KORN FERRY (KFY) FY 2024 MD&A

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Annual Report on Form 10-K may contain certain statements that we believe are, or may be considered to be, “forward-looking” statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements generally can be identified by use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “will,” “likely,” “estimates,” “potential,” “continue” or other similar words or phrases. Similarly, statements that describe our objectives, plans or goals, including the timing and anticipated impacts of our business strategy, expected demand for and relevance of our products and services, and expected results of our business diversification strategy, are also forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statement. The principal risk factors that could cause actual performance and future actions to differ materially from the forward-looking statements include, but are not limited to, those relating to global and local political and or economic developments in or affecting countries where we have operations, such as inflation, global slowdowns, or recessions, competition, geopolitical tensions, shifts in global trade patterns, changes in demand for our services as a result of automation, dependence on and costs of attracting and retaining qualified and experienced consultants, impact of inflationary pressures on our profitability, maintaining our relationships with customers and suppliers and retaining key employees, maintaining our brand name and professional reputation, potential legal liability and regulatory developments, portability of client relationships, consolidation of or within the industries we serve, changes and developments in governmental laws and regulations, evolving investor and customer expectations with regard to environmental, social and governance matters, currency fluctuations in our international operations, risks related to growth, alignment of our cost structure, including as a result of recent workforce, real estate, and other restructuring initiatives, restrictions imposed by off-limits agreements, reliance on information processing systems, cybersecurity vulnerabilities or events, changes to data security, data privacy, and data protection laws, dependence on third parties for the execution of critical functions, limited protection of our intellectual property (“IP”), our ability to enhance and develop new technology, including artificial intelligence ("AI"), our ability to successfully recover from a disaster or other business continuity problems, employment liability risk, an impairment in the carrying value of goodwill and other intangible assets, treaties, or regulations on our business and our Company, deferred tax assets that we may not be able to use, our ability to develop new products and services, changes in our accounting estimates and assumptions, the utilization and billing rates of our consultants, seasonality, the expansion of social media platforms, the ability to effect acquisitions and integrate acquired businesses, resulting organizational changes, our indebtedness, the ultimate magnitude and duration of any future pandemics or similar outbreaks, and related restrictions and operational requirements that apply to our business and the businesses of our clients, and any related negative impacts on our business, employees, customers and our ability to provide services in affected regions, and the matters disclosed under the heading “Risk Factors” in the Company’s Exchange Act reports, including Item 1A included in this Annual Report on Form 10-K. Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included in this Annual Report on Form 10-K are made only as of the date of this Annual Report on Form 10-K and we undertake no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

The following presentation of management’s discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included in this Annual Report on Form 10-K. We also make available on the Investor Relations portion of our website earnings slides and other important information, which we encourage you to review.

Executive Summary

Korn Ferry (referred to herein as the “Company” or in the first-person notations “we,” “our,” and “us”) is a leading global organizational consulting firm. We help clients synchronize strategy, operations and talent to drive superior business performance. We work with organizations to design their structures, roles and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop and motivate their people.

We are pursuing a strategy to help Korn Ferry increase its focus on clients and collaborate intensively across the organization. This approach is intended to build on the best of our past and give us a clear path to the future with focused initiatives to increase our client and commercial impact. Korn Ferry is transforming how clients address their talent management needs. We have evolved from a mono-line business to a multi-faceted consultancy business, giving our consultants more frequent and expanded opportunities to engage with clients.

The Company services its clients with a core set of solutions that are anchored around talent and talent management – touching nearly every aspect of an employer’s engagement with their employees. Our five core solutions are as follows: Organizational Strategy, Assessment and Succession, Leadership and Professional Development, Total Rewards, and Talent Acquisition. Our colleagues engage with our clients through the delivery of one of our core solutions as a point solution sale or through combining component parts of our core solutions into an integrated solution. In either case, we are helping to solve our clients’ most challenging business and human capital issues.

Further differentiating our service offerings from our competitors is the unique combination of IP, content, and data sets that we have, which permeate throughout our solution areas. For many years, we have been accumulating data around

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assessments of executives and professionals, pay, success profiles, organizational engagement and design, job architecture, and candidates. Integrating this unique collection of data into our service offerings provides our colleagues with differentiated points of view and solutions, as well as the ability to demonstrate the efficacy of all of our offerings.

Our vision remains unchanged to become the premier organizational consulting firm. We believe our household brand, unparalleled IP, and diversification strategy will continue to positively influence our performance and accelerate the trajectory of thousands of organizations. Indeed, Korn Ferry is uniquely positioned as a firm relentlessly focused on synchronizing strategy, operations and talent and a firm that offers increasingly relevant solutions in a rapidly changing world. The continual advancement of technologies like generative AI creates a constant demand for workers to be upskilled or reskilled. We expect these changes and disruptions will lead to opportunities for Korn Ferry and make us more relevant than at any time in our history.

Leveraging the strong connection between our various service offering and our lines of business, we have an integrated go-to-market strategy. As we drive this strategy, a focal point for us is our Marquee and Regional account program which is comprised of about 350 of our top clients. These accounts have Global Account Leaders assigned who help to orchestrate the delivery of core and integrated solutions that cut across multiple lines of business – effectively making all of the Firm’s resources available as our clients tackle their business and human capital issues. Despite near-term headwinds, such as economic uncertainty, we believe Korn Ferry is poised for continued growth. We are capitalizing on the current and growing relevance of our core and integrated solutions which, in combination with the strong connections amongst our service offerings and our acquisitive activities, drives top-line synergies that have resulted in double digit fee revenue growth rates (CAGR) over the past twenty years.

Our eight reportable segments operate through the following five lines of business:

1.Consulting aligns organizational structure, culture, performance, development and people to drive sustainable growth by addressing four fundamental organizational and talent needs: Organizational Strategy, Assessment and Succession, Leadership and Professional Development, and Total Rewards. The Consulting teams work across our core capabilities, architecting integrated solutions and technology products to help clients execute their strategy in a digitally enabled world.

2.Digital develops IP and science-based talent technology products that empower our clients. Our talent products and talent platform support our clients in making critical talent decisions across the continuum from talent acquisition to talent development.

3.Executive Search helps organizations recruit board level, chief executive and other C-suite/senior executive and general management talent to deliver lasting impact. Our approach to placing talent brings together our research-based IP, proprietary assessments and behavioral interviewing with our practical experience to determine the ideal organizational fit. Salary benchmarking then helps us build appropriate frameworks for compensation and attraction. This business is managed and reported on a geographic basis and represents four of the Company’s reportable segments (Executive Search North America, Executive Search Europe, the Middle East and Africa ("EMEA"), Executive Search Asia Pacific ("APAC"), and Executive Search Latin America).

4.Professional Search & Interim delivers enterprise talent acquisition solutions for permanent placements at the professional level middle and upper management, and, for interim, those same levels plus senior executives. We help clients source high-quality candidates at speed and scale globally, covering single-hire to multi-hire permanent placements and interim contractors (that are focused on senior executive, information technology ("IT"), Finance & Accounting and HR roles).

