Korn Ferry (NYSE:KFY) stock fell 0.088% (As on March 10, 11:19:40 AM UTC-4, Source: Google Finance) after the company reported third quarter results that exceeded analyst expectations, and issued a cautious fourth quarter outlook. Fee revenue grew across all solutions, led by Executive Search at 13%, followed by Professional Search & Interim and Consulting, both at 5%. The company reported estimated remaining fees under existing contracts of $1.9 billion at quarter end, up 11% YoY. Total company new business, excluding RPO, grew 11%, with both consulting and digital reaching all-time quarterly highs. RPO delivered $54 million of new business in the quarter with 78% coming from new logos and 22% from renewals.
Moreover, the new business referrals and Marquee & Diamond Accounts program continue to be contributors of growth enabled by the We Are Korn Ferry go-to-market initiative. The new business referrals accounted for 27.2% of the consolidated fee revenue, that’s up 200 basis points year-over-year and the Marquee & Diamond Accounts continued to be strong at 40% of our total fee revenue. In addition, in the third quarter, subscription and license fee revenue grew 8%. Fee revenue in the Americas was up 6%, led by growth in Executive Search and RPO. EMEA fee revenue continued to be strong, growing 13% with double-digit growth in Executive Search, Consulting, Digital and PS&I and APAC fee revenue declined slightly at 2% with growth in Executive Search being offset by modest weakness in other solutions.
KFY in the third quarter of FY26 has reported the adjusted earnings per share of $1.28, beating the analysts’ estimates for the adjusted earnings per share of $1.23. Fee revenue reached $717.4 million, up 7% YoY and well above the $692.44 million consensus estimate. Net income attributable to Korn Ferry increased 12% YoY to $65.3 million, while adjusted EBITDA rose 8% to $123.1 million with a margin of 17.2%.
Additionally, the company has approved a 15% increase in our quarterly cash dividend to $0.55 per share
The company provided fourth quarter guidance of $1.34 to $1.40 per share, with a midpoint of $1.37 matching analyst estimates of $1.37. For revenue, Korn Ferry expects $730 million to $750 million, with the midpoint of $740 million slightly above the consensus of $732.7 million. The company expects adjusted EBITDA margin to range from 17.1% to 17.3%.