Korn Ferry (KFY) Q1 2025 Earnings Report

Korn Ferry delivered a cautious yet constructive QQ1 2025 performance characterized by a resilient top line amid a highly uncertain macro backdrop and a continued focus on margin expansion and operating leverage. Revenue totaled $682.8 million, down 3.3% year-over-year on a reported basis (2% decline at constant currency, per management commentary), with adjusted EBITDA of $111.0 million and a margin of 16.5%. Management underscored disciplined cost management and productivity gains as the key drivers of profitability, marking the fifth consecutive quarter of EBITDA margin expansion. The quarter featured meaningful investments in talent and technology (gross hires of roughly 50 consultants) and a deliberate return of capital to shareholders ($43 million through dividends and buybacks). RPO and executive search showed relative strength within the mix, while professional search and interim faced more headwinds; Digital and Consulting continued to exhibit stable or improving trends, supported by higher average bill rates and ongoing IP-enabled offerings. The company guided for Q2 revenue of $655–$685 million and a wide adj EBITDA margin range of 6.3% to 16.7%, reflecting the ongoing mix-shift toward higher-value engagements and the durability of the revenue base in marquee accounts. Looking ahead, Korn Ferry reiterated five strategic pillars: go-to-market with marquee accounts, continued IP-driven innovation, brand leverage, selective M&A, and investment in people. Investors should watch for: (1) progression of large engagements (> $2.5 million) and their impact on utilization and backlog, (2) international expansion (notably EMEA) to monetize underpenetrated marquee and regional clients, (3) the evolution of RPO and executive search flows amid macro volatility, and (4) the trajectory of digital penetration within marquee accounts and the pace of new business awards.