5.Recruitment Process Outsourcing ("RPO") offers scalable recruitment outsourcing and project solutions leveraging a customized technology enabled service delivery platform and talent insights. Our scalable solutions, built on our IP, science, and data and powered by best-in-class technology and consulting expertise, enable us to act as a strategic partner in clients’ quest for superior recruitment outcomes and better candidate fit.

Highlights of our performance in fiscal 2024 include:

▪Approximately 80% of the executive searches we performed in fiscal 2024 were for board level, chief executive and other senior executive and general management positions. Our more than 3,700 search engagement clients in fiscal 2024 included many of the world’s largest and most prestigious public and private companies.

▪We have built strong client loyalty, with more than 85% of the assignments performed during fiscal 2024 having been on behalf of clients for whom we had conducted assignments in the previous three fiscal years.

▪More than 75% of our revenues were generated from clients that have utilized multiple lines of our business.

▪Operating income in fiscal 2024 was $212.9 million with an operating margin of 7.7%.

▪Fiscal 2024 Adjusted EBITDA was $408.2 million with an Adjusted EBITDA margin of 14.8%.

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▪Our fiscal 2024 Marquee and Regional Account fee revenue generated slightly more than 37% of our consolidated fee revenue and grew 3% compared to fiscal year 2023.

▪Consulting and Digital continued to show resilient business operations:

•Consulting fee revenue grew 3% in fiscal 2024.

•Digital fee revenue grew 3% in fiscal 2024 compared to fiscal 2023 with a 9% increase in Subscription & License fee revenue growing to $131.0 million in fiscal 2024.

Performance Highlights

In light of the challenging macroeconomic business environment arising from persistent inflationary pressures, rising interest rates, and global economic and geopolitical uncertainty, which we expected to result in near-term slowing or declines in fee revenue, on October 23, 2023, we initiated a plan (the "Plan") intended to align our workforce with our current business realities through position eliminations, which affected approximately eight percent of the Company's employees. The Plan resulted in restructuring charges, net of $68.6 million during fiscal 2024.

The Company evaluates performance and allocates resources based on the chief operating decision maker’s review of (1) fee revenue and (2) adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”). To the extent that such charges occur, Adjusted EBITDA excludes restructuring charges, integration/acquisition costs, certain separation costs and certain non-cash charges (goodwill, intangible asset and other impairments charges). For fiscal 2024, Adjusted EBITDA excluded $68.6 million of restructuring charges, net, $14.9 million of integration/acquisition costs, $1.6 million impairment of right-of-use assets and $1.6 million impairment of fixed assets. For fiscal 2023, Adjusted EBITDA excluded $42.6 million of restructuring charges, net, $14.9 million of integration/acquisition costs, $5.5 million impairment of right-of-use assets and $4.4 million impairment of fixed assets. For fiscal 2022, Adjusted EBITDA excluded $7.9 million of integration/acquisition costs, $7.4 million impairment of right-of-use assets and $1.9 million impairment of fixed assets.

Consolidated and the subtotals of Executive Search Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and have limitations as analytical tools. They should not be viewed as a substitute for financial information determined in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. In addition, they may not necessarily be comparable to non-GAAP performance measures that may be presented by other companies.

Management believes the presentation of these non-GAAP financial measures provides meaningful supplemental information regarding Korn Ferry’s performance by excluding certain charges, items of income and other items that may not be indicative of Korn Ferry’s ongoing operating results. The use of these non-GAAP financial measures facilitates comparisons to Korn Ferry’s historical performance and the identification of operating trends that may otherwise be distorted by the factors discussed above. Korn Ferry includes these non-GAAP financial measures because management believes it is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its evaluation of Korn Ferry’s ongoing operations and financial and operational decision-making. The accounting policies for the reportable segments are the same as those described in the summary of significant accounting policies in the accompanying consolidated financial statements, except that the above noted items are excluded to arrive at Adjusted EBITDA. Management further believes that Adjusted EBITDA is useful to investors because it is frequently used by investors and other interested parties to measure operating performance among companies with different capital structures, effective tax rates and tax attributes and capitalized asset values, all of which can vary substantially from company to company.

Critical Accounting Policies

The following discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements. Preparation of our periodic filings requires us to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates and assumptions and changes in the estimates are reported in current operations as new information is learned or upon the amounts becoming fixed and determinable. In preparing our consolidated financial statements and accounting for the underlying transactions and balances, we apply our accounting policies as disclosed in the notes to our consolidated financial statements. We consider the policies discussed below as critical to an understanding of our consolidated financial statements because their application places the most significant demands on management’s judgment and estimates. Specific risks for these critical accounting policies are described in the following paragraphs. Senior management has discussed the development, selection and key assumptions of the critical accounting estimates with the Audit Committee of the Board of Directors.

Revenue Recognition. Substantially all fee revenue is derived from talent and organizational consulting services and digital sales, stand-alone or as part of a solution, fees for professional services related to executive and professional recruitment performed on a retained basis, interim services and RPO, either stand-alone or as part of a solution.

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Revenue is recognized when control of the goods and services are transferred to the customer in an amount that reflects the consideration that we expect to be entitled to in exchange for those goods and services. Revenue contracts with customers are evaluated based on the five-step model outlined in Accounting Standard Codification (“ASC”) 606 ("ASC 606"), Revenue from Contracts with Customers: 1) identify the contract with a customer; 2) identify the performance obligation(s) in the contract; 3) determine the transaction price; 4) allocate the transaction price to the separate performance obligation(s); and 5) recognize revenue when (or as) each performance obligation is satisfied.

Consulting fee revenue is primarily recognized as services are rendered, measured by total hours incurred as a percentage of total estimated hours at completion. It is possible that updated estimates for consulting engagements may vary from initial estimates with such updates being recognized in the period of determination. Depending on the timing of billings and services rendered, we accrue or defer revenue as appropriate.

Digital fee revenue is generated from IP based software products enabling large-scale talent programs for pay, talent development, engagement, and assessment and is consumed directly by an end user or indirectly through a consulting engagement. Revenue is recognized as services are delivered and we have a legally enforceable right to payment. Revenue also comes from the sale of our product subscriptions, which are considered symbolic IP due to the dynamic nature of the content. As a result, revenue is recognized over the term of the contract. Functional IP licenses grant customers the right to use IP content via the delivery of a flat file. Because the IP content license has significant stand-alone functionality, revenue is recognized upon delivery and when an enforceable right to payment exists. Revenue for tangible and digital products sold by the Company, such as books and digital files, is recognized when these products are shipped.

