Korn Ferry (KFY) Q1 2027 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Korn Ferry First Quarter of Fiscal Year 27 Conference Call. At this time, all participants are in a listen-only mode. Following the prepared remarks, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded for replay purposes. We have also made available in the Investor Relations section of our website at kornferry.com, a copy of the financial presentation that we will be reviewing with you today.

Before I turn the call over to your host, Mr. Gary D. Burnison, let me first read a cautionary statement to investors. Certain statements made in the call today, such as those relating to future performance, plans and goals, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 2000. Although the company believes the expectations reflected in such forward looking statements are based on reasonable assumptions. Investors are cautioned not to place undue reliance on such statements. Actual results in future periods may differ materially from those currently expected or desired because of a number of risks and uncertainties which are beyond the company's control. Additional information concerning such risks and uncertainties can be found in the release relating to this presentation and in the periodic and other reports filed by the company with the SEC. Including the company's annual report for fiscal year 26 and in the company's soon to be filed quarterly report for the quarter ended 07/31/2026. Also, some of the comments today may reference non GAAP financial measures such as constant currency amounts, EBITDA and adjusted EBITDA. Additional information concerning these measures, including reconciliations to the most directly comparable GAAP financial measures, is contained in the financial presentation and earnings release relating to this call, both of which are posted in the Investor Relations section of the company's website at www.kornferry.com.

With that, I will turn the call over to Mr. Burnison. Please go ahead, Burnison.

Thanks, Regina, and thank you, everybody, for joining us. I am going to have the team walk through the numbers. But first, I will just comment that our performance was absolutely outstanding. All regions are up and it marks our 6th consecutive quarter of top line growth. Which underscores the strength of our strategy. And we remain focused on executing with discipline. Investing in opportunities that will drive sustainable impact and create lasting value for our shareholders. All of which reflects the confidence we have in our strategic direction and long term outlook. As I reflected during our previous quarterly call, I used to talk about opportunities measured in the hundreds of millions of dollars. Today, I think in terms of opportunities measured in the billions, And last week, we took another significant step in that direction with the completion of our combination with AMS. This brings together 2 iconic brands and creates a global leader in talent and organizational consulting. AMS is a world class firm that propels our we are Korn Ferry strategy. To be the world's conductor of talent and organizational orchestration. We now offer 1 of the most comprehensive organizational talent solution portfolios in the world. The combined firm has nearly 17 thousand colleagues, in more than 130 offices. Complimentary strengths and more expansive industry coverage. All united in a shared commitment to accelerate our clients success. Together with AMS, we have profound operational capability delivering technology enabled talent solutions at scale supported by long term contracted client relationships. We have deepened our client centric approach as we expand the breadth of our solutions with every relationship. And here, just a couple examples. At a global energy company, we are supporting their strategic and talent transformation. Impacting 60 thousand roles. Across 200 business units. So we are a global consumer products company with more than 100 thousand employees. Turned to us for worldwide delivery of org design analytics, and workforce planning. And at the heart of how we serve our largest clients is talent suite. Powering our work, and enabling better people decisions at scale. In fact, more than 90% of our Marquee and Diamond accounts have an active TalentSuite subscription today. I could not be more excited about the evolution and the trajectory of our firm Today's Korn Ferry has a unique ability to serve our clients across the entire talent spectrum. Search is about identifying talent. Workforce solutions is scaling that talent. And talent in organizational solutions is unlocking their potential. there is no question that technology will continue to play a significant role in the future. Bridging the imbalance of supply and demand of labor. But it is not technology alone. People are the catalyst for organizational success. Human beings, not human doings. it is a belief that defines who we are and that is why Korn Ferry is in the people business. With that, Bob, I will turn it over to you.

