Korn Ferry’s stock jumped 13% on June 18 after the company announced better-than-expected fourth-quarter and full-year fiscal 2025 financial results. The consulting firm’s growth was mainly driven by higher fees, particularly in its executive search business.
Fourth Quarter Fiscal 2025 Highlights
Revenue and Earnings: Korn Ferry posted adjusted earnings per share (EPS) of $1.32, beating the $1.26 consensus estimate. Total revenue rose 3% year-over-year to $719.8 million, surpassing the expected $699 million. Fee revenue increased 3% to $712 million, driven by a 14% jump in executive search revenue to $227 million.
Profitability: Net income attributable to Korn Ferry was $64.2 million, with a margin of 9.0%, slightly down 40 basis points from the prior year due to tax benefits recorded in the previous quarter. Adjusted EBITDA rose to $121.1 million, with a margin of 17.0%, up 70 basis points from the year-ago quarter, reflecting disciplined cost management and higher fee revenue.
Business Segments: The growth in fee revenue was supported by gains in executive search and recruitment process outsourcing (RPO), partially offset by a decline in consulting fees.
Full-Year Fiscal 2025 Performance
Korn Ferry reported full-year fee revenue of $2.73 billion, down 1% year-over-year. Despite this slight decline in revenue, net income rose significantly to $246.1 million, with a margin improvement of 290 basis points to 9.0%. Adjusted EBITDA increased to $463.9 million, with a margin of 17.0%, up 220 basis points compared to fiscal 2024.
The company maintained a balanced capital allocation strategy, investing $44 million in acquisitions, $62 million in technology and product enhancements, and returning $173 million to shareholders through $89 million in share repurchases and $84 million in dividends.
Outlook and Market Reaction
For the current quarter, Korn Ferry expects adjusted EPS between $1.18 and $1.26, and fee revenue ranging from $675 million to $695 million. These projections are close to analysts’ estimates of $1.21 EPS and $682.7 million in fee revenue.
CEO Gary Burnison noted that Korn Ferry continues to meet its financial and strategic goals despite “ever-changing global economic and political dynamics”.
Following the strong earnings report, Korn Ferry’s stock moved into positive territory for 2025, recovering from a slight year-to-date decline and outperforming the S&P 500’s modest gains earlier in the year.
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