Fee revenue from executive and professional search activities is generally one-third of the estimated first-year cash compensation of the placed candidate, plus a percentage of the fee to cover indirect engagement-related expenses. In addition to the search retainer, an uptick fee is billed when the actual compensation awarded by the client for a placement is higher than the estimated compensation. In the aggregate, upticks have been a relatively consistent percentage of the original estimated fee; therefore, we estimate upticks using the expected value method based on historical data on a portfolio basis. In a standard search engagement, there is one performance obligation, which is the promise to undertake a search. We generally recognize such revenue over the course of a search and when we are legally entitled to payment as outlined in the billing terms of the contract. Any revenues associated with services that are provided on a contingent basis are recognized once the contingency is resolved, as this is when control is transferred to the customer. These assumptions determine the timing of revenue recognition for the reported period. In addition to talent acquisition for permanent placement roles, the Professional Search & Interim segment also offers recruitment services for interim roles. Interim roles are short term in duration, generally less than 12 months. Generally, each interim role is a separate performance obligation. We recognize fee revenue over the duration that the interim resources’ services are provided which also aligns to the contracted invoicing plan and enforceable right to payment.

RPO fee revenue is generated through two distinct phases: 1) the implementation phase and 2) the post-implementation recruitment phase. The fees associated with the implementation phase are recognized over the period that the related implementation services are provided. The post-implementation recruitment phase represents end-to-end recruiting services to clients for which there are both fixed and variable fees, which are recognized over the period that the related recruiting services are performed.

Carrying Values. Valuations are required under GAAP to determine the carrying value of various assets. Goodwill is our most significant asset for which management is required to prepare a valuation. Management must identify whether events have occurred that may impact the carrying value of goodwill and make assumptions regarding future events, such as cash flows and profitability. Differences between the assumptions used to prepare these valuations and actual results could materially impact the carrying amount of these assets and our operating results.

Fair value of goodwill for purposes of the goodwill impairment test when performing the quantitative test is determined utilizing (1) a discounted cash flow analysis based on forecasted cash flows (including estimated underlying revenue and operating income growth rates) discounted using an estimated weighted-average cost of capital for market participants and (2) a market approach, utilizing observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). We also reconcile the results of these analyses to its market capitalization. If the carrying amount of a reporting unit exceeds its estimated fair value, goodwill is considered potentially impaired and further tests are performed to measure the amount of impairment loss, if any.

As of January 31, 2024, we completed our annual qualitative test which did not indicate any impairment. During the fourth quarter, we voluntarily changed the date of the annual impairment test from January 31 to February 1. This voluntary change is preferable under the circumstances as it results in better alignment with our annual operating plan process. This voluntary change in accounting principle related to the annual impairment testing date was applied prospectively and did not delay, accelerate or avoid an impairment charge. The quantitative test performed on February 1, 2024 did not indicate any impairment and as a result, no impairment charge was recognized. While historical performance and current expectations have resulted in fair values of goodwill in excess of carrying values, if our assumptions are not realized, it is possible that in the future an impairment charge may need to be recorded. However, it is not possible at this time to determine if an impairment charge would result or if such a charge would be material. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment test will prove to be accurate

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predictions of the future. There was no indication of potential impairment through April 30, 2024 that would have required further testing.

Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of the reporting units may include such items as follows:

▪A prolonged downturn in the business environment in which the reporting units operate including a longer than anticipated public health crisis;

▪An economic climate that significantly differs from our future profitability assumptions in timing or degree;

▪The deterioration of the labor markets;

▪Volatility in equity and debt markets;

▪Competition and disruption in our core business; and

▪Technological advances such as artificial intelligence that impact labor markets and can diminish the value of our IP.

Results of Operations

The following table summarizes the results of our operations as a percentage of fee revenue:

(Numbers may not total exactly due to rounding)

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The following tables summarize the results of our operations:

(Numbers may not total exactly due to rounding)

In the tables that follow, the Company presents a subtotal for Executive Search Adjusted EBITDA and a single percentage for Executive Search Adjusted EBITDA margin, which reflects the aggregate of all of the individual Executive Search Regions. These figures are non-GAAP financial measures and are presented as they are consistent with the Company’s lines of business and are financial metrics used by the Company’s investor base.

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Our Annual Report on Form 10-K for the year ended April 30, 2023 includes a discussion and analysis of our financial condition and results of operations for fiscal 2023 compared to fiscal 2022 in Item 7 of Part II, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Fiscal 2024 Compared to Fiscal 2023

Fee Revenue

Fee Revenue. Fee revenue decreased by $72.7 million, or 3%, to $2,762.7 million in fiscal 2024 compared to $2,835.4 million in fiscal 2023. Exchange rates favorably impacted fee revenue by $13.5 million in fiscal 2024 compared to fiscal 2023. Fee revenue decreased primarily due to decreases in demand for our permanent placement talent acquisition offerings, which include Executive Search, Professional Search Permanent Placement and RPO. This decrease was primarily due to a decline in demand driven by the challenging global economic environment. This was partially offset by the increase in fee revenue in the interim portion of the Professional Search & Interim, resulting from the acquisitions of Infinity Consulting Solutions and Salo (collectively " the Acquired Companies"), which were effective on August 1, 2022 and February 1, 2023, respectively, and increases in Consulting and Digital fee revenue.

Consulting. Consulting reported fee revenue of $695.0 million in fiscal 2024, an increase of $18.0 million, or 3%, compared to $677.0 million in fiscal 2023. The increase in fee revenue was mainly driven by increases in demand for our organizational strategy offering and assessment & succession solutions. Exchange rates favorably impacted fee revenue by $2.1 million, compared to fiscal 2023.

Digital. Digital reported fee revenue of $366.7 million in fiscal 2024, an increase of $12.0 million, or 3%, compared to $354.7 million in fiscal 2023. The increase in fee revenue was mainly driven by increases in demand for organizational strategy, leadership and professional development, and sales of total rewards. Exchange rates favorably impacted fee revenue by $0.8 million, compared to fiscal 2023.

Executive Search North America. Executive Search North America reported fee revenue of $506.9 million in fiscal 2024, a decrease of $55.2 million, or 10%, compared to $562.1 million in fiscal 2023. Exchange rates unfavorably impacted fee revenue by $0.6 million in fiscal 2024 compared to fiscal 2023. North America’s fee revenue decreased due to an 11% decrease in the number of engagements billed, driven by a decline in demand for executive searches as a result of clients being affected by the challenging economic environment, partially offset by a 1% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2024 compared to fiscal 2023.

Executive Search EMEA. Executive Search EMEA reported fee revenue of $184.5 million in fiscal 2024, a decrease of $2.5 million, or 1%, compared to $187.0 million in fiscal 2023. Exchange rates favorably impacted fee revenue by $7.0 million, or 4%, in fiscal 2024 compared to fiscal 2023. The decrease in fee revenue was primarily due to a 7% decrease in the number of engagements billed, partially offset by a 2% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2024 compared to fiscal 2023.

Executive Search Asia Pacific. Executive Search Asia Pacific reported fee revenue of $85.9 million in fiscal 2024, a decrease of $9.7 million, or 10%, compared to $95.6 million in fiscal 2023. Exchange rates unfavorably impacted fee revenue by $2.2 million, or 2%, in fiscal 2024 compared to fiscal 2023. The decrease in fee revenue was due to a 15% decrease in the number of engagements billed, partially offset by an 8% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2024 compared to fiscal 2023.

