Story Stocks^®

Korn/Ferry (KFY) is trading higher following its Q4 (Apr) report this morning. The company modestly exceeded EPS expectations, while fee revenue increased 6.7% yr/yr to $759.8 mln, also coming in above expectations. For Q1, KFY guided EPS to $1.32-1.38 and fee revenue to $725-745 mln, falling in line with expectations. The respective midpoints of $1.35 and $735 mln are slightly above expectations.

• Segment performance: Growth was broad across four of KFY's five solutions. Professional Search & Interim led, increasing 14% to $149.1 mln, while Executive Search and Consulting each grew 7% and RPO increased 5%. Digital was the outlier, declining 3%, although subscription and license revenue increased 10%.
• Growth drivers: Executive Search growth was driven by higher average fees and more senior-level work, as the number of new assignments was essentially flat. Professional Search & Interim also benefited from double-digit growth in permanent-placement and interim new business.
• Backlog and visibility: KFY ended Q4 with $1.88 bln in estimated remaining fees under existing contracts, up 10% yr/yr and slightly from $1.85 bln in Q3, with $1.06 bln expected over the next 12 months. However, new business growth moderated sequentially to 2% excluding RPO from 11% in Q3.
• Margins: Adjusted EBITDA increased 7% to $129.5 mln, but the 17.0% margin was flat yr/yr and slightly below KFY's prior 17.1-17.3% outlook. Higher compensation and service costs limited consolidated margin expansion, despite stronger margins in Executive Search and Professional Search & Interim.

Briefing.com Analyst Insight

This was a solid close to FY26, with Q4 results reinforcing the benefits of KFY's broader talent and organizational consulting model. Four of its five solutions posted growth despite a challenging hiring backdrop, led by Professional Search & Interim, while Executive Search remained resilient on higher average fees and a greater mix of senior-level assignments. Backlog also provides solid visibility, with estimated remaining fees up 10% yr/yr and more than $1.0 bln expected to convert over the next 12 months. However, new-business growth slowed sequentially, Digital revenue declined, and the consolidated adjusted EBITDA margin remained flat. The Q1 outlook points to continued growth, but not a sharp acceleration. Overall, the report supports KFY's diversification strategy, though stronger new-business momentum may be needed to drive a more sustained move in the shares.