Houlihan Lokey Reports Third Quarter Fiscal 2026 Financial Results

LOS ANGELES & NEW YORK--( BUSINESS WIRE)--Houlihan Lokey, Inc. (NYSE:HLI) (“Houlihan Lokey” or the “Company”) today reported financial results for its third quarter ended December 31, 2025.

For the third quarter ended December 31, 2025, revenues were $717 million, compared with $634 million for the third quarter ended December 31, 2024. Net income was $117 million, or $1.70 per diluted share, for the third quarter ended December 31, 2025, compared with $95 million, or $1.39 per diluted share, for the third quarter ended December 31, 2024. Adjusted net income for the third quarter ended December 31, 2025 was $133 million, or $1.94 per diluted share, compared with $114 million, or $1.64 per diluted share, for the third quarter ended December 31, 2024.

“We are pleased with our results for the quarter and our performance year-to-date. We continue to benefit from improving investor sentiment and acceleration in the private equity markets. Most importantly, we continue to broaden and deepen our bench of exceptional talent around the world, most recently with our two transactions in Europe,” stated Scott Adelson, Chief Executive Officer of Houlihan Lokey.

Selected Financial Data

(In thousands, except per share data)

U.S. GAAP

Three Months Ended December 31,

Nine Months Ended December 31,

2025

2024

2025

2024

Revenues by segment

Corporate Finance

473,688

421,602

1,310,868

1,114,047

Financial Restructuring

156,253

130,942

418,272

379,932

Financial and Valuation Advisory

87,131

81,884

252,733

229,015

Revenues

717,072

634,428

1,981,873

1,722,994

Operating expenses:

Compensation

458,571

402,971

1,274,610

1,093,724

Non-compensation

97,771

95,355

305,392

267,759

Operating income

160,730

136,102

401,871

361,511

Other (income) expense, net

(8,918

)

(9,016

)

(25,880

)

(19,569

)

Income before provision for income taxes

169,648

145,118

427,751

381,080

Provision for income taxes

53,100

49,816

101,889

103,289

Net income

116,548

95,302

325,862

277,791

Diluted earnings per share

1.70

1.39

4.74

4.05

Revenues

For the third quarter ended December 31, 2025, revenues were $717 million, compared with $634 million for the third quarter ended December 31, 2024. For the third quarter ended December 31, 2025, Corporate Finance (“CF”) revenues increased 12%, Financial Restructuring (“FR”) revenues increased 19%, and Financial and Valuation Advisory (“FVA”) revenues increased 6%, in each case, when compared with the third quarter ended December 31, 2024.

Expenses

The Company’s compensation expenses, non-compensation expenses, and provision for income taxes during the periods presented and described below are on a GAAP and an adjusted basis.

U.S. GAAP

Adjusted (Non-GAAP) *

Three Months Ended December 31,

($ in thousands)

2025

2024

2025

2024

Expenses:

Compensation

458,571

402,971

441,001

390,173

% of Revenues

64.0

63.5

61.5

Non-compensation

97,771

95,355

93,699

83,002

% of Revenues

13.6

15.0

13.1

Per full-time employee (1)

Provision for income taxes

53,100

49,816

58,465

56,734

% of Pre-tax income

31.3

34.3

30.6

33.3

U.S. GAAP

Adjusted (Non-GAAP) *

Nine Months Ended December 31,

($ in thousands)

2025

2024

2025

2024

Expenses:

Compensation

1,274,610

1,093,724

1,218,852

1,059,641

% of Revenues

64.3

63.5

61.5

Non-compensation

305,392

267,759

270,487

244,211

% of Revenues

15.4

15.5

13.6

14.2

Per full-time employee (1)

113

101

100

Provision for income taxes

101,889

103,289

110,820

140,583

% of Pre-tax income

23.8

27.1

21.4

32.0

Adjusted figures represent non-GAAP information. See “Non-GAAP Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.

(1)

Calculated using the average of the number of full-time employees at the beginning of the reporting period and the end of the reporting period.

