Organizational consulting firm Korn Ferry (NYSE: KFY) reported Q1 CY2026 results topping the market’s revenue expectations, with sales up 6.7% year on year to $768.3 million. On the other hand, next quarter’s revenue guidance of $735 million was less impressive, coming in 1.3% below analysts’ estimates. Its GAAP profit of $1.39 per share was 1.4% above analysts’ consensus estimates.

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“I am very pleased with our quarterly performance. This marks our fifth consecutive quarter of top-line growth, underscoring the strength of our strategy and the increasing relevance of our solutions – all amid an uneven economic environment,” said Gary D. Burnison, CEO, Korn Ferry.

Company Overview

With clients including 97% of the S&P 100 and operations in 103 offices across 51 countries, Korn Ferry (NYSE: KFY) is a global consulting firm that helps organizations design optimal structures, recruit talent, develop leaders, and create effective compensation strategies.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $2.94 billion in revenue over the past 12 months, Korn Ferry is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, Korn Ferry’s sales grew at an impressive 10.1% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Korn Ferry’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 2.5% over the last two years was well below its five-year trend.

This quarter, Korn Ferry reported year-on-year revenue growth of 6.7%, and its $768.3 million of revenue exceeded Wall Street’s estimates by 1.7%. Company management is currently guiding for a 2.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 3.1% over the next 12 months, similar to its two-year rate. This projection doesn’t excite us and indicates its newer products and services will not lead to better top-line performance yet.

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Adjusted Operating Margin

Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals.

Korn Ferry has managed its cost base well over the last five years. It demonstrated solid profitability for a business services business, producing an average adjusted operating margin of 13.6%.

Analyzing the trend in its profitability, Korn Ferry’s adjusted operating margin decreased by 6 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q1, Korn Ferry generated an adjusted operating margin profit margin of 13.2%, down 2.2 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Korn Ferry’s EPS grew at 19.7% compounded annual growth rate over the last five years, higher than its 10.1% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its adjusted operating margin didn’t improve.

We can take a deeper look into Korn Ferry’s earnings quality to better understand the drivers of its performance. A five-year view shows that Korn Ferry has repurchased its stock, shrinking its share count by 2.5%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Korn Ferry, its two-year annual EPS growth of 26.6% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q1, Korn Ferry reported EPS of $1.39, up from $1.22 in the same quarter last year. This print beat analysts’ estimates by 1.4%. Over the next 12 months, Wall Street expects Korn Ferry’s full-year EPS to grow 4.6% from $5.29 to $5.53.

Key Takeaways from Korn Ferry’s Q1 Results

We enjoyed seeing Korn Ferry beat analysts’ revenue and EPS this quarter. We also liked that the company's EPS guidance for next quarter exceeded expectations as well. Overall, this print had some key positives. The stock traded up 1.1% to $68.49 immediately after reporting.

Is Korn Ferry an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).