Korn Ferry (KFY) Q2 2025 earnings summary

Executive summary

• Achieved sixth consecutive quarter of profitability improvement, with adjusted EBITDA margin above 17% and strong cost management and productivity gains across all business lines.

• Fee revenue for Q2 FY'25 was $674.4 million, down 4% year-over-year and flat sequentially, reflecting industry-wide trends and client-driven delivery delays.

• Adjusted EBITDA grew 19% year-over-year to $117 million, with margin expanding to 17.4% from 14% a year ago.

• Adjusted fully diluted EPS was $1.21, up 25% year-over-year; GAAP EPS was $1.14.

• Completed acquisition of Trilogy International, expanding interim professional offerings in EMEA and North America.

Financial highlights

• Consolidated fee revenue for Q2 FY'25 was $674.4 million, down 4% year-over-year; operating margin rose to 13.0% from 3.2% a year ago.

• Adjusted EBITDA margin increased to 17.4% from 14.0% year-over-year.

• Net income attributable to the company was $60.8 million, with adjusted net income up 27% year-over-year to $64.7 million.

• Investable cash at quarter-end was $537 million, up 16% year-over-year.

• $33 million in stock repurchases and $0.37 per share dividend paid in Q2.

Outlook and guidance

• Q3 FY'25 fee revenue expected between $635 million and $665 million, reflecting seasonality and fewer working days.

• Adjusted EBITDA margin guidance of 16.5%-17.3%; adjusted diluted EPS expected between $1.06-$1.18.

• Trilogy acquisition expected to contribute $14-$15 million in Q3 revenue.

• Management expects continued relevance and growth opportunities for integrated solutions despite economic uncertainty.