most impacted by Middle East conflict, affecting pipeline stability.

• Consulting and digital businesses are now integrated, growing similarly, and leveraging foundational assets like data and behavioral science for differentiated offerings.

• New Talent Suite platform unifies firm-wide assets, enabling advanced talent intelligence and supporting all business lines, with ongoing repositioning in the market.

• Marquee and Diamond accounts now represent 40% of consolidated fee revenue, growing 300–400 basis points faster than the overall business, with AMS clients expected to further accelerate this segment.