Organizational consulting firm Korn Ferry (NYSE: KFY) announced better-than-expected revenue in Q2 CY2026, with sales up 6.9% year on year to $764.6 million. On top of that, next quarter’s revenue guidance ($869 million at the midpoint) was surprisingly good and 15.9% above what analysts were expecting. Its non-GAAP profit of $1.43 per share was 5% above analysts’ consensus estimates.

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Company Overview

With clients including 97% of the S&P 100 and operations in 103 offices across 51 countries, Korn Ferry (NYSE: KFY) is a global consulting firm that helps organizations design optimal structures, recruit talent, develop leaders, and create effective compensation strategies.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $2.99 billion in revenue over the past 12 months, Korn Ferry is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, Korn Ferry’s sales grew at a solid 7.7% compounded annual growth rate over the last five years. This is an encouraging starting point for our analysis because it shows Korn Ferry’s demand was higher than many business services companies.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Korn Ferry’s recent performance shows its demand has slowed as its annualized revenue growth of 3.8% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

This quarter, Korn Ferry reported year-on-year revenue growth of 6.9%, and its $764.6 million of revenue exceeded Wall Street’s estimates by 2.3%. Company management is currently guiding for a 19.1% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 2.9% over the next 12 months, similar to its two-year rate. This projection doesn’t excite us and indicates its newer products and services will not catalyze better top-line performance yet. At least the company is tracking well in other measures of financial health.

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Adjusted Operating Margin

Adjusted operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. It also removes various one-time costs to paint a better picture of normalized profits.

Korn Ferry has managed its cost base well over the last five years. It demonstrated solid profitability for a business services business, producing an average adjusted operating margin of 13.3%.

Analyzing the trend in its profitability, Korn Ferry’s adjusted operating margin decreased by 5.7 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Korn Ferry generated an adjusted operating margin profit margin of 12.2%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Korn Ferry’s unimpressive 5.9% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Although it wasn’t great, Korn Ferry’s two-year annual EPS growth of 9.9% topped its 3.8% two-year revenue growth.

We can take a deeper look into Korn Ferry’s earnings to better understand the drivers of its performance. A two-year view shows that Korn Ferry has repurchased its stock, shrinking its share count by 2.7%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

In Q2, Korn Ferry reported adjusted EPS of $1.43, up from $1.31 in the same quarter last year. This print beat analysts’ estimates by 5%. Over the next 12 months, Wall Street expects Korn Ferry’s full-year EPS to grow 16.2% from $5.44 to $6.32.

Key Takeaways from Korn Ferry’s Q2 Results

We were impressed by Korn Ferry’s optimistic revenue guidance for next quarter, which blew past analysts’ expectations. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed. Overall, this print had some key positives. The stock traded up 2.2% to $83.82 immediately following the results.

Sure, Korn Ferry had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).