Korn Ferry’s first quarter results were met with a positive market response, as the company delivered revenue and profit above Wall Street’s expectations. Management credited the quarter’s momentum to strong execution in executive search, where demand for leadership transitions remained robust despite ongoing economic headwinds. CEO Gary Burnison pointed to new client wins across industrial, semiconductor, and financial services sectors, emphasizing the firm’s ability to deliver multi-year, large-scale engagements. The company’s strategic focus on cross-solution selling also resulted in higher repeat business, with 77% of clients purchasing two or more solutions, which Burnison described as “a growth foundation for tomorrow.”
Is now the time to buy KFY? Find out in our full research report (it’s free).
Korn Ferry (KFY) Q1 CY2025 Highlights:
- Revenue: $719.8 million vs analyst estimates of $699 million (2.8% year-on-year growth, 3% beat)
- Adjusted EPS: $1.32 vs analyst estimates of $1.26 (4.7% beat)
- Adjusted EBITDA: $121.1 million vs analyst estimates of $116.8 million (16.8% margin, 3.7% beat)
- Revenue Guidance for Q2 CY2025 is $685 million at the midpoint, below analyst estimates of $691.8 million
- Adjusted EPS guidance for Q2 CY2025 is $1.22 at the midpoint, above analyst estimates of $1.21
- Operating Margin: 14.5%, up from 11.9% in the same quarter last year
- Market Capitalization: $3.84 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 Korn Ferry’s Q1 Earnings Call
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Trevor Romeo (William Blair) asked about trends in new business and monthly revenue patterns. CEO Gary Burnison shared that May was stronger than April, but cautioned that business conversations “ebb and flow” amid macro uncertainty.
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George Tong (Goldman Sachs) inquired about differences in client spending and sales cycles across segments. Burnison highlighted a cost of living crisis impacting U.S. companies, with widespread cost-cutting and slower growth, while digital business remained consistent.
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Mark Marcon (Baird) probed the impact of the latest TalentSuite release on user experience and digital growth. Burnison emphasized improved platform seamlessness and anticipated future integration with major CRM providers.
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Tobey Sommer (Truist) questioned the impact of declining employee turnover on market dynamism. Burnison noted historically low U.S. turnover rates and described labor market conditions as “anemic,” with limited job mobility.
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Josh Chan (UBS) asked whether executive search growth was likely to continue at a similar pace. CFO Bob Rozek confirmed that ongoing growth in executive search is anticipated in upcoming quarters, though precise forecasts are not provided for individual segments.
Catalysts in Upcoming Quarters
As we look to upcoming quarters, the StockStory team will monitor (1) adoption rates and monetization progress for the TalentSuite digital platform, (2) the pace of multi-year consulting engagement wins and their impact on revenue stability, and (3) the company’s ability to navigate macroeconomic headwinds, including labor market dynamics and corporate cost pressures. Progress in cross-selling and international expansion will also be key signposts for sustained growth.
Korn Ferry currently trades at $73.92, up from $66.71 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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