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Executive Search Latin America. Executive Search Latin America reported fee revenue of $28.9 million in fiscal 2024, a decrease of $2.1 million, or 7%, compared to $31.0 million in fiscal 2023. Exchange rates favorably impacted fee revenue by $1.5 million, or 5%, in fiscal 2024 compared to fiscal 2023. The decrease in fee revenue was due to a 16% decrease in the number of engagements billed, partially offset by a 5% increase in the weighted-average fees billed per engagement (calculated using local currency) in fiscal 2024 compared to fiscal 2023.

Professional Search & Interim. Professional Search & Interim reported fee revenue of $540.6 million in fiscal 2024, an increase of $37.2 million, or 7%, compared to $503.4 million in fiscal 2023. Exchange rates favorably impacted fee revenue by $1.5 million in fiscal 2024 compared to fiscal 2023. The increase in fee revenue was due to an increase in interim fee revenue of $94.8 million, mainly driven by the Acquired Companies. This increase was partially offset by a decrease in permanent placement fee revenue of $57.6 million.

RPO. RPO reported fee revenue of $354.1 million in fiscal 2024, a decrease of $70.5 million, or 17%, compared to $424.6 million in fiscal 2023. Exchange rates favorably impacted fee revenue by $3.4 million, or 1%, in fiscal 2024 compared to fiscal 2023. The decrease in fee revenue was primarily due to a decline in the number of placements being requested by existing clients as a result of clients being affected by the challenging economic environment as well as clients "labor hoarding" during fiscal 2024.

Compensation and Benefits

Compensation and benefits expense decreased by $57.0 million, or 3%, to $1,844.2 million in fiscal 2024 from $1,901.2 million in fiscal 2023. Exchange rates unfavorably impacted compensation and benefits by $11.8 million, or 1%, in fiscal 2024 compared to fiscal 2023. The decrease in compensation and benefits expense was primarily due to a decrease in salaries and related payroll taxes of $85.8 million driven by an 8% decrease in average headcount in fiscal 2024 compared to fiscal 2023. Also contributing to the decrease was a $19.4 million decrease in performance-related bonus expense due to lower fee revenues in fiscal 2024 compared to fiscal 2023. The decrease was partially offset by higher deferred compensation expenses of $29.7 million as a result of an increase in the fair value of participants' accounts, a $9.2 million increase in severance due to lay-offs that took place during the year, $5.7 million more in integration and acquisition costs and an increase in the amortization of long-term awards of $4.4 million in fiscal 2024 compared to fiscal 2023.

Consulting compensation and benefits expense increased by $6.0 million, or 1%, to $484.5 million in fiscal 2024 from $478.5 million in fiscal 2023. Exchange rates unfavorably impacted compensation and benefits by $2.6 million, or 1%, in fiscal 2024 compared to fiscal 2023. The increase in compensation and benefits expense was primarily due to increases in deferred compensation of $4.3 million as a result of increases in the fair value of participants' accounts and a $1.8 million increase in severance due to more lay-offs in fiscal 2024 compared to fiscal 2023.

Digital compensation and benefits expense decreased by $1.2 million, or 1%, to $187.9 million in fiscal 2024 from $189.1 million in fiscal 2023. Exchange rates unfavorably impacted compensation and benefits by $0.9 million in fiscal 2024 compared to fiscal 2023. The decrease in compensation and benefits expense was primarily due to a decrease in salaries and related payroll taxes of $9.0 million driven by a 2% decrease in average headcount and a decrease in restricted stock compensation expense of $2.5 million, partially offset by increases in performance-related bonus expense of $5.8 million and commission expense of $3.3 million driven by the segment revenue growth in fiscal 2024 compared to fiscal 2023, and a $1.7 million increase in the amortization of long-term awards.

Executive Search North America compensation and benefits expense decreased by $14.9 million, or 4%, to $371.2 million in fiscal 2024 compared to $386.1 million in fiscal 2023. Exchange rates favorably impacted compensation and benefits by $0.3 million in fiscal 2024 compared to fiscal 2023. The decrease in compensation and benefits expense was primarily due to decreases in performance-related bonus expense of $28.1 million due to lower segment fee revenue and salaries and related payroll taxes of $5.8 million driven by a 4% decrease in average headcount. The decrease in compensation and benefits expense was partially offset by a higher deferred compensation expense of $21.0 million as a result of increases in the fair value of participants' accounts in fiscal 2024 compared to 2023.

Executive Search EMEA compensation and benefits expense increased by $1.2 million, or 1%, to $141.7 million in fiscal 2024 compared to $140.5 million in fiscal 2023. Exchange rates unfavorably impacted compensation and benefits by $4.4 million, or 3%, in fiscal 2024 compared to fiscal 2023. The increase in compensation and benefits expense was primarily due to an increase in severance expense of $4.4 million due to the lay-offs that took place in fiscal 2024 compared to fiscal 2023. The increase was partially offset by a decrease in performance-related bonus expense of $2.3 million due to lower segment fee revenue and a $1.0 million decrease in salaries and related payroll taxes driven by a 1% decrease in average headcount.

Executive Search Asia Pacific compensation and benefits expense decreased by $3.1 million, or 5%, to $58.8 million in fiscal 2024 compared to $61.9 million in fiscal 2023. Exchange rates favorably impacted compensation and benefits by $1.1 million, or 2%, in fiscal 2024 compared to fiscal 2023. The decrease in compensation and benefits expense was primarily due to a decrease in performance-related bonus expense of $1.9 million in fiscal 2024 compared to fiscal 2023 due to lower segment fee revenue and a decrease in salaries and related payroll taxes of $0.7 million driven by a 5% decrease in average headcount.

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Executive Search Latin America compensation and benefits expense decreased by $1.7 million, or 8%, to $18.7 million in fiscal 2024 compared to $20.4 million in fiscal 2023. Exchange rates unfavorably impacted compensation and benefits by $1.0 million, or 5%, in fiscal 2024 compared to fiscal 2023. The decrease in compensation and benefits expense was primarily due to a decrease in performance-related bonus expense of $1.5 million in fiscal 2024 compared to fiscal 2023 due to lower segment fee revenue.

Professional Search & Interim compensation and benefits expense increased by $1.1 million to $224.4 million in fiscal 2024 compared to $223.3 million in fiscal 2023. Exchange rates unfavorably impacted compensation and benefits by $0.8 million in fiscal 2024 compared to fiscal 2023. The increase in compensation and benefits expense was primarily due to increases in integration/acquisition costs of $5.7 million due to the acquisitions of the Acquired Companies and higher deferred compensation expense of $2.2 million as a result of increases in the fair value of participants' accounts. Further contributing to the increase in compensation and benefits expense were increases in employee insurance of $1.7 million and performance-related bonus expense of $1.4 million, partially offset by lower salaries and related payroll taxes of $5.7 million due to a 3% reduction in average headcount and a decrease in commission expense of $4.4 million in fiscal 2024 compared to fiscal 2023.

