Korn Ferry’s second quarter results were well received by the market, supported by broad-based growth across its business solutions and positive momentum in key geographies. Management attributed performance to the company’s ongoing diversification strategy, citing increased demand for integrated, multi-solution engagements—particularly with large, global clients. CEO Gary Burnison highlighted wins with clients in the pharmaceutical, retail, and HR software sectors, emphasizing Korn Ferry’s ability to deliver both consulting expertise and digital solutions. The company’s focus on cross-solution referrals and expansion of marquee accounts contributed to resilience amidst lingering economic uncertainty.
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Korn Ferry (KFY) Q2 CY2025 Highlights:
- Revenue: $715.5 million vs analyst estimates of $698.1 million (4.8% year-on-year growth, 2.5% beat)
- Adjusted EPS: $1.31 vs analyst estimates of $1.24 (6% beat)
- Adjusted EBITDA: $120.4 million vs analyst estimates of $117.4 million (16.8% margin, 2.5% beat)
- Revenue Guidance for Q3 CY2025 is $700 million at the midpoint, below analyst estimates of $705.8 million
- Adjusted EPS guidance for Q3 CY2025 is $1.28 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 11.7%, in line with the same quarter last year
- Market Capitalization: $3.79 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Korn Ferry’s Q2 Earnings Call
- Trevor Romeo (William Blair) asked about milestones for the Talent Suite launch and the timeline for realizing benefits. CEO Gary Burnison responded that substantial benefits are expected by late 2026, with initial focus on key partnerships and consultant training.
- Tobey Sommer (Truist) inquired about client sentiment and economic caution. Burnison noted optimism in Europe and Asia, but described the U.S. market as challenged by lack of pricing power and labor cost inflation, with clients favoring natural attrition over layoffs.
- George Tong (Goldman Sachs) (question by Sami) asked about consulting new business and headcount reductions in digital. Burnison explained the shift toward larger, integrated engagements and clarified that workforce adjustments align with firm-wide delivery needs, not just segment-specific demand.
- Joshua Chan (UBS) questioned why executive search in North America is outperforming. Burnison attributed this to demographic changes, evolving C-suite requirements, and post-pandemic leadership transitions.
- Mark Marcon (Baird) pressed on AI’s impact on client labor demand and Korn Ferry’s internal AI investments. Burnison and Rozek outlined investments in a centralized AI team, emphasizing AI’s dual role in driving efficiency and meeting future client workforce needs.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the adoption pace and client feedback for the Talent Suite platform following its November launch, (2) regional performance divergence, especially whether EMEA and APAC can sustain momentum as U.S. demand remains soft, and (3) evidence of AI-driven productivity gains and their impact on both Korn Ferry’s internal operations and client solutions. Progress on large, integrated client engagements and continued expansion in digital subscriptions will also be key markers.
Korn Ferry currently trades at $71.90, in line with $72.55 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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