Korn Ferry Earnings Up In Q2; Guides Q3

Korn Ferry reported robust fiscal Q2 results with net income attributable to the company rising to $72.4 million from $60.8 million year-over-year (GAAP EPS $1.36 vs $1.14), adjusted net income of $70.5 million (adjusted EPS $1.33 vs $1.21), revenue of $729.8 million (up from $681.96 million), adjusted EBITDA of $124.82 million and operating income of $98.76 million. Management guided fiscal Q3 fee revenue of $680–694 million, GAAP EPS of $1.15–1.21 and adjusted EPS of $1.19–1.25, and the stock was trading about 0.9% lower in pre-market trade, with the results and guidance together setting near-term expectations for continued but measured growth in consulting demand.

Analysis

Korn Ferry reported second-quarter results showing net income attributable to the company increased to $72.40 million from $60.80 million year-over-year and GAAP EPS rose to $1.36 from $1.14; adjusted net income increased to $70.50 million from $64.69 million with adjusted EPS of $1.33 versus $1.21. Revenue grew to $729.80 million from $681.96 million, roughly a 7% year-over-year increase, reflecting top-line expansion alongside higher profitability.

Adjusted EBITDA rose to $124.82 million from $117.03 million and operating income jumped to $98.76 million from $87.48 million, indicating operating leverage as operating income expanded faster than revenue. Margin improvement on these figures suggests the firm is converting incremental revenue to profit more effectively this quarter.

Management guided third-quarter fiscal 2026 fee revenue to $680 million–$694 million and set GAAP EPS guidance of $1.15–$1.21 (adjusted EPS $1.19–$1.25), a midpoint that implies a sequential decline versus Q2 adjusted EPS of $1.33 and signals measured near-term deceleration. The stock traded down roughly 0.88% pre-market to $64.43, reflecting a muted market reaction and the primary near-term risk being execution against the stated Q3 guidance.

Key Decisions for Investors

• Consider maintaining or modestly increasing exposure to KFY given the Q2 beat and margin expansion, but size positions conservatively because Q3 guidance implies sequential EPS deceleration
• Watch Q3 fee revenue and adjusted EPS relative to the $680–$694 million and $1.19–$1.25 guidance ranges as the key catalysts; if results miss guidance, be prepared to reduce exposure
• For material positions, consider short-duration downside protection (e.g., protective puts or collars) into the quarter to hedge execution risk and the possibility of an earnings miss