RPO compensation and benefits expense decreased by $54.7 million, or 16%, to $284.3 million in fiscal 2024 from $339.0 million in fiscal 2023. Exchange rates unfavorably impacted compensation and benefits by $3.4 million, or 1%, in fiscal 2024 compared to fiscal 2023. The decrease in compensation and benefits expense was primarily due to a decrease in salaries and related payroll taxes of $56.0 million driven by a 15% decrease in average headcount in fiscal 2024 compared to fiscal 2023. Average headcount declined due to cost reduction actions and attrition.

Corporate compensation and benefits expense increased by $10.2 million, or 16%, to $72.6 million in fiscal 2024 from $62.4 million in fiscal 2023. The increase was primarily due to increases in restricted stock compensation expense of $4.9 million and higher deferred compensation expense of $2.1 million due to an increase in the fair value of participants' accounts in fiscal 2024 compared to fiscal 2023. Also contributing to the increase in compensation and benefits expense was a decrease in the cash surrender value (“CSV”) of company-owned life insurance (“COLI”) of $1.8 million as a result of less death benefits recorded in fiscal 2024 compared to fiscal 2023.

General and Administrative Expenses

General and administrative expenses decreased by $9.5 million, or 4%, to $259.0 million in fiscal 2024 compared to $268.5 million in fiscal 2023. Exchange rates favorably impacted general and administrative expenses by $0.8 million in fiscal 2024 compared to fiscal 2023. The decrease in general and administrative expenses was primarily due to decreases in impairment of fixed and right-of-use assets of $6.6 million, integration/acquisition costs of $5.8 million and legal and professional expenses of $4.5 million in the fiscal 2024 compared to fiscal 2023. The decrease was partially offset by higher marketing and business development expenses of $4.5 million and an increase in foreign exchange loss of $2.5 million in fiscal 2024 compared to fiscal 2023.

Consulting general and administrative expenses decreased by $3.2 million, or 6%, to $54.7 million in fiscal 2024 compared to $57.9 million in fiscal 2023. The decrease in general and administrative expenses was primarily due to a decrease in impairment of fixed and right-of-use assets of $5.4 million, partially offset by higher bad debt expense of $1.9 million in fiscal 2024 compared to fiscal 2023.

Digital general and administrative expenses decreased by $0.7 million, or 2%, to $39.9 million in fiscal 2024 compared to $40.6 million in fiscal 2023.

Executive Search North America general and administrative expenses decreased by $0.2 million, or 1%, to $32.2 million in fiscal 2024 from $32.4 million in fiscal 2023.

Executive Search EMEA general and administrative expenses increased by $2.1 million, or 14%, to $16.8 million in fiscal 2024 from $14.7 million in fiscal 2023. The increase in general and administrative expenses was primarily due to an increase in premise and office expense of $1.0 million, of which $0.4 million is related to the impairment of right-of-use assets associated with the reduction of the Company's real estate footprint. Also contributing to the increase was a foreign exchange loss of $0.2 million in fiscal 2024 compared to a foreign exchange gain of $0.4 million in fiscal 2023.

Executive Search Asia Pacific general and administrative expenses decreased by $0.9 million, or 9%, to $8.8 million in fiscal 2024 from $9.7 million in fiscal 2023.

Executive Search Latin America general and administrative expenses increased by $3.4 million, or 243%, to $4.8 million in fiscal 2024 from $1.4 million in fiscal 2023. The increase in general and administrative expenses was primarily due to a foreign exchange loss of $0.8 million in fiscal 2024 compared to a foreign exchange gain of $1.4 million in fiscal 2023.

Professional Search & Interim general and administrative expenses decreased by $6.0 million, or 20%, to $24.3 million in fiscal 2024 from $30.3 million in fiscal 2023. The decrease in general and administrative expenses was primarily due to decreases in bad debt expense of $2.6 million and integration/acquisition costs of $2.1 million in fiscal 2024 compared to fiscal 2023 and impairment of fixed and right-of-use assets of $0.6 million incurred in fiscal 2023.

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RPO general and administrative expenses decreased by $2.5 million, or 12%, to $18.8 million in fiscal 2024 from $21.3 million in fiscal 2023. The decrease in general and administrative expenses was primarily due to a foreign exchange gain of $0.1 million in fiscal 2024 compared to a foreign exchange loss of $1.2 million in fiscal 2023 and a decrease in premise and office expense of $0.9 million.

Corporate general and administrative expenses decreased by $1.3 million, or 2%, to $58.8 million in fiscal 2024 compared to $60.1 million in fiscal 2023. The decrease was primarily due to lower legal and other professional fees of $5.3 million and a decrease in integration/acquisition costs of $3.6 million, partially offset by increases in marketing and business development expenses of $4.0 million and computer license expense of $1.7 million and a decrease in foreign exchange gain of $1.8 million in fiscal 2024 compared to fiscal 2023.

Cost of Services Expense

Cost of services expense consists of contractor and product costs related to the delivery of various services and products through Consulting, Digital, Professional Search & Interim and RPO. Cost of services expense was $300.0 million in fiscal 2024, an increase of $61.5 million, or 26%, compared to $238.5 million in fiscal 2023. Professional Search & Interim accounts for $54.8 million of the increase primarily due to the Acquired Companies, which perform a significant amount of interim services. Interim services have a higher cost of service expense as compared to the Company's other segments. The rest of the increase was from the Consulting and Digital segments due to an increase in fee revenue in the segments. Cost of services expense, as a percentage of fee revenue, was 11% and 8% in fiscal 2024 and fiscal 2023, respectively.

Depreciation and Amortization Expenses

Depreciation and amortization expenses were $78.0 million in fiscal 2024, an increase of $9.7 million, or 14%, compared to $68.3 million in fiscal 2023. The increase was primarily due to technology investments made in the current and prior year, and an increase in amortization of intangible assets due to the Acquired Companies.

Restructuring Charges, Net

During the second quarter of fiscal 2024, we implemented the Plan to eliminate excess capacity resulting from a challenging and uncertain macroeconomic business environment. As a result, in fiscal 2024, the Company recorded restructuring charges, net of $68.6 million. In fiscal 2023, the Company implemented a separate restructuring plan to eliminate excess capacity resulting from the challenging macroeconomic business environment impacting demand and to realign our workforce with our business needs and objectives and as a result recorded restructuring charges, net of $42.6 million.

