Korn Ferry’s third quarter results were well received by investors, as the company outperformed Wall Street’s revenue and profit expectations. Management credited the ongoing success of its “We Are Korn Ferry” strategy, which emphasizes cross-solution integration and deeper client relationships. CEO Gary Burnison highlighted that business referrals reached nearly 28% of consolidated fee revenue, reflecting increased collaboration across teams. The executive search and professional search segments saw notable momentum, with Burnison pointing to demographic shifts—like the retirement of experienced leaders and evolving work-life preferences—as key factors supporting demand. Management also cited the expansion of interim and RPO (Recruitment Process Outsourcing) solutions, especially in EMEA, as further evidence of the strategy’s effectiveness.
Is now the time to buy KFY? Find out in our full research report (it’s free for active Edge members).
Korn Ferry (KFY) Q3 CY2025 Highlights:
- Revenue: $729.8 million vs analyst estimates of $717.4 million (7% year-on-year growth, 1.7% beat)
- Adjusted EPS: $1.33 vs analyst estimates of $1.31 (1.4% beat)
- Adjusted EBITDA: $124.8 million vs analyst estimates of $122.4 million (17.1% margin, 2% beat)
- Revenue Guidance for Q4 CY2025 is $687 million at the midpoint, below analyst estimates of $696.7 million
- Adjusted EPS guidance for Q4 CY2025 is $1.22 at the midpoint, below analyst estimates of $1.24
- Operating Margin: 13.5%, in line with the same quarter last year
- Market Capitalization: $3.59 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 Q3 Earnings Call
- Joshua Chan (UBS) asked about sustained strength in Executive Search despite a slower job market. CEO Gary Burnison attributed it to demographic trends and evolving leadership needs, emphasizing the impact of retirements and shifting executive priorities.
- Trevor Romeo (William Blair) inquired whether improvement in placement solutions was due to increased client hiring or cross-selling. Burnison confirmed cross-selling and integration were primary drivers, with only modest changes in client willingness to hire.
- Trevor Romeo (William Blair) also questioned consulting bill rate dynamics and AI’s impact on pricing. Burnison explained that higher bill rates stem from more strategic, larger engagements, while CFO Robert Rozek added that demand for organizational transformation supports this trend.
- Unknown Analyst (Goldman Sachs) pressed on whether strong new business could offset usual third-quarter seasonality. Burnison noted guidance already accounts for expected holiday-related slowdowns, with no major deviation from historical trends assumed.
- Tobey Sommer (Truist) asked about the efficiency gains from AI tools in Search. Burnison and Rozek detailed that while AI improves candidate sourcing, the Search process remains high-touch, with technology adoption more pronounced in RPO.
Catalysts in Upcoming Quarters
The StockStory team will be watching (1) the pace of enterprise adoption for the new Talent Suite platform, (2) whether business referrals and cross-solution selling continue to expand, and (3) the timing and scale of large digital and consulting wins that were delayed into the current quarter. We will also track regulatory developments in pay transparency and Korn Ferry’s ability to capture related opportunities, especially in Europe.
Korn Ferry currently trades at $68.83, up from $64.97 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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