Compensation expenses were $459 million for the third quarter ended December 31, 2025, compared with $403 million for the third quarter ended December 31, 2024. This resulted in a compensation ratio of 64.0% for the third quarter ended December 31, 2025, compared with 63.5% for the third quarter ended December 31, 2024. Adjusted compensation expenses were $441 million for the third quarter ended December 31, 2025, compared with $390 million for the third quarter ended December 31, 2024. This resulted in an adjusted compensation ratio of 61.5% for both the third quarter ended December 31, 2025 and the third quarter ended December 31, 2024. The increase in GAAP and adjusted compensation expenses was a result of an increase in revenues for the quarter when compared with the same quarter last year.

Non-compensation expenses were relatively flat at $98 million for the third quarter ended December 31, 2025, compared with $95 million for the third quarter ended December 31, 2024. Adjusted non-compensation expenses were $94 million for the third quarter ended December 31, 2025, compared with $83 million for the third quarter ended December 31, 2024. The increase in adjusted non-compensation expenses was primarily a result of increases in information technology and communications expense and professional fees.

The provision for income taxes was $53 million, representing an effective tax rate of 31.3% for the third quarter ended December 31, 2025, compared with $50 million, representing an effective tax rate of 34.3% for the third quarter ended December 31, 2024. The adjusted provision for income taxes was $58 million, representing an adjusted effective tax rate of 30.6% for the third quarter ended December 31, 2025, compared with $57 million, representing an adjusted effective tax rate of 33.3% for the third quarter ended December 31, 2024. The decrease in the Company’s GAAP and adjusted effective tax rate was primarily a result of decreased state taxes and decreased non-deductible expenses.

Segment Reporting for the Third Fiscal Quarter

Corporate Finance

CF revenues were $474 million for the third quarter ended December 31, 2025, compared with $422 million for the third quarter ended December 31, 2024, representing an increase of 12%. Revenues increased due to an increase in the average transaction fee on closed transactions, which was driven by transaction mix and does not represent a short-term trend in the average fee on closed transactions. Revenues also increased due to an increase in the number of closed transactions during the quarter, which was driven by favorable market conditions.

Three Months Ended December 31,

Nine Months Ended December 31,

($ in thousands)

2025

2024

2025

2024

Corporate Finance

Revenues

473,688

421,602

1,310,868

1,114,047

# of Managing Directors (1)

238

# of Closed transactions (2)

177

170

473

417

Financial Restructuring

FR revenues were $156 million for the third quarter ended December 31, 2025, compared with $131 million for the third quarter ended December 31, 2024, representing an increase of 19%. Revenues increased due to an increase in the average transaction fee on closed transactions, which was driven by transaction mix and does not represent a trend in the average fee on closed transactions.

Three Months Ended December 31,

Nine Months Ended December 31,

($ in thousands)

2025

2024

2025

2024

Financial Restructuring

Revenues

156,253

130,942

418,272

379,932

# of Managing Directors (1)

# of Closed transactions (2)

113

107

Financial and Valuation Advisory

FVA revenues were $87 million for the third quarter ended December 31, 2025, compared with $82 million for the third quarter ended December 31, 2024, representing an increase of 6%. Revenues increased due to an increase in the number of Fee Events, driven by improvements in the M&A markets.

Three Months Ended December 31,

Nine Months Ended December 31,

($ in thousands)

2025

2024

2025

2024

Financial and Valuation Advisory

Revenues

87,131

81,884

252,733

229,015

# of Managing Directors (1)

# of Fee Events (2)

1,103

1,005

1,987

1,804

(1)

As of the end of the respective reporting period.

(2)

A Fee Event includes any engagement that involves revenue activity during the measurement period based on a revenue minimum of one thousand dollars. References in this press release to closed transactions should be understood to be the same as transactions that are “effectively closed” as described in our annual report on Form 10-K.

Balance Sheet and Capital Allocation

The Board of Directors of the Company declared a regular quarterly cash dividend of $0.60 per share of Class A and Class B common stock. The dividend will be payable on March 15, 2026 to stockholders of record as of the close of business on March 2, 2026. Also in our third quarter, we repurchased approximately 418,000 shares as part of our share repurchase program. As of December 31, 2025, the Company had $1.18 billion of unrestricted cash and cash equivalents and investment securities.