Thanks, Gary, and good afternoon or good morning, everyone. Our financial performance continues to steadily improve and outpace the broader industry. In the first quarter of FY 27, our fee revenue grew for the 6th consecutive quarter with strong earnings growth and steady profitability. Our improving performance in this ever changing business environment really continues to underscore both the effectiveness of our strategy the hard work and talent of our colleagues, and our operational excellence. Before reviewing the quarter in detail, and as we announced on our fourth quarter earnings call for fiscal year 26, we are now reporting our financial results of the company in 3 geographic segments. The Americas, EMEA, and APAC. This new reporting structure aligns with our We Are Korn Ferry go-to-market initiatives and actually with how our clients engage with us. To assist with the transition from a global solution focus to regional geographies, The slides posted in our investor presentation include 3 new solution groupings within each geographic region. The 3 new solution groupings are search, which is the old executive search and professional search, talent and organizational solutions which is comprised of consulting and digital, and then workforce solutions, which is comprised of RPO, and interim. Now turning to our first quarter performance highlights. Estimated remaining fees under existing contracts grew 14% year over year to $1.92 billion led by global new business growth in workforce solutions. Our internal business referral rate increased to 29.4% of consolidated fee revenue it is up by about 300-basis-points year over year our marquee and diamond accounts remained steady at about 40% of consolidated fee revenue. Now both of these metrics really demonstrate the fee revenue synergies we are creating with our We Are Korn Ferry go-to-market activities. Our consolidated new business grew 12% year-over-year and fee revenue grew in all regions and all industry groups. Fear and our productivity, which we measure as new business per average fee earners annualized, grew year over year in all regions. Now I will talk a little bit about the company results. Consolidated fee revenue grew 7% year over year to $756 million again, marking our 6th consecutive quarter of growth. Earnings and profitability also remained strong. Adjusted EBITDA grew $8 million or 7% year over year to $128 million Adjusted EBITDA margin was flat year over year at 17% and adjusted diluted earnings per share grew $0.12 or 9% year over year to $1.43. As previously mentioned, our estimated remaining fees under existing contracts were $1.92 billion at the end of the quarter and we estimate about 56% or $1.1 billion will be recognized within the next 4 quarters and the remaining 44% or $835 million will be recognized beyond the next year. Turning to our regional results. Fee revenue in The Americas grew 9% year over year to $442 million led by growth in search and workforce solutions EMEA fee revenue continued to strengthen growing 4% year over year to $228 million Growth was broad based with strength in all solution groups. And APAC fee revenue inflected to growth in the first quarter reaching $87 million up 1% year over year led by search. Finally, we continue to maintain a disciplined balanced approach to capital allocation over the quarter. During the quarter, we paid $30 million of dividends and invested $15 million in capital expenditures. In the future, we will be inclined to use investable cash for the reduction of debt associated with the acquisition of AMS However, we will also closely monitor our share price and use capital for that if we find that more attractive. Turning to our outlook for the second quarter of fiscal 27. Assuming no further changes in worldwide geopolitical conditions, economic conditions, financial markets and foreign exchange rates, and including the addition of AMS. Now it is only for 2 months. September and October. Our second quarter fee revenue is expected to range from $860 million to $878 million Our adjusted EBITDA margin is expected to range from 16.8% to 17.2% and adjusted diluted earnings per share are expected to range from $1.30 to $1.40 per share. We have a page in the investor deck and provided some guidance assumptions And you will find adjusted diluted earnings per share includes the net after tax impact of the 2 months of incremental intangible asset amortization incremental interest net interest expense and incremental shares issued in connection with the acquisition of AMS. In closing, we remain focused on executing our We Are Korn Ferry go-to-market initiatives. Which are driving deeper more durable client relationships. Additionally, with the recent addition of AMS to the Korn Ferry family, we will strengthen our position in RPO and interim while broadening our capabilities into contingent workforce solutions and early career and campus recruiting. AMS has a substantial backlog of multiyear contracts and long tenured client relationships. Going forward, it is our goal to deepen the value of those client relationships introducing clients to all that Korn Ferry offers, Together with AMS, we are a much stronger company with greater capabilities to drive client business performance through their most precious asset which is their people. With that, we would be glad to answer any questions you may have.

We will now begin the question and answer session. Our first question will come from the line of Tobey Sommer with Truist. Please go ahead.

Good afternoon. This is Tyler on for Tobey. I just wanted to start with the new reporting structure. Can you maybe give us how we should think about growth rates in each of these segments going forward?

