Group 1: AI and Technology Trends - The year is expected to be significant for agentic AI, with leaders like Google Gemini's Demis Hassabis and ServiceNow's Bill McDermott affirming its capabilities and potential for deployment in businesses [2][3] - Google is preparing to reintroduce Google Glass, leveraging advancements in AI to enhance consumer applications, with optimism about its future in the market [3] - Schneider Electric's CEO Olivier Blum aims to integrate energy intelligence through a unified data platform, projecting a 7%-10% annual growth opportunity if successful [4] Group 2: Corporate Strategies and Market Reactions - Netflix co-CEOs support the acquisition of Warner Bros. Discovery, framing it as beneficial for streaming and production, despite investor concerns leading to a nearly 5% drop in stock price [8] - The Edelman Trust Barometer indicates a growing insular mindset among business leaders, with 70% of respondents reluctant to engage with differing viewpoints, highlighting a need for urgency in addressing this crisis [6] Group 3: Market Overview - S&P 500 futures increased by 0.19% following a previous session decline of 2.06%, while other global indices showed mixed results, indicating a volatile market environment [9]

Core Insights - Job loss, whether through layoffs or firings, is a common experience and should not define one's career trajectory [1][2] Group 1: Emotional Processing and Reflection - It is crucial for individuals to process their emotions after job loss, as they may experience stages of grief [4] - Experts recommend taking a finite amount of time, approximately 30 days, to reflect on the job loss and learn from it [6] - Surrounding oneself with supportive individuals or a job coach can aid in the emotional recovery process [5] Group 2: Job Search Strategy - After processing the job loss, individuals should create a job search plan that includes updating their LinkedIn profile and résumé, as well as researching new opportunities [8] - Networking is emphasized as a vital component of the job search process, especially in a competitive market [8] - Individuals may consider using this time to pivot their careers by pursuing relevant classes or certifications [9] Group 3: Interview Preparation - Candidates should prepare to discuss their job loss in future interviews without dwelling on negative aspects [10] - It is advisable to focus on future aspirations rather than the circumstances of leaving the previous job [13] - Providing too much detail about the job loss can raise suspicions, so candidates should keep explanations concise and avoid speaking negatively about former employers [14]

Core Insights - The return-to-office trend is shifting, with remote work becoming a status symbol, particularly for high-performing employees [1][2] - A new hierarchy is emerging where only top talent can secure fully remote roles, while others are expected to return to the office [2][4] - The hybrid work model is becoming the norm, with most employees working three to four days in the office and some days from home [3][5] Group 1: Return-to-Office Mandate - Instagram employees are among many facing a return-to-office mandate in 2025, indicating a broader trend in the workforce [1] - The CEO of Randstad suggests that the return-to-office war is over, and a new pecking order based on talent has emerged [1][2] Group 2: Hybrid Work Model - The hybrid model is characterized by flexibility, with firms moving away from traditional 9-to-5 schedules [3] - Korn Ferry's research supports the idea of a "new hybrid hierarchy," where flexibility is a perk for star performers [3][5] Group 3: Talent and Flexibility - Workers with scarce skills can negotiate for fully remote or flexible work arrangements, while those in junior roles have less leverage [4] - High performers are already being offered flexible schedules as a reward for their contributions, while mid-range performers do not enjoy the same privileges [5] - As hiring slows and pay increases stall, flexibility remains a key tool for employers to retain valuable talent [6]

Core Insights - Artificial intelligence (AI) is now integral to recruitment processes, enhancing speed, efficiency, and decision-making, with 70% of talent acquisition leaders noting improved efficiency through AI [2] - AI is positioned as a tool to enhance the hiring experience rather than replace human recruiters, addressing challenges in labor markets and candidate expectations [3] AI Tools and Their Impact - AI technologies such as chatbots and intelligent applicant tracking systems (ATS) are transforming candidate engagement, making the hiring process feel more personal and timely [4] - AI assists in job ad creation by generating draft descriptions quickly, allowing for rapid iterations and refinements [8] - AI-driven job ad tools improve inclusivity by scanning for biased language and suggesting alternatives, broadening the talent pool [9] Skills and Hiring Needs - AI helps organizations predict future skill requirements by analyzing historical data and industry trends, serving as a decision-support tool rather than a decision-maker [6][7] - The shift towards skills-based hiring, driven by AI, allows organizations to focus on core competencies, resulting in a more diverse candidate pipeline [10] Adoption Trends in the GCC - Recruitment practices in the UAE and GCC are evolving from traditional keyword-based systems to AI-driven decision-support tools [11] - Early adopters of AI in recruitment, particularly in technology and large conglomerates, are seeing measurable gains in efficiency and accuracy over time [13] - Sectors like healthcare, finance, and technology lead in AI adoption due to their need for specialized skill sets [14][15] Barriers and Considerations - Some organizations still rely on traditional recruitment methods, which can be effective for those not requiring large volumes or highly technical roles [16][17] - While AI enhances efficiency, human judgment remains crucial, especially in relationship-driven markets, for assessing soft skills and cultural fit [18][19]