Net Income Attributable to Korn Ferry

Net income attributable to Korn Ferry was $169.2 million in fiscal 2024, a decrease of $40.3 million, or 19%, compared to $209.5 million in fiscal 2023. The decrease in net income attributable to Korn Ferry was primarily due to a decrease in fee revenue combined with an increase in cost of services as a result of the Acquired Companies. Further contributing to the decrease in net income attributable to Korn Ferry was an increase in the restructuring charges, net recorded during fiscal 2024 in order to align our workforce to the challenging macroeconomic business environment. The decrease in net income was partially offset by decreases in compensation and benefits expenses, income tax provision and general and administrative expenses and an increase in other income, net due to greater gains from the increase in the fair value of our marketable securities that are held in trust for the settlement of the Company's obligation under the ECAP in fiscal 2024 compared to fiscal 2023. Net income attributable to Korn Ferry, as a percentage of fee revenue, was 6% in fiscal 2024 compared to 7% in fiscal 2023.

Adjusted EBITDA

Adjusted EBITDA was $408.2 million in fiscal 2024, a decrease of $49.1 million, or 11%, compared to $457.3 million in fiscal 2023. The decrease in Adjusted EBITDA was driven by a decrease in fee revenue combined with an increase in cost of services, partially offset by decreases in compensation and benefits expense (excluding integration/acquisition costs), and an increase in other income driven by the increases in the value of our marketable securities (that are held in trust to satisfy obligations under our deferred compensation plan) due to market movements in fiscal 2024 compared to fiscal 2023. Adjusted EBITDA, as a percentage of fee revenue, was 15% in fiscal 2024 compared to 16% in fiscal 2023.

Consulting Adjusted EBITDA was $114.3 million in fiscal 2024, an increase of $5.8 million, or 5%, compared to $108.5 million in fiscal 2023. The increase in Adjusted EBITDA was driven by an increase in fee revenue, partially offset by increases in compensation and benefits expense and cost of services expense in fiscal 2024 compared to fiscal 2023. Consulting Adjusted EBITDA, as a percentage of fee revenue, was 16% in both fiscal 2024 and fiscal 2023.

Digital Adjusted EBITDA was $108.7 million in fiscal 2024, an increase of $11.2 million, or 11%, compared to $97.5 million in fiscal 2023. The increase in Adjusted EBITDA was mainly driven by an increase in fee revenue combined with a decrease in compensation and benefits expense, partially offset by an increase in cost of services expense in fiscal 2024 compared to fiscal 2023. Digital Adjusted EBITDA, as a percentage of fee revenue, was 30% in fiscal 2024 compared to 27% in fiscal 2023.

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Executive Search North America Adjusted EBITDA decreased by $20.2 million, or 14%, to $120.7 million in fiscal 2024 compared to $140.9 million in fiscal 2023. The decrease in Adjusted EBITDA was primarily driven by a decrease in the segment fee revenue, partially offset by a decrease in compensation and benefits expense and an increase in other income driven by the increases in the value of our marketable securities (that are held in trust to satisfy obligations under our deferred compensation plan) due to market movements in fiscal 2024 compared to fiscal 2023. Executive Search North America Adjusted EBITDA, as a percentage of fee revenue, was 24% in fiscal 2024 compared to 25% in fiscal 2023.

Executive Search EMEA Adjusted EBITDA decreased by $5.5 million, or 18%, to $25.9 million in fiscal 2024 compared to $31.4 million in fiscal 2023. The decrease in Adjusted EBITDA was driven by lower fee revenue in the segment coupled with increases in compensation and benefits expense and general and administrative expenses (excluding impairment charges) in fiscal 2024 compared to fiscal 2023. Executive Search EMEA Adjusted EBITDA, as a percentage of fee revenue, was 14% in fiscal 2024 compared to 17% in fiscal 2023.

Executive Search Asia Pacific Adjusted EBITDA decreased by $5.3 million, or 22%, to $18.9 million in fiscal 2024 compared to $24.2 million in fiscal 2023. The decrease in Adjusted EBITDA was primarily driven by lower fee revenue in the segment, partially offset by decreases in compensation and benefits expense and general and administrative expenses in fiscal 2024 compared to fiscal 2023. Executive Search Asia Pacific Adjusted EBITDA, as a percentage of fee revenue, was 22% in fiscal 2024 compared to 25% in fiscal 2023.

Executive Search Latin America Adjusted EBITDA decreased by $3.8 million, or 40%, to $5.6 million in fiscal 2024 compared to $9.4 million in fiscal 2023. The decrease in Adjusted EBITDA was driven by lower fee revenue in the segment and an increase in general and administrative expenses, partially offset by a decrease in compensation and benefits expense in fiscal 2024 compared to fiscal 2023. Executive Search Latin America Adjusted EBITDA, as a percentage of fee revenue, was 19% in fiscal 2024 compared to 30% in fiscal 2023.

Professional Search & Interim Adjusted EBITDA was $101.9 million in fiscal 2024, a decrease of $9.0 million, or 8%, compared to $110.9 million in fiscal 2023. The decrease in Adjusted EBITDA was mainly driven by higher cost of services expense, partially offset by higher fee revenue in the segment driven by the Acquired Companies and decreases in compensation and benefits expense (excluding integration/acquisition costs) and general and administrative expenses (excluding impairment charges and integration/acquisition costs). Professional Search & Interim Adjusted EBITDA, as a percentage of fee revenue, was 19% in fiscal 2024 compared to 22% in fiscal 2023.

RPO Adjusted EBITDA was $40.4 million in fiscal 2024, a decrease of $12.2 million, or 23%, compared to $52.6 million in fiscal 2023. The decrease in Adjusted EBITDA was mainly driven by lower fee revenue in the segment, partially offset by decreases in compensation and benefits expense and general and administrative expenses (excluding impairment charges) in fiscal 2024 compared to fiscal 2023. RPO Adjusted EBITDA, as a percentage of fee revenue, was 11% in fiscal 2024 compared to 12% in fiscal 2023.

Other Income, Net

Other income, net was $30.7 million in fiscal 2024 compared to $5.3 million in fiscal 2023. The difference was primarily due to greater gains from the increase in the fair value of our marketable securities that are held in trust for the settlement of the Company's obligation under the ECAP in fiscal 2024 compared to fiscal 2023.

Interest Expense, Net

Interest expense, net primarily relates to our Notes issued in December 2019, borrowings under our COLI policies and interest cost related to our deferred compensation plans, which are partially offset by interest earned on cash and cash equivalent balances. Interest expense, net was $21.0 million in fiscal 2024 compared to $25.9 million in fiscal 2023. Interest expense, net decreased due to an increase in interest income earned on cash and cash equivalent balances as a result of higher interest rates in fiscal 2024 compared to fiscal 2023.

Income Tax Provision

The provision for income tax was $50.1 million in fiscal 2024 compared to $82.7 million in fiscal 2023. This reflects a 22.5% effective tax rate for fiscal 2024 compared to a 28.0% effective tax rate for fiscal 2023. In addition to the impact of U.S. state income taxes and jurisdictional mix of earnings, which generally create variability in our effective tax rate over time, the lower effective tax rate in fiscal 2024 was primarily due to a $9.7 million non-recurring tax benefit from actions taken in connection with the worldwide minimum tax that resulted in the release of a valuation allowance. The fiscal 2023 effective tax rate was higher due to a tax expense recorded for withholding taxes that were not eligible for credit.

