Korn Ferry (KFY) Q1 FY2027 Earnings Call: Revenue Rises 7%, AMS Expands Backlog
Source Tradingkey
Key Takeaways
- Korn Ferry’s Q1 FY2027 fee revenue increased 7% year over year to $756 million, marking a sixth consecutive quarter of growth.
- Adjusted EBITDA rose 7% to $128 million, while the adjusted EBITDA margin remained unchanged at 17%. Adjusted diluted EPS increased 9% to $1.43.
- New business grew 12%, and estimated remaining fees under existing contracts increased 14% to $1.92 billion. Management said the combined backlog reached approximately $3.5 billion following the AMS transaction.
- Fee revenue grew across all regions: the Americas increased 9% to $442 million, EMEA rose 4% to $228 million and APAC returned to growth with a 1% increase to $87 million.
- Korn Ferry completed its combination with AMS. Management expects AMS to reach $140 million in run-rate EBITDA within one year of closing, including $40 million of incremental EBITDA, and said it expects to achieve the target sooner.
- Q2 FY2027 guidance calls for fee revenue of $860 million to $878 million, an adjusted EBITDA margin of 16.8% to 17.2%, and adjusted diluted EPS of $1.30 to $1.40.
Core Financial Data
| Metric | Q1 FY2027 result | Year-over-year change / comment |
|---|---|---|
| Fee revenue | $756 million | Up 7%; sixth consecutive quarter of growth |
| Adjusted EBITDA | $128 million | Up $8 million, or 7% |
| Adjusted EBITDA margin | 17% | Flat |
| Adjusted diluted EPS | $1.43 | Up $0.12, or 9% |
| Consolidated new business | — | Up 12% |
| Estimated remaining fees under existing contracts | $1.92 billion | Up 14% |
| Internal business referral rate | 29.4% of fee revenue | Up approximately 300 basis points |
| Marquee and Diamond accounts | About 40% of fee revenue | Stable |
| Dividends paid | $30 million | Q1 capital allocation |
| Capital expenditures | $15 million | Q1 investment |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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