Korn Ferry ((KFY)) has held its Q2 earnings call. Read on for the main highlights of the call.
Claim 50% Off TipRanks Premium and Invest with Confidence
- Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential
Korn Ferry’s latest earnings call exuded a positive sentiment, showcasing robust financial performance and growth in key segments such as RPO and Executive Search. The company successfully implemented strategic initiatives, although challenges remain in the APAC region and digital business segment, highlighting areas for potential improvement.
Strong Overall Financial Performance
Korn Ferry reported a solid financial performance with a 7% year-over-year increase in consolidated fee revenue, reaching $722 million. The adjusted EBITDA also grew by 7% to $125 million, while adjusted diluted earnings per share rose by 10% to $1.33. These figures underscore the company’s strong financial health and operational efficiency.
RPO Business Success
The RPO segment demonstrated significant success, with estimated remaining fees under existing contracts climbing to $1.84 billion, a 20% increase year-over-year. The quarter saw $253 million in new business, driven largely by renewals, which accounted for 84% of the total, while new logos contributed 16%.
Growth in Executive Search and Professional Search
Executive Search continued its upward trajectory with a 10% increase in fee revenue, marking the sixth consecutive quarter of growth. Professional Search and interim fee revenue also experienced a 17% year-over-year rise, reflecting the strength of Korn Ferry’s search services.
Expansion in EMEA
The EMEA region showed impressive growth, with fee revenue increasing by 20% year-over-year. This growth was driven by strong performances in Executive Search, Professional Search, interim consulting, and digital services, highlighting the region’s strategic importance.
Successful Strategy Implementation
Korn Ferry’s strategic initiatives bore fruit, with business referrals rising to 27.6% of consolidated fee revenue, an increase of approximately 250 basis points year-over-year. This growth is attributed to the “We Are Korn Ferry” go-to-market strategy, which has enhanced cross-solution referrals.
Flat Revenue in APAC
In contrast, the APAC region saw flat fee revenue, with moderate growth in Executive and Professional Search offset by declines in RPO consulting and digital services. This highlights a need for strategic adjustments to boost performance in the region.
Challenges in Digital Business
The digital business segment faced challenges, with a decline attributed to strategic pivots and delays in closing large transformational deals. This area presents an opportunity for Korn Ferry to refine its strategy and improve outcomes.
Forward-Looking Guidance
Korn Ferry provided optimistic guidance for the future, forecasting continued positive momentum across its business segments. For the third quarter of fiscal 2026, the company anticipates fee revenue between $680 million and $694 million, with an adjusted EBITDA margin of approximately 17.2% to 17.4% and adjusted diluted EPS ranging from $1.19 to $1.25. The “We Are Korn Ferry” strategy is expected to continue driving resilience and growth.
In summary, Korn Ferry’s earnings call reflects a positive outlook with strong financial performance and strategic growth in key areas. Despite challenges in the APAC region and digital business, the company’s strategic initiatives and forward-looking guidance suggest a promising future.