Core Viewpoint - Western countries are facing a demographic crisis characterized by an aging population and low fertility rates, leading to a potential economic downturn due to a shrinking workforce [1][2][3]. Economic Implications - The World Bank warns that the economic consequences of this demographic shift will be severe, as a declining working population will struggle to meet the demands for goods and services [2]. - Countries like Japan are already experiencing the financial strain of an aging population, with nursing care costs projected to rise by 75% over the next 30 years [4]. - A study by Korn Ferry predicts a global talent shortage of over 85 million people by 2030, which could result in a loss of $8.5 trillion in expected revenues across various sectors [6]. Labor Market Challenges - The ratio of working-age individuals to the elderly is diminishing, making it increasingly difficult to support the aging population financially [4]. - Current policies, such as Greece's six-day workweek, are seen as insufficient to address the structural labor shortages [5][11]. - The U.S. faces a demographic labor force gap of 232 million people globally, indicating that merely increasing working hours will not suffice [12]. Immigration Solutions - Lant Pritchett proposes a radical rethinking of immigration policies, advocating for a temporary rotational migration system to fill labor shortages [14][25]. - He suggests that developed nations should allow immigrants to work for a limited time, which would benefit both the host and sending countries economically [15][21]. - Pritchett emphasizes the need for bilateral agreements to manage labor needs effectively while addressing potential shortages in sending nations [21]. Political and Business Engagement - Pritchett is working to build political support for his immigration proposal by collaborating with countries expanding their immigration channels and engaging business leaders in sectors most affected by labor shortages [25][26]. - The urgency of addressing labor shortages may prompt politicians to reconsider immigration policies, moving beyond traditional binary views of citizenship and border control [23].

Core Insights - Korn Ferry (KFY) has been rated as a buy due to improved conditions driven by growth in high-value projects and strong performance in professional search interim [1] Group 1: Investment Philosophy - The investment approach focuses on identifying businesses with potential for scaling and unlocking significant terminal value [1] - Emphasis is placed on understanding core business economics, including competitive moat, unit economics, reinvestment opportunities, and management quality [1] - The goal is to translate these factors into long-term free cash flow generation and shareholder value creation [1] Group 2: Market Focus - The analysis is directed towards sectors that exhibit strong secular tailwinds, indicating a preference for industries with favorable long-term growth prospects [1] - The investment strategy is rooted in fundamental research, aiming to highlight what drives long-term equity value [1] Group 3: Author's Background - The author has 10 years of self-educated investment experience and currently manages personal funds sourced from friends and family [1] - The motivation for sharing insights on Seeking Alpha is to provide valuable investment analysis and receive feedback from the investment community [1]

Core Insights - Korn Ferry (KFY) has been rated as a buy due to improved conditions driven by growth in high-value projects and strong performance in professional search interim [1] Group 1: Investment Approach - The investment strategy focuses on identifying businesses with potential for scaling and unlocking significant terminal value [1] - Emphasis is placed on understanding core business economics, including competitive advantages, unit economics, reinvestment opportunities, and management quality [1] - The goal is to translate these factors into long-term free cash flow generation and shareholder value creation [1] Group 2: Professional Background - The analyst has 10 years of experience in investment banking and is currently managing personal funds sourced from friends and family [1] - The motivation for sharing insights on Seeking Alpha is to provide valuable investment analysis and receive feedback from other investors [1] - The analysis aims to help readers focus on the drivers of long-term equity value [1]

