Korn Ferry Posts Fiscal Q2 Revenue Decrease of Four Percent

December 5, 2024 – Korn Ferry (NYSE:KFY) has posted 2025 fiscal first quarter revenues of $674.4, a decrease of four percent from the same period a year ago. The decrease in fee revenue was primarily due to lower fee revenues in professional search & interim and consulting driven by a decline in demand due to the current economic environment, partially offset by an increase in executive search fee revenue. The Los Angeles-headquartered executive recruiter and leadership consultant – the largest globally and in the Americas as ranked by Hunt Scanlon Media –  recorded net income of $60.8 million, compared to net loss attributable to Korn Ferry of $1.7 million in Q2 fiscal year 2024.

Operating income, operating margin, and net income attributable to Korn Ferry increased as a result of decreases in restructuring charges, net, integration/acquisition costs, disciplined cost management, and lower cost of services expense compared to the year-ago quarter.

“I am pleased with our second quarter results, as we generated $674 million in fee revenue,” said Gary D. Burnison, CEO of Korn Ferry. “Earnings and profitability increased year over year and sequentially as we delivered $117 million of Adjusted EBITDA, at a 17.4 percent margin, which is our sixth consecutive quarter of profitability improvement.

“Overall, our execution has been solid,” Mr. Burnison said. “The durability and potential of our business were evident once again during the quarter with stability in our talent acquisition fee revenues and new business, digital new business trends improving and steady performance in consulting. We also continue to invest for the future, as evidenced by the launch of the Korn Ferry talent suite, which brings together our assessment, development, talent management, and total rewards solutions, allowing our clients to license our decades of expertise, proprietary insights and data-driven intelligence via a subscription-based model. Additionally, our recent Trilogy International investment expands our interim professional offerings to EMEA, which is a substantial addressable market opportunity.”

Recent Acquisition and Alliance

In November, Korn Ferry closed its acquisition of U.K.-based Trilogy International. Terms of the deal were not disclosed. The acquisition is expected to be immediately accretive to Korn Ferry’s adjusted earnings. “We’re pleased to have Trilogy join Korn Ferry,” said Mr. Burnison. “Trilogy operates at the forefront of change, in a large addressable market. The company’s highly relevant digital interim professional offerings, combined with a broad EMEA footprint, will be a great fit for Korn Ferry and our clients.” Headquartered in London, Trilogy is a provider of digital interim talent across EMEA and in the United States. “Through the combination with Trilogy, Korn Ferry’s professional search & interim business will extend its ability to scale its solutions at the intersection of talent, transformation and strategy,” the firm said.

Related: Korn Ferry Expands Interim Talent Operations into France

“Trilogy is known as the technologist’s recruiter – bringing to our clients a bespoke, consultative, high-touch approach,” said Ivan Jackson, co-founder and managing director of Trilogy. “Our success is grounded in delivering the right talent with the right knowledge and technology skills to drive business value and transformation. We’re excited to start a new journey with Korn Ferry and tap into the firm’s global network of colleagues, expansive client relationships and in-depth IP and digital expertise. We look forward to the opportunity ahead.”

Korn Ferry Appoints Senior Leaders

Korn Ferry has named Jeanne MacDonald as chief executive officer, Recruitment Process Outsourcing (RPO) and Mathias Herzog will assume leadership of the firm’s digital solution. “Jeanne and Mathias are proven executives, and we are thrilled to have people of their caliber lead these offerings,” said Gary D. Burnison, CEO of Korn Ferry. “Jeanne is the natural choice to lead RPO after years of overseeing global RPO solutions and playing a fundamental role in the business’s commercial and financial success. Mathias brings in-depth consulting and technology expertise that will help further the digitization of our offerings and intellectual property to drive superior client performance. With Jeanne and Mathias, we are confident that our RPO and digital solutions will continue to evolve and thrive.”

Ms. MacDonald joined Korn Ferry in 1998 and most recently served as president, global RPO Solutions, where she was responsible for oversight of Korn Ferry’s RPO businesses. She has worked in a variety of roles at Korn Ferry including senior recruiter, business development director for North America prior to moving into various leadership positions within the firm.

Korn Ferry also recently formed a partnership with Yoodli to provide professionals with private and real-time communication coaching using artificial intelligence (AI). “We’re pleased to partner with Yoodli to help professionals upskill themselves at their own pace,” said Bryan Ackermann, head of AI strategy and transformation, Korn Ferry. “Communication skills are one of the consistent enablers of professional success—from promotion conversations to boardroom presentations. This partnership lies at the heart of our strategy to bring cutting-edge generative AI and personalized coaching to our partners worldwide.”

Yoodli, a Seattle, WA-based company, helps individuals improve their communications skills using AI. Users can get coaching during online meetings, or they can practice for an upcoming speech, conversation, or interview with AI. Yoodli will then generate feedback on their content, conciseness and speaking attributes such as their executive presence, reliance on filler words, and pacing. Yoodli has been rolled out in more than 150 countries by Toastmasters International, business schools, and hundreds of thousands of leaders globally.

Outlook

Assuming worldwide geopolitical conditions, economic conditions, financial markets and foreign exchange rates remain steady, on a consolidated basis Korn Ferry expects third quarter fee revenue to be in the range of $635 million and $665 million; and diluted earnings per share to range between $1.02 to $1.16. On a consolidated adjusted basis Korn Ferry is anticipating third quarter adjusted diluted earnings per share to be in the range from $1.06 to $1.18.

Korn/Ferry shares have added about 32.5 percent since the beginning of the year versus the S&P 500’s gain of 27.6 percent. Shares of Korn Ferry have returned -0.9 percent over the past month versus the Zacks S&P 500 composite’s +6.7 percent change.

Related: Korn Ferry Closes Acquisition of Salo

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor  – Hunt Scanlon Media