Organizational consulting firm Korn Ferry (NYSE: KFY) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 4.8% year on year to $715.5 million. On the other hand, next quarter’s revenue guidance of $700 million was less impressive, coming in 0.8% below analysts’ estimates. Its non-GAAP profit of $1.31 per share was 6% above analysts’ consensus estimates.

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“I am pleased with our company’s performance. When looking at our results over the last few quarters—even amid all of the choppiness that has encircled the labor and economic environment—it’s clear that our strategy is working,” said Gary D. Burnison, CEO, Korn Ferry.

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 experience short-term success, but top-performing ones enjoy sustained growth for years.

With $2.79 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 8.9% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.

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 marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 1.3% over the last two years.

This quarter, Korn Ferry reported modest year-on-year revenue growth of 4.8% but beat Wall Street’s estimates by 2.5%. Company management is currently guiding for a 2.6% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 2% over the next 12 months. While this projection implies its newer products and services will fuel better top-line performance, it is still below the sector average.

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Operating Margin

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 operating margin of 12.3%.

Analyzing the trend in its profitability, Korn Ferry’s operating margin decreased by 1.9 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.

In Q2, Korn Ferry generated an operating margin profit margin of 11.7%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Korn Ferry’s EPS grew at an astounding 20.6% compounded annual growth rate over the last five years, higher than its 8.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of Korn Ferry’s earnings can give us a better understanding of its performance. A five-year view shows that Korn Ferry has repurchased its stock, shrinking its share count by 1.7%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Korn Ferry, its two-year annual EPS growth of 6.4% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q2, Korn Ferry reported adjusted EPS of $1.31, up from $1.20 in the same quarter last year. This print beat analysts’ estimates by 6%. Over the next 12 months, Wall Street expects Korn Ferry’s full-year EPS of $5.03 to grow 3.2%.

Key Takeaways from Korn Ferry’s Q2 Results

It was encouraging to see Korn Ferry beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter slightly missed, but the market seems to be willing to forgive this. The stock traded up 5.6% to $76.59 immediately following the results.

So should you invest in Korn Ferry right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.