Korn Ferry (NYSE:KFY), a global organizational consulting firm, stock fell 1.96% (As on March 12, 12:33:21 AM UTC-4, Source: Google Finance) after the company reported better-than-expected third quarter results. Korn Ferry’s Recruitment Process Outsourcing (RPO) segment saw a 4% increase in fee revenue year-over-year, with new business amounting to $210 million. The Executive Search segment reported a 3% increase in fee revenue, driven by a higher number of engagements billed. However, the Consulting segment experienced a 5% decline in fee revenue, primarily due to slower client consumption of solutions and services. The Digital segment’s fee revenue remained flat year-over-year, with a slight increase of 3% on a constant currency basis. The Professional Search & Interim segment also reported flat fee revenue compared to the previous year, impacted by an industry-wide slowdown in demand for permanent and interim professionals. The company cited disciplined cost management and strong consultant productivity as key drivers of its improved profitability in Q3.

KFY in the third quarter of FY25 has reported the adjusted earnings per share of $1.19, beating the analysts’ estimates for the adjusted earnings per share of $1.13. The company had reported the adjusted revenue growth of 1.2 percent to $676.5 million in the third quarter of FY25, beating the analysts’ estimates for revenue of $650.45 million. For the third quarter of fiscal 2025, Korn Ferry reported fee revenue of $668.7 million, which remained flat year-over-year but showed a 2% increase on a constant currency basis. The company’s net income attributable to Korn Ferry was $58.4 million, with a net income margin of 8.7%, slightly down from 8.8% in the same quarter last year. Adjusted EBITDA was $114.5 million, reflecting a 190 basis points increase in margin to 17.1% compared to the previous year.

Additionally, during the quarter, Korn Ferry continued its strategic initiatives, including the repurchase of 237,000 shares of stock for $17.9 million. The company also highlighted the acquisition of Trilogy, effective November 1, 2024, which contributed to the fee revenue in the Professional Search & Interim segment.

For the fourth quarter, Korn Ferry expects adjusted EPS of $1.22-$1.30 on revenue of $680-700 million. This outlook is below analyst projections for EPS of $1.48, though the revenue guidance range encompasses the $682 million consensus estimate. The company expects fee revenue to be in the range of $680 million to $700 million.