Korn Ferry (NYSE:KFY) Tops Q1 Earnings and Revenue Estimates

Korn Ferry (NYSE:KFY) reported first-quarter fiscal 2026 results that surpassed analyst expectations, with both revenue and adjusted earnings per share exceeding consensus estimates. The global consulting firm posted fee revenue of $708.6 million, representing a 5% year-over-year increase, while adjusted diluted earnings per share came in at $1.31.

Financial Performance Versus Estimates

The company's quarterly performance demonstrated solid execution against market expectations:

• Revenue: Actual revenue of $708.6 million exceeded the analyst consensus estimate of $694.4 million.
• Adjusted EPS: The reported adjusted EPS of $1.31 surpassed the estimated $1.25.
• Net Income: Net income attributable to Korn Ferry was $66.6 million, compared to $62.6 million in the prior-year period.

This top and bottom-line beat was primarily driven by increased fee revenue across most of its business segments, reflecting what CEO Gary Burnison described as a "sophisticated, holistic approach" to solving client challenges.

Market Reaction and Price Action

Despite the earnings beat, the market reaction has been mixed. The stock has experienced a slight decline in after-market and recent trading sessions. This suggests that while the reported numbers were strong, investor sentiment may be influenced by broader market conditions, the company's forward-looking guidance, or a "sell the news" reaction after potential pre-earnings optimism.

Business Segment Performance

The company's diversified portfolio showed varied but generally positive results:

• Executive Search was a standout, with fee revenue increasing 8% to $224.3 million, driven by a higher number of engagements billed.
• Professional Search & Interim saw a 10% increase in fee revenue to $133.9 million, bolstered by a recent acquisition.
• Consulting revenue grew modestly by 1% to $170.0 million, though adjusted EBITDA margin in this segment contracted slightly.
• Digital and RPO segments also posted modest revenue increases of 1% and 3%, respectively.

Forward Outlook and Analyst Comparison

Management provided guidance for the second quarter of fiscal 2026. The company expects fee revenue to be between $690 million and $710 million. This range brackets the current analyst consensus estimate of approximately $701.5 million, indicating expectations are generally in line with market projections.

For earnings, Korn Ferry anticipates adjusted diluted EPS to be in the range of $1.23 to $1.33 for Q2. The midpoint of this guidance, $1.28, sits slightly above the provided analyst estimate of $1.28 for the next quarter, suggesting cautious optimism from management.

Conclusion

Korn Ferry delivered a strong quarter, exceeding analyst expectations for both sales and profit. The positive results were broad-based, led by strength in Executive Search. The company's guidance for the next quarter appears to be cautiously optimistic, aligning closely with current market estimates. Investors will be watching closely to see if the company can maintain this momentum in what CEO Burnison referred to as a "choppy" labor and economic environment.

For a more detailed breakdown of historical earnings and future analyst estimates, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, nor is it a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.