Financial Performance - Q2 FY'26 fee revenue was $721.7 million, a year-over-year increase of 7%[109] - Net income attributable to Korn Ferry was $72.4 million, a 19% year-over-year increase, with a margin of 10.0%, up 100bps year-over-year[109] - Diluted earnings per share increased to $1.36 in Q2 FY'26, up 19% compared to the year-ago quarter[109] - Total revenue for the three months ended October 31, 2025, was $729.8 million, reflecting a 7.0% increase from $682.0 million in the same quarter of 2024[112] - Net income attributable to Korn Ferry increased by $11.6 million, or 19%, to $72.4 million in the three months ended October 31, 2025, compared to $60.8 million in the year-ago quarter[145] - Net income attributable to Korn Ferry increased by $15.6 million, or 13%, to $139.0 million in the six months ended October 31, 2025 compared to $123.4 million in the year-ago period[192] Revenue Breakdown - Executive Search fee revenue grew 10% year-over-year, while Professional Search & Interim grew 17% year-over-year[109] - Consulting fee revenue for the three months ended October 31, 2025, was $172.8 million, accounting for 23.9% of total fee revenue, compared to $166.8 million and 24.7% in the prior year[113] - Digital fee revenue for the six months ended October 31, 2025, was $180.2 million, representing 12.6% of total fee revenue, slightly down from $181.1 million and 13.4% in the same period of 2024[110] - Executive Search North America reported fee revenue of $142.1 million, an increase of $12.2 million, or 9%, attributed to a 5% increase in the weighted-average fee billed per engagement[118] - Professional Search & Interim fee revenue increased by $20.0 million, or 17%, to $141.1 million, largely due to interim fee revenue associated with the acquisition of Trilogy International[122] - Fee revenue for the three months ended October 31, 2025, was $721.7 million, an increase of $47.3 million, or 7%, compared to $674.4 million in the year-ago quarter[115] Expenses and Costs - Compensation and benefits expense increased by $24.6 million, or 6%, to $462.0 million, primarily due to higher performance-related bonuses[124] - General and administrative expenses for the three months ended October 31, 2025, decreased to 7.0% of total revenue from 9.6% in the same period of 2024[110] - Cost of services expense increased by $14.4 million, or 22%, to $79.1 million, with Professional Search & Interim accounting for $14.0 million of the increase[142] - Depreciation and amortization expenses increased by $11.9 million, or 60%, to $31.6 million, primarily due to accelerated depreciation related to the sunset of the Digital platform[143] - General and administrative expenses decreased by $10.4 million, or 8%, to $114.1 million in the six months ended October 31, 2025 from $124.5 million in the year-ago period, primarily due to a $13.9 million gain from the modification of an office lease[179] Adjusted EBITDA - Adjusted EBITDA for Q2 FY'26 was $124.8 million, a 7% year-over-year increase, with a margin of 17.3%, essentially flat year-over-year[109] - Adjusted EBITDA for the six months ended October 31, 2025, was $245.2 million, with an EBITDA margin of 17.1%, up from $228.2 million and 16.9% in the same period of 2024[114] - Adjusted EBITDA increased by $7.8 million, or 7%, to $124.8 million in the three months ended October 31, 2025, compared to $117.0 million in the year-ago quarter[146] - Executive Search North America Adjusted EBITDA increased by $11.2 million, or 16%, to $83.2 million in the six months ended October 31, 2025 compared to $72.0 million in the year-ago period[196] - Professional Search & Interim Adjusted EBITDA was $58.2 million in the six months ended October 31, 2025, an increase of $5.3 million, or 10%, compared to $52.9 million in the year-ago period[200] Cash and Working Capital - The company had $1,038.3 million in cash and cash equivalents as of October 31, 2025, down from $1,277.0 million as of April 30, 2025[213] - Working capital increased to $857.0 million as of October 31, 2025, up from $794.5 million as of April 30, 2025, primarily due to a decrease in compensation and benefits payable[216] - Cash used in investing activities was $41.9 million for the six months ended October 31, 2025, compared to $36.3 million in the prior year[217] - Cash used in financing activities decreased to $87.8 million for the six months ended October 31, 2025, from $111.1 million in the same period last year[218] Other Financial Metrics - Interest expense for the three months ended October 31, 2025, was $5.8 million, representing 0.8% of total revenue, compared to $5.6 million and 0.9% in the same period of 2024[112] - The provision for income tax was $51.9 million with an effective tax rate of 26.9%, compared to $47.3 million and 27.2% in the previous year[204] - Other income, net was $7.1 million in the three months ended October 31, 2025, compared to $5.4 million in the year-ago quarter[155] - Other income, net was $19.8 million for the six months ended October 31, 2025, slightly down from $19.9 million in the same period last year[202] - Net interest expense decreased to $9.3 million for the six months ended October 31, 2025, compared to $9.6 million in the prior year[203]