Net Income Attributable to Noncontrolling Interest

Net income attributable to noncontrolling interest represents the portion of a subsidiary’s net earnings that are attributable to shares of such subsidiary not held by Korn Ferry that are included in the consolidated results of income. Net income attributable to noncontrolling interest was $3.4 million and $3.5 million in fiscal 2024 and fiscal 2023, respectively.

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Liquidity and Capital Resources

The Company and its Board of Directors endorse a balanced approach to capital allocation. The Company’s long-term priority is to invest in growth initiatives, such as the hiring of consultants, the continued development of IP and derivative products and services and the investment in synergistic, accretive merger and acquisition transactions that are expected to earn a return that is superior to the Company's cost of capital. Next, the Company’s capital allocation approach contemplates the return of a portion of excess capital to stockholders, in the form of a regular quarterly dividend, subject to the factors discussed below and in the “Risk Factors” section of this Annual Report on Form 10-K. Additionally, the Company considers share repurchases on an opportunistic basis and subject to the terms of our Amended Credit Agreement (defined below) and Notes, as well as using excess cash to repay the Notes.

On December 16, 2019, we completed a private placement of the Notes with a $400.0 million principal amount pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended. The Notes were issued with a $4.5 million discount and will mature December 15, 2027, with interest payable semi-annually in arrears on June 15 and December 15 of each year, that commenced on June 15, 2020. The Notes represent senior unsecured obligations that rank equally in right of payment to all existing and future senior unsecured indebtedness. We may redeem the Notes prior to maturity, subject to certain limitations and premiums defined in the indenture governing the Notes. The Notes are guaranteed by each of our existing and future wholly owned domestic subsidiaries to the extent such subsidiaries guarantee our obligations under the Credit Agreement (defined below). The indenture governing the Notes requires that, upon the occurrence of both a Change of Control and a Rating Decline (each as defined in the indenture), we shall make an offer to purchase all of the Notes at 101% of their principal amount, and accrued and unpaid interest. We used the proceeds from the offering of the Notes to repay $276.9 million outstanding under our prior revolving credit facility and to pay expenses and fees in connection therewith. As of April 30, 2024, the fair value of the Notes was $380.5 million, which is based on borrowing rates currently required of notes with similar terms, maturity and credit risk.

On June 24, 2022, we entered into an amendment (the "Amendment") to our December 16, 2019 Credit Agreement (the "Credit Agreement"; as amended by the Amendment, the “Amended Credit Agreement”) with the lenders party thereto and Bank of America, National Association as administrative agent, to, among other things (i) extend the existing maturity date of the revolving facility to June 24, 2027, (ii) provide for a new delayed draw term loan facility as described below, (iii) replace the London interbank offered rate with Term SOFR, and (iv) replace the existing financial covenants with financial covenants described below. The Amended Credit Agreement provides for five-year senior secured credit facilities in an aggregate amount of $1,150.0 million comprised of a $650.0 million revolving credit facility (the "Revolver") and a $500.0 million delayed draw term loan facility with the delayed draw having an expiration date of June 23, 2023 (the "Delayed Draw Facility", and together with the Revolver, the "Credit Facilities"). The Amended Credit Agreement also provides that, under certain circumstances, the Company may incur term loans or increase the aggregate principal amount of revolving commitments by an aggregate amount of up to $250 million plus an unlimited amount subject to a consolidated secured net leverage ratio of 3.25 to 1.00. See Note 11 —Long-Term Debt for a further description of the Amended Credit Agreement. The Company has a total of $645.5 million and $1,145.4 million available under the Credit Facilities after $4.5 million and $4.6 million of standby letters of credit have been issued as of April 30, 2024 and 2023, respectively. Of the amount available under the Credit Facilities as of April 30, 2023, $500.0 million was under the Delayed Draw Facility that expired on June 24, 2023. The Company had a total of $13.2 million and $11.5 million of standby letters with other financial institutions as of April 30, 2024 and 2023, respectively. The standby letters of credit were generally issued as a result of entering into office premise leases.

On December 8, 2014, the Board of Directors adopted a dividend policy to distribute to our stockholders a regular quarterly cash dividend of $0.10 per share. Every quarter since the adoption of the dividend policy, the Company has declared a quarterly dividend. On June 21, 2021 and 2022, the Board of Directors increased the quarterly dividend to $0.12 per share and $0.15 per share, respectively. On June 26, 2023, the Board of Directors approved an increase of 20% in the quarterly dividend, which increased the quarterly dividend to $0.18 per share. On December 5, 2023, the Board of Directors approved an increase of 83% in the quarterly dividend, which increased the quarterly dividend to $0.33 per share. On June 12, 2024, the Board of Directors approved an increase in the quarterly dividend to $0.37 per share. The Amended Credit Agreement permits us to pay dividends to our stockholders and make share repurchases so long as there is no default under the Amended Credit Agreement, our total funded debt to adjusted EBITDA ratio (as set forth in the Amended Credit Agreement, the “consolidated net leverage ratio”) is no greater than 5.00 to 1.00, and we are in pro forma compliance with our financial covenant. Furthermore, our Notes allow us to pay $25.0 million of dividends per fiscal year with no restrictions plus an unlimited amount of dividends so long as our consolidated total leverage ratio is not greater than 3.50 to 1.00, and there is no default under the indenture governing the Notes. The declaration and payment of future dividends under the quarterly dividend program will be at the discretion of the Board of Directors and will depend upon many factors, including our earnings, capital requirements, financial conditions, the terms of our indebtedness and other factors our Board of Directors may deem to be relevant. Our Board of Directors may, however, amend, revoke or suspend our dividend policy at any time and for any reason.

On June 21, 2022, our Board of Directors approved an increase to the share repurchase program of approximately $300 million, which at the time brought our available capacity to repurchase shares in the open market or privately negotiated transactions to $318.0 million. The Company repurchased approximately $52.5 million and $93.9 million of the Company’s stock during fiscal 2024 and fiscal 2023, respectively. As of April 30, 2024, $182.7 million remained available for common

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stock repurchases under our share repurchase program. Any decision to continue to execute our currently outstanding share repurchase program will depend on our earnings, capital requirements, financial condition and other factors considered relevant by our Board of Directors.

Our primary source of liquidity is the fee revenue generated from our operations, supplemented by our borrowing capacity under our Amended Credit Agreement. Our performance is subject to the general level of economic activity in the geographic regions and the industries we service. We believe, based on current economic conditions, that our cash on hand and funds from operations and the Amended Credit Agreement will be sufficient to meet anticipated working capital, capital expenditures, general corporate requirements, debt repayments, share repurchases and dividend payments under our dividend policy during the next 12 months and thereafter for the foreseeable future. However, if the national or global economy, credit market conditions and/or labor markets were to deteriorate in the future, including as a result of ongoing macroeconomic uncertainty due to inflation and a potential recession, such changes have and could put further negative pressure on demand for our services and affect our operating cash flows. If these conditions were to persist over an extended period of time, we may incur negative cash flows and it might require us to access additional borrowings under the Amended Credit Agreement to meet our capital needs and/or discontinue our share repurchases and dividend policy.