Investor Conference Call and Webcast

The Company will host a conference call and live webcast at 5:00 p.m. Eastern Time on Wednesday, January 28, 2026, to discuss its third quarter fiscal 2026 results. The number to call is 1-844-825-9789 (domestic) or 1-412-317-5180 (international) and entering the conference ID 10205652. A live webcast will be available in the Investor Relations section of the Company’s website. A replay of the conference call will be available from January 28, 2026 through February 4, 2026, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the passcode 10205652. A replay of the webcast will be archived and available on the Company’s website.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects,” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond the Company’s control and could materially affect actual results, performance, or achievements. For a further description of such factors, you should read the Company’s filings with the Securities and Exchange Commission. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. The Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Non-GAAP Financial Measures

Adjusted net income, total and on a per share basis, and certain adjusted items used to determine adjusted net income, are presented and discussed in this earnings press release and are non-GAAP measures that management believes, when presented together with comparable GAAP measures, are useful to investors in understanding the Company’s operating results. The adjusted items included in this earnings press release as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these adjusted amounts are not a measurement of financial performance or liquidity under GAAP and should not be considered as an alternative to the Company’s financial information determined under GAAP. For a description of the Company’s use of these adjusted items and a reconciliation with comparable GAAP items, see the section of this press release titled “Reconciliation of GAAP to Adjusted Financial Information.” Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations, and cash flows.

About Houlihan Lokey

Houlihan Lokey, Inc. (NYSE:HLI) is a leading global investment bank recognized for delivering independent strategic and financial advice to corporations, financial sponsors, and governments. With uniquely deep industry expertise, broad international reach, and a partnership approach rooted in trust, the firm provides innovative, integrated solutions across mergers and acquisitions, capital solutions, financial restructuring, and financial and valuation advisory. Our unmatched transaction volumes provide differentiated, data-driven perspectives that help our clients achieve their most critical goals. To learn more about Houlihan Lokey, please visit HL.com.

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands, except share data and par value)

December 31, 2025

March 31, 2025

Assets:

Cash and cash equivalents

1,056,482

971,007

Investment securities

127,600

195,624

Accounts receivable, net of allowance for credit losses

210,876

257,326

Unbilled work in process, net of allowance for credit losses

232,673

157,760

Property and equipment, net

141,433

149,350

Operating lease right-of-use assets

415,132

362,669

Goodwill

1,292,804

1,284,589

Other intangible assets, net

199,597

212,670

Other assets

260,158

228,713

Total assets

3,936,755

3,819,708

Liabilities and stockholders' equity

Liabilities:

Accrued salaries and bonuses

881,133

936,619

Accounts payable and accrued expenses

107,659

137,228

Operating lease liabilities

497,131

438,185

Other liabilities

157,065

132,799

Total liabilities

1,642,988

1,644,831

Stockholders' equity:

Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 54,333,722 and 53,822,189 shares, respectively

Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 15,351,712 and 16,021,106 shares, respectively

Additional paid-in capital

734,490

843,350

Retained earnings

1,588,678

1,394,738

Accumulated other comprehensive loss

(29,470

)

(63,281

)

Total stockholders’ equity

2,293,767

2,174,877

Total liabilities and stockholders’ equity

3,936,755

3,819,708

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

Three Months Ended December 31,

Nine Months Ended December 31,

(In thousands, except share and per share data)

2025

2024

2025

2024

Revenues

717,072

634,428

1,981,873

1,722,994

Operating expenses:

Employee compensation and benefits

441,001

390,173

1,218,852

1,059,641

Acquisition related compensation and benefits

17,570

12,798

55,758

34,083

Travel, meals, and entertainment

18,736

17,942

53,891

50,024

Rent

19,523

22,259

55,502

56,717

Depreciation and amortization

8,297

9,561

34,590

25,861

Information technology and communications

20,357

16,945

54,873

50,889

Professional fees

11,740

11,744

33,733

29,898

Other operating expenses

19,118

16,904

54,908

53,542

Revaluation of acquisition contingent