Core Insights - Korn Ferry shares increased following the release of stronger quarterly profit and revenue, driven by broad-based growth across its businesses [1][2] Financial Performance - The company reported second-quarter adjusted earnings per share of $1.33, surpassing the analyst consensus estimate of $1.31 [2] - Quarterly sales reached $729.80 million, exceeding the expected $705.97 million [2] - Fee revenue for the second quarter was $721.7 million, reflecting a 7% increase year-over-year [3] - Executive Search revenue rose by 10%, while Professional Search & Interim revenue increased by 17% [3] - Adjusted EBITDA grew to $124.8 million, a 7% increase from the previous year, with a margin of 17.3% remaining stable [5] - The company ended the quarter with cash and equivalents totaling $761.579 million [5] - Estimated remaining fees under existing contracts were $1.842 billion, marking a 20% year-over-year increase [5] Strategic Positioning - Korn Ferry emphasizes the need for adaptable strategies in a rapidly changing economy, positioning itself as a partner to help organizations align strategy, operations, and talent [4] - The CEO highlighted the company's outstanding performance, noting the fourth consecutive quarter of accelerated growth, particularly from Marquee and Diamond accounts [4] Dividend Announcement - The company declared a cash dividend of 48 cents per share, payable on January 15, 2026, to shareholders of record on December 19, 2025 [6] Future Outlook - For the third quarter, Korn Ferry expects adjusted EPS between $1.19 and $1.25, aligning closely with the Street's estimate of $1.24 [7] - The projected GAAP EPS for the third quarter is between $1.15 and $1.21, which is below the Street's estimate of $1.26 [7] - Fee revenue for the third quarter is anticipated to be between $680 million and $694 million [7] - At the time of publication, Korn Ferry shares were up 3.52% at $67.26 [7]

Financial Data and Key Metrics Changes - Consolidated fee revenue grew 7% year-over-year to $722 million [11] - Adjusted EBITDA increased by $8 million, or 7% year-over-year, to $125 million, with an adjusted EBITDA margin of 17.3% [11] - Adjusted diluted earnings per share rose by $0.12, or 10% year-over-year, to $1.33 [11] - Estimated remaining fees under existing contracts increased to $1.84 billion, up 20% year-over-year [10] Business Line Data and Key Metrics Changes - Executive search fee revenue grew 10%, marking the sixth consecutive quarter of year-over-year growth [11] - Professional search and interim fee revenue increased by 17% year-over-year, with professional search up 7% and interim up 24% [11] - RPO delivered $253 million of new business in the quarter, with 16% from new logos and 84% from renewals [11] - Business referrals grew to 27.6% of consolidated fee revenue, up approximately 250 basis points year-over-year and quarter-sequential [10] Market Data and Key Metrics Changes - Fee revenue in the Americas was up 3% year-over-year, led by executive search and RPO [12] - EMEA fee revenue grew 20% year-over-year, with growth in executive search, professional search, interim, consulting, and digital [12] - APAC fee revenue remained flat, with moderate growth in executive search and professional search, offset by slight declines in RPO, consulting, and digital [12] Company Strategy and Development Direction - The company is focusing on a unified strategy under "We Are Korn Ferry," emphasizing client centricity and integrated solutions [4][7] - The launch of the new Talent Suite technology platform is expected to enhance the company's ability to serve clients as a holistic talent partner [9] - The company aims to drive long-term, profitable, and sustainable growth by leveraging foundational assets to deliver differentiated solutions [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for a strong 2026, despite the uncertain business environment [7][15] - The company anticipates fee revenue in the third quarter of fiscal 2026 to range from $680-$694 million, with adjusted EBITDA margins between 17.2%-17.4% [14] - Management noted that the current economic conditions have not significantly changed, and they remain focused on identified growth opportunities [25][59] Other Important Information - The company returned almost $70 million to shareholders through combined repurchases and dividends during the quarter [12] - Capital expenditures of $43 million were focused on Talent Suite, productivity tools, and other solution enhancements [13] Q&A Session Summary Question: Strength in Executive Search Business - Management noted significant growth in executive search worldwide, driven by changing leadership needs and demographic shifts [17][18] Question: Placement Solutions Improvement - Management confirmed that the strategy is working, with sequential growth in Professional Search and Interim Solutions, and highlighted the quality of their IP and AI integration [24][25] Question: Consulting Bill Rates and Margins - Management indicated that bill rates have increased due to larger, more impactful engagements, and there is substantial opportunity for further growth in consulting [26][30] Question: Seasonal Trends in Executive Search - Management expects typical seasonal softness in Q3 due to holiday impacts, which is factored into their guidance [33] Question: Digital Business Performance - Management acknowledged a purposeful reduction in sellers in the digital solution to pivot towards enterprise-oriented sales, impacting top-line performance [58][59] Question: New RPO Contracts - The majority of new RPO contracts were renewals from existing marquee clients, with a significant portion coming from the healthcare and industrial sectors [60][61]