Cash and cash equivalents and marketable securities were $1,195.4 million and $1,067.9 million as of April 30, 2024 and 2023, respectively. Net of amounts held in trust for deferred compensation plans and accrued bonuses, cash and cash equivalents and marketable securities were $606.4 million and $488.2 million at April 30, 2024 and 2023, respectively. As of April 30, 2024 and 2023, we held $393.8 million and $395.2 million, respectively of cash and cash equivalents in foreign locations, net of amounts held in trust for deferred compensation plans and to pay accrued bonuses. Cash and cash equivalents consist of cash and highly liquid investments purchased with original maturities of three months or less. Marketable securities consist of mutual funds and investments in commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities. The primary objectives of our investment in mutual funds are to meet the obligations under certain of our deferred compensation plans, while the commercial paper, corporate notes/bonds and U.S. Treasury and Agency securities are available for general corporate purposes.

As of April 30, 2024 and 2023, marketable securities of $254.4 million and $223.9 million, respectively, included equity securities of $219.9 million (net of gross unrealized gains of $27.0 million and gross unrealized losses of $1.2 million) and $187.8 million (net of gross unrealized gains of $9.5 million and gross unrealized losses of $8.7 million), respectively, and were held in trust for settlement of our obligations under certain deferred compensation plans, of which $202.5 million and $176.1 million, respectively, are classified as non-current. These marketable securities were held to satisfy vested obligations totaling $198.6 million and $172.2 million as of April 30, 2024 and 2023, respectively. Unvested obligations under the deferred compensation plans totaled $22.4 million and $21.9 million as of April 30, 2024 and 2023, respectively.

The net increase in our working capital of $77.2 million as of April 30, 2024 compared to April 30, 2023 is primarily attributable to an increase in cash and cash equivalents. The increase in cash and cash equivalents was primarily due to cash from operations, partially offset by payments of annual bonuses earned in fiscal 2023 and paid during the first quarter of fiscal 2024, purchase of property and equipment, dividends paid to shareholders and repurchases of common stock. Cash provided by operating activities was $284.0 million in fiscal 2024, a decrease of $59.9 million, compared to $343.9 million in fiscal 2023.

Cash used in investing activities was $53.8 million in fiscal 2024 compared to $323.5 million in fiscal 2023. The decrease in cash used in investing activities was primarily due to $254.8 million in cash paid for acquisitions in fiscal 2023 compared to no acquisition in fiscal 2024. Also contributing to a decrease in cash used in investing activities was a decrease in the purchase of property and equipment of $15.2 million and an increase of $11.9 million the amount received from our life insurance policies, partially offset by $12.1 million less in proceeds net of purchases in our marketable securities in fiscal 2024 compared to fiscal 2023.

Cash used in financing activities was $116.3 million in fiscal 2024 compared to $152.2 million in fiscal 2023. The decrease in cash used in financing activities was primarily due to decreases in repurchases of the Company's common stock and payments of tax withholdings on restricted stock of $42.3 million and $11.5 million, respectively in fiscal 2024 compared to fiscal 2023, partially offset by an increase of $21.4 million in dividends paid to shareholders.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements and have not entered into any transactions involving unconsolidated, special purpose entities.

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Contractual Obligations

Contractual obligations represent future cash commitments and liabilities under agreements with third parties and exclude contingent liabilities for which we cannot reasonably predict future payment. The following table represents our contractual obligations as of April 30, 2024:

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(1)See the corresponding Note in the accompanying consolidated financial statements in Item 15.

(2)Assumes COLI loans remain outstanding until receipt of death benefits on COLI policies and applies current interest rates on COLI loans ranging from 4.76% to 8.00% with total death benefits payable, net of loans under COLI contracts of $447.3 million at April 30, 2024.

(3)Interest on the Notes payable semi-annually in arrears on June 15 and December 15 of each year, commenced on June 15, 2020.

In addition to the contractual obligations above, we have liabilities related to certain employee benefit plans. These liabilities are recorded in our consolidated balance sheets. The obligations related to these employee benefit plans are described in Note 6—Deferred Compensation and Retirement Plans, in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K.

Lastly, we have contingent commitments under certain employment agreements that are payable upon involuntary termination without cause, as described in Note 17—Commitments and Contingencies, in the Notes to our Consolidated Financial Statements in this Annual Report on Form 10-K.

Cash Surrender Value of Company Owned Life Insurance Policies, Net of Loans

We purchased COLI policies or contracts insuring the lives of certain employees eligible to participate in the deferred compensation and pension plans as a means of funding benefits under such plans. As of April 30, 2024 and 2023, we held contracts with gross cash surrender value of $295.9 million and $275.1 million, respectively. Total outstanding borrowings against the CSV of COLI contracts were $77.0 million and $77.1 million as of April 30, 2024 and 2023, respectively. Such borrowings do not require annual principal repayments, bear interest primarily at variable rates and are secured by the CSV of COLI contracts. At April 30, 2024 and 2023, the net cash value of these policies was $219.0 million and $198.0 million, respectively. Total death benefits payable, net of loans under COLI contracts, were $447.3 million and $444.1 million at April 30, 2024 and 2023, respectively.

Other than the factors discussed in this section, we are not aware of any other trends, demands or commitments that would materially affect liquidity or those that relate to our resources as of April 30, 2024.

Accounting Developments

Recently Adopted Accounting Standards

In October 2021, the Financial Accounting Standard Board issued an amendment in accounting for contract assets and contract liabilities from contracts with customers, which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASC 606, Revenue from Contracts with Customers. The amendment of this standard became effective in fiscal years beginning after December 15, 2022 and is to be applied prospectively to business combinations that occur after the effective date. We adopted this guidance in our fiscal year beginning May 1, 2023 and the adoption of this guidance did not have a material impact on the consolidated financial statements.

Recent Accounting Standards - Not Yet Adopted

In November 2023, the Financial Accounting Standards Board issued an amendment in accounting update for all public entities that are required to report segment information in accordance with Topic 280, Segment Reporting. The amendment in this update improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense. The amendment in this update is effective for fiscal years beginning after December 15, 2023, and interim periods with fiscal years beginning after December 15, 2024. We will adopt this guidance in the fiscal year

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beginning May 1, 2024. The adoption of this guidance is not anticipated to have a material impact on the consolidated financial statements.

In December 2023, the Financial Accounting Standards Board issued an amendment in accounting update for income taxes disclosures. The new amendment provides improvements to income tax disclosures by requiring specific categories in the rate reconciliation and disaggregated information for income taxes paid. The amendment of this update is effective for annual periods beginning after December 15, 2024, and should be applied on a prospective basis. We will adopt this guidance in our fiscal year beginning May 1, 2025. The adoption of this guidance is not anticipated to have a material impact on the consolidated financial statements.