Korn Ferry ((KFY)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Korn Ferry’s recent earnings call painted a picture of strategic resilience and growth, despite facing challenges in certain regions. The sentiment was largely positive, with the company showcasing strong performance in Executive Search and regional growth in EMEA and APAC. However, a decline in the Americas region’s revenue and broader economic uncertainties were noted as potential hurdles. Overall, Korn Ferry appears to be effectively navigating the current economic landscape, leveraging growth in strategic areas to balance out existing challenges.
Strong Marquee & Diamond Accounts Performance
Marquee & Diamond accounts have been a significant contributor to Korn Ferry’s revenue, generating almost 40% of the total with a 7% fee revenue growth year-over-year. This strong performance underscores the company’s ability to maintain and grow its most valuable client relationships.
Executive Search Revenue Growth
The Executive Search segment continues to thrive, with fee revenue growing 8% in the quarter. This marks the fifth consecutive quarter of year-over-year growth, highlighting the sustained demand for Korn Ferry’s expertise in this area.
EMEA and APAC Regional Growth
Korn Ferry reported impressive regional growth, with EMEA fee revenue up 19% and APAC fee revenue up 12% year-over-year. This growth was seen across all solutions, indicating a robust and diversified regional strategy.
Digital Subscription Growth
The company’s digital subscription and licensed new business grew 10% year-over-year, now accounting for 39% of total digital new business. This growth reflects Korn Ferry’s successful pivot towards digital solutions and its ability to capture new market opportunities.
Overall Financial Performance
Korn Ferry’s consolidated fee revenue grew 5% year-over-year to $709 million. The adjusted EBITDA saw an 8% increase to $120 million, and adjusted diluted earnings per share rose 11% to $1.31, showcasing the company’s strong financial health.
Successful Launch of Talent Suite
The upcoming launch of the Talent Suite platform in November is expected to enhance client insights and decision-making through a SaaS platform. This initiative is part of Korn Ferry’s strategy to innovate and provide integrated solutions.
Americas Region Revenue Decline
The Americas region experienced a 2% decline in fee revenue year-over-year, primarily due to reduced demand in consulting, digital, and professional search and interim services. This highlights a challenge that Korn Ferry needs to address moving forward.
Uncertain Economic Environment
Global economic challenges, including unresolved tariff issues and inflation concerns, have led to cautious investment spending. Korn Ferry acknowledges these uncertainties as factors impacting their business outlook.
Conservative Q2 Revenue Guidance
Korn Ferry’s guidance for the second quarter of fiscal ’26 projects fee revenue between $690 million and $710 million, with an adjusted EBITDA margin of 17% to 17.5%. The company anticipates consolidated adjusted diluted earnings per share between $1.23 and $1.33. Despite economic uncertainties, Korn Ferry remains optimistic about its diverse and integrated solutions strategy, which has been a key driver of recent growth.
In conclusion, Korn Ferry’s earnings call reflects a company that is strategically positioned for growth, despite facing certain regional and economic challenges. The positive sentiment is driven by strong performances in Executive Search and regional markets like EMEA and APAC, alongside promising digital transformation efforts. As Korn Ferry continues to innovate and adapt, its commitment to operational excellence and strategic resilience remains evident.