Well, when you look at the firm as a whole, that is what that is what I tend to look at. And, you know, this was precipitated. We made this decision several quarters ago that we had to change how we were facing off with clients. And then what we wanted was not a, you know, an isolated solution by solution approach, but rather a holistic face off with our clients. As we are Korn Ferry. And so that is been, you know, a very systematic effort that is been driven top down and bottom up, top down through our marquee and diamond accounts and then bottom up. Every single day through what we are doing in terms of looking at new engagements that are open. So, you know, I look at the firm overall over the last you know, 10 years, 20 years and you would find the growth rate that is probably gonna be around 10%-11%, 12%, something like that. Up until this latest investment that we have made, we looked at that growth rate and we said 60% was organic. 40% was inorganic, obviously with the combination of AMS. That changes those calculations and it is more like you know, 50-50. So I first look at the overall firm's growth rate historically and, you know, when I look at the demographic trends and what is happening in the world, there is no reason to believe I do not certainly see any reason that kind of growth rate that we have experienced in the past we would not continue to experience. Now you know, from quarter to quarter there is going to be there is gonna be regional differences. And, you know, APAC going back now several quarters has been impacted by you know, the socioeconomic changes that have been happening, particularly for example, in China. And so that you know, that region has been impacted pretty severely by that fall off since the pandemic. EMEA, over the last several quarters, is actually been our best performing region. More recently over the last couple of quarters, you will see that The Middle East has had a pretty big impact on the results there. Then Americas, you know, has been steady. So you know, I tend to look at it from a geographic perspective, the total first, so then each geography. And what it what it really reflects is, you know, how we are trying to drive you know, a client centric approach. And then, you know, when you look at solutions, this last quarter, the workforce solutions group and search, you know, those were both outstanding. Really, really outstanding growth rates, you know, 10% to 11%. And, you know, looking at new business over the last several months, it continues to reflect that trend.

Thank you. And in your executive search business, can you just talk about how AI is driving efficiencies and whether that is changing completion times or changing the margin structure of this business? Thank you.

It is. it is impacting the total firm and it is certainly has it has an impact on how we are completing searches But the thing that we are very, very careful about there is the data that we have. We have significant proprietary data, you know, comp data, on 30 million people around the world, 30 thousand companies. We have done 113 million executive assessments We have upwards of 15 thousand success profiles. We have pretty sensitive information on not just what people have done but who they are. And so with respect to AI, particularly as it relates to the search group, We have been we have been very, very careful. About how we use that. And we are gonna continue to be you know, very cautious about that. Because of the nature of our data. So certainly, it is it has had an impact. I think it is gonna continue to have an impact absolutely. And Thank you.

Tyler, this is Bob. Maybe a little bit more granular. I do not think what is happening is clients are expecting more from us in terms of candidate slates and we are able to deliver more of it, but it has not materially impacted the timeline of a search it is pretty consistent with what we have been seeing all along. And it you know, a lot of that is dependent on you know, the client scheduling, making decisions, and so on. So while we are meeting their demands on additional information request, the timeline has not changed.

And, you know, Bob, that is a you know, it is an interesting point because what we are seeing from clients and, you know, is and the candidates is that everybody seems to have a perfect resume. And so-- You know, what the our firm has been built on IP and data. And it is not what somebody has done at the levels that we operate. it is who you are. And so the IP and the data that I that I was talking about are absolutely fundamental to how we are doing our search work as well as our you know, talent and organizational development activities. So you know, it is actually because of AI, it is actually increasing the demand for what we have given our you know, the proprietary nature of the database. And ultimately, it is about you know, who somebody is. You know, you that is that is just the truth.

Our next question will come from the line of Trevor Romeo with William Blair. Please go ahead.

This is Melissa on for Trevor Romeo. Thank you guys so much for taking the questions. I guess I just have a couple on AMS to start. Congratulations closing that 1 too. How can we think about the cadence of synergy realization? Like, I guess, how much of the $40 million do we think we can be achieved immediately after close versus how much is back-end loaded?

Well, what we said, when we announced the investment was that we would get to $140 million of run rate EBITDA within 1 year. Within a year of the date of the announcement. The date of close actually is what we said. And so I look at that 40 million and first of all, when you look at our track record, which is critically important here, We have an enormous track record gearing the top line of a company that we make an investment in. That is-- that is demonstrated. it is proven. And we also have a track record of tapping the economies of scale. That come with platforms such as Korn Ferry. And so I am absolutely 200% confident that we are going to achieve that level of incremental EBITDA and more Because I think that the revenue opportunity here and the growth opportunity for us is enormous. In terms of the exact timing, what we have said, as I indicated, is that incremental 40 you would see, you know, by a year from closing, which would have been last week, we are going to achieve that much faster than that. Gregg.

And then maybe just to follow-up on that, I guess, how can we think about the role that seasonality plays for AMS I know early careers and campus recruiting might have a school year angle. Just wondering if there is anything else.

Yeah. It does. And they also they also-- it is going to follow the typical you know, kind of calendarization of holidays. And so that is yeah. You are absolutely correct. Generally speaking. And Bob, I do not know if you wanna provide any more precision around that.

Yeah. Melissa, what I would do is I would just follow the traditional Korn Ferry seasonality Their business is pretty similar to ours. Where we always have our low watermark in Q3. You get Thanksgiving in The US and then the year end holidays. You know, we give our people a week off. Clients give their folks 1 week or 2 weeks off. So it is just not as many hours in that quarter. So you will see that the same sort of pattern if you will, that you experienced with Korn Ferry?

Got it. that is what we figured. Thank you guys so much.

Our next question will come from the line of George Tong with Goldman Sachs. Please go ahead.

Hi, thanks. Good morning. You saw a 12% new business growth in the quarter. Can you unpack that a little bit and talk about how much of that growth came from RPO or more lumpy wins versus recurring revenue wins?

Well, I would say the RPO is actually recurring wins. When you when you look at the at the new business, clearly, over the last several months, given what is happened in The Middle East, and the demographic factors that we have talked about on previous calls. Search and workforce solutions have been absolutely, you know, they are the stronger performers. And what is been really nice to see and supported our thesis when we made this decision is all the investments that we have made in workforce solutions. Whether that is interim or RPO. You know, that is that is really paying dividends And in this quarter, the RPO new wins were something like $160 million and 50% of those were from new logos. So you are going to see you are definitely going to see lumpiness around the for example, the outsourcing wins But that is 1 of the reasons why we entered into this into this investment with AMS. Because what you have there is, you know, you have recurring loyal client relationships of scale. And, you know, their client relationships, just take their top 10 the average tenure of those client relationships is 14 years. So, you know, 2 thirds of their business is in the RPO area. And, you know, I look at that as incredibly sticky and recurring. And when you look at the combined backlog, now, you know, this firm has absolutely made an enormous transformation over the last decade, and even 2 decades. Where now you are looking at a firm that looks completely different. Than the Korn Ferry where I started. And today, we have got a backlog of you know, 3 and a 3.5 you know, billion dollars now with AMS. And so, yeah, the workforce solutions is a integral part. And we have certainly seen a lift in new business including like I said, including the interim area. Which has had a significant lift. And I think that is all that above market growth is has been driven by the We Are Korn Ferry strategy and look at our you know, the cross referrals this quarter, were almost 30%. Which is, you know, which is really, really good to see.

And Gary, do you maybe just because I think that the backlog commentary is really important for folks to understand. So if you look at our backlog, George, we were at the end of the quarter, about $1.9 billion. A percent of that or roughly 60% comes out within the next year. And then after that, you probably have another year and a half for the remainder. What AMS brings is not only a very large backlog, it is also given the strength and tenure of the customer relationships that Carrie talked about they are about 40% within the first year 60% comes out over the next 4 years. So it gives us much more durability and visibility and resilience going forward.

Got it. that is helpful. And then you are expecting AMS EBITDA to go from $100 million to $140 million within 1 year. Can you break out how much of the increase is going to come from revenue versus cost synergies.

Well, our focus is absolutely on revenue. And we have already, you know, we have hit the ground running. We have had big teams together now over the last week since we have closed and there is obviously a little bit of pre integration planning where we have mapped top 100 customers, put teams against them. there is actually meetings happening this week with clients. I mean, we are absolutely all over that. it is certainly gonna change the nature of our marquee and diamond portfolio. That undoubtedly will go up As you know, it is it is incredibly complementary given AMS' industry and geographic footprint. With Korn Ferry. And so I look at not only the RPO solution, but I look at contingent workforce solutions. And early careers and technology consulting and integration as well as reskilling. I look at all 5 solutions if you will. Very, very positively. And the contingent workforce solutions, I think could be something that is definitely multi-hundred-million and could be multi-billion dollars given the amount of money the company spend on the temporary side. And the offering is really cool where, you know, we will now go in and we can consolidate vendors and save a company you know, 600, 700, 800, 900 basis points on their spend. I mean, it is material savings. And the contingent workforce solutions, you know, we are going to take that given the relationships we have around the world, and it is the same with early careers. With the early careers and the campus hiring that they do and just the marquee logos. They are client logos are so impressive. And, you know, like I said, I mean, everybody's got a perfect resume and understanding who somebody is. Is incredibly important to that hiring And then on the technology consulting side, they bring skills that we need. Particularly around integrating TalentSuite with CRM and HR platform. So you know, I look at all of those and say, wow, over the next 3 to 5 years, you are going to see incredible lift, I believe. Given this iconic brand and bringing our organization together. So we are absolutely off and running. On the revenue side. And on the economies of scale side, we have a track record. And we have a global platform that is highly scalable. And so, you know, we definitely are going to look at the economies of scale and whether that is in vendor spend, we are looking at that very, very closely. And I would just go back to our track record and say, we do everything we say we are going to do and more. Will we hit that 40 million? We will absolutely hit that. Will we hit it before 1 year? We absolutely will. Very helpful.

Thank you.

Our next question will come from the line of Mark Marcon with Baird. Please go ahead.

Hey, good afternoon and thanks for taking my question. 1, Gary, just there is been a lot of mixed news with regards to the economy. You obviously had really good results during this last quarter. Just wondering like how much of your performance would you attribute to this kind of the general macro versus, what you guys are specifically doing and what is your sense of how the macro has evolved over the last you know, 3, 4 months and what the near term outlook is?

Well, I think the question of raising rates I mean, it is that is a real issue. And, you know, growth is very, very hard to come by. For most, you know, for most companies. If they are not building data centers or in the AI area. So I think it has been a challenging environment, and The Middle East has not made that any easier. And you see the impact on our on our EMEA results for sure. So has it has it worsened over the last 3 or 4 months? I would say no. But again, we have got the big question of, you know, of increasing rates. And more conflict in The Middle East that does not seem to end. I guess on the other side, Mark, what I would point out is just the tremendous you know, demographic opportunities because there is you know, a supply demand imbalance and you know this better than anybody. I mean, The US economy is only projected to produce like 5 million or 6 million jobs over the next decade, you know, compared to 25 million over the previous decade. So baby boomers are retiring, you know, it is and, you know, the labor force just is not gonna grow. The question then is, you know, how do you really find that talent that is not going to not just have a good company, but a great company. And I think, you know, my earlier comments about AI are absolutely right. I mean, everybody does have a perfect resume and I think our IP and our skill sets and our success profiles actually play an enormous role. With that kind of with that kind of backdrop. that is terrific.

And then with regards to AI and IP, how would you characterize the difference between the development of AI and making it easier to find people relative to what happened with LinkedIn when that first came along. And how that ended up impacting your discussion with your clients and how it ended up impacting the discussion around pricing?

Yeah. With LinkedIn, you know, it was around finding people. And that was and that was the big you know, question. And I think even back then, I said, you know, it is it is not a question of finding somebody. it is, you know, it is a question of finding out who they are. And I think with the AI, it is even more pronounced because what I am seeing, what I am hearing from clients is just everybody's perfect. And everybody has this stellar background and so I actually think it is it is way different from the LinkedIn days. And if you look at our you know, look at our pricing overall on the entire platform, it is gone up. it is increased over time. And I think you could make the argument that the same thing is could happen here because this 1 this 1 is it is not because it is recent. I just think this is way more profound than the LinkedIn days, you know, 15, 20 years ago.

Right. And then last 1 for me. Just with regards to AMS, I mean, your RPO group has competed against Alexander Mann/ AMS for, you know, more than a decade now. How are the groups getting along together and what was AMS's trajectory on a month by month basis kind of going into the close of this?

it is the same as what we had forecast So, you know, their CAGR over the last several years has looked you know, similar to ours. And if you go back further than that, the trend would be remarkably identical you know, with even before COVID and you have got the great resignation Everything kind of trended the same way. And going into the close, you know, when we announced it, we said, you know, excluding credit at the time, it was about $650 million a year. In annualized revenue. And going into the close and what we forecasted for the first 2 months, is, you know, pro rata share of that. It really you know, has not changed. And so, you know, we are looking at this. What we are gonna do now the go to market side, we are all over. As I talked about to George, we are absolutely all over that. So we are integrating right off the bat, say I hate the word integrating but synchronizing the go to market activity. So that is absolutely that is absolutely happening. it is gonna take us about 8 months or so to get everybody on the same platform and we are targeting our fiscal year ends April 30 We are targeting a May 1, 2027, date where we would get everybody onto a common platform that would be you know, SAP and the like and the common CRM all of that. We are gonna do some things immediately so that our frontline consultants we have about 1.8 thousand 1.9 thousand of those. So they have visibility. Into the customer activity for our largest clients. So we are absolutely doing that off right off the bat. You know, AMS has a completely different industry. Coverage than Korn Ferry. They are very, very heavy into financial services. it is about almost 50% of their overall portfolio. So I look from a, you know, industry and geographic, it is very, very complementary. At the end of the day, you know, we have we are looking at the business through a regional lens, so then through these 3 solutions. Our goal here is to have, you know, a unified RPO offering which we will have. But we are not gonna be on even on the same system for a number of months, a number of months. So the first few months here is really around learning about each other. And not saying, this is the way we have always done things. So this is the way we are gonna do it in the future. it is really around finding a third way. And that includes the IP. From both organizations. And that IP is obviously very, very meaningful. In the RPO area. So, you know, our principle here is do no harm. Focus on the customer right off the bat. We look at the economies of scale here over, you know, the next several months. But it is around, you know, it is around culture. I mean, people ignore when you do something like this, you know, people ignore culture you know, culture is the way an organization gets things done and by definition that is going to have to change. And that is 1 of the exciting things you know, about being in business. it is it is not stagnated. We constantly changes. So we have to we have to continue to evolve our culture collectively together. Terrific. Thanks so much, Gary.

Our final question will come from the line of Brian Camden with UBS. Please go ahead.

Good morning. This is Brian on for Josh. For my first question, are there any key metrics you are paying attention to and reviewing the progress of integration? And any milestones you are looking to reach the next couple of quarters?

Well, look, you know, 2 quarters is a pretty that is a pretty short amount of time. We want to look at whether we are expanding client relationships. You know, that is every organization whether it is a family, church, every organization has to grow. And so, we look at this and say, wow. 2 iconic brands, complimentary, geographic fit, industry fit, marquee logos. And so for us, what we tend to look at is, you know, how do our enterprise accounts do our marquee and diamond clients and what is happening with the cross referrals. And you have seen that now over time, it is gone up into the right. Pretty consistently. We would look to that you know. it is it is all about deepening relationships and innovation, you know, bringing new offerings to market. So all of those things we would certainly look at. But, you know, the first principle is do no harm. And make sure you understand and you understand each other before we, you know, find a 3rd way.

And Gary, would just add to that. If you think if you are trying to think over the next 2 months, remember what Gary said, we are not going to be integrated from a platform perspective until May 1st. So that, you know, just that in and of itself we should frame it up for you saying over the next couple of quarters, you will see some progress, but it will be more heavily weighted towards after the integration and that is primarily on the cost side. As Carrie indicated on the top line side, we are starting that right now.

that is helpful. Thank you. And then my second question, do you expect AMS to have any direct or indirect impact on your other existing businesses outside of RPO? Thank you.

Well, we do. We think that there is, you know, enormous opportunity to continue to deepen relationships and that is reflected in the cross referrals. So after this investment, we are gonna have something like 2,000 consultants that are for originating business. And so for the AMS, colleagues, that have come in to Legacy Korn Ferry, they have the opportunity to be able to deepen those relationships with other solutions that they did not have. And the same holds true for Korn Ferry. For legacy Korn Ferry and the 1.8 thousand of 1.85 thousand front frontline consultants that we have had. We have where, you know, they we have new capabilities to be able to offer to our existing customer base. And we have already put in cross referral incentives. And we are doing it as we speak, literally as we speak. For our new AMS colleagues, where they are going to be rewarded for opening the door and introducing you know, other solutions. So yeah, you are going to, you know, at the end of the day here after the transaction, you are gonna have a couple thousand frontline consultants. And, you know, we are looking at that productivity and, you know, we see that productivity as being about $2 million per consultant and that has obviously, that has room for significant expansion. Given the complementary nature of the solutions that we have here.

Hey, Gary, the only other thing I would add to that is you think about our go to market activities and go to market mindset, it is driven through the marquee and diamond accounts and it is all about deepening our client relationships and, you know, demonstrated by our referral rates going from 18% you know, back when we started measuring up to almost 30% today. The only thing I would add for AMS they operate very similar to us. And if you go back to 2020 and you look at their growth, Gary indicated, it was kind of the same as ours, their CAGR is 10%-11%. Over 50% of that came from expanding their existing client relationships. So those go to market activities that are important to us are also obviously very important to them. And very consistent with what we have done over time. Thank you both and good luck in Q2.

And it appears there are no further questions, Mr. Burnison.

Okay. Regina, thank you for hosting this. And, I thank everybody for joining. And we are very, very excited. About what we can do now. With, I think, the dominant firm in talent and organizational consulting. So thank you all and we will talk to you soon. Bye.

Ladies and gentlemen, this conference call will be available for replay for 1 week starting today, running through the end of the day on September 16, 2026 ending at midnight. You may access the echo service by dialing 800-770-2030 and entering the access code 267-2007 followed by the pound key. Additionally, the replay will be available for playback at the company's website www.kornferry.com, in the Investor Relations section. This concludes today's call. Thank you all for joining. You may now disconnect.