Korn Ferry Reports Q2 Fiscal 2025 Results with Revenue Decline but Profitability Turnaround

Korn Ferry reported its financial results for the second quarter of fiscal year 2025, revealing a fee revenue of $674.4 million, a decrease of 4% from $704.0 million in the same quarter last year. The company's total revenue for the quarter was $681.9 million, down from $712.4 million year-over-year. Despite the decline in revenue, Korn Ferry achieved a significant turnaround in profitability, posting a net income of $60.8 million compared to a net loss of $1.7 million in the prior year. This improvement was largely attributed to a reduction in restructuring charges, which fell from $63.5 million to $0.6 million.

In terms of operational metrics, Korn Ferry's compensation and benefits expenses decreased by 4% to $437.4 million, driven by an 8% reduction in average headcount. The company also reported a notable increase in operating income, which rose to $87.5 million from $22.8 million a year earlier. Adjusted EBITDA for the quarter was $117.0 million, reflecting a 19% increase from $98.5 million in the previous year, with an adjusted EBITDA margin of 17.4%, up from 14.0%.

Strategically, Korn Ferry completed the acquisition of Trilogy International on November 1, 2024, a move aimed at enhancing its Professional Search & Interim segment. This acquisition is expected to bolster Korn Ferry's capabilities in providing digital interim talent solutions across Europe and the United States. The company continues to focus on integrating its service offerings to better address client needs, leveraging its diverse portfolio of solutions in organizational consulting.

Geographically, the Executive Search segment showed mixed results, with North America reporting a slight decline in fee revenue, while EMEA and Asia Pacific experienced growth. The Professional Search & Interim segment, however, saw a significant decline in fee revenue, down 13% year-over-year, primarily due to reduced demand in the current economic environment. Korn Ferry's overall employee headcount has decreased, reflecting its ongoing efforts to align its workforce with market conditions.

Looking ahead, Korn Ferry remains cautiously optimistic about its growth prospects, despite the current economic uncertainties. The company plans to continue investing in its core solutions and expanding its market presence, particularly through strategic acquisitions and enhanced service offerings. Korn Ferry's management emphasized the importance of adapting to changing market dynamics and maintaining a strong focus on client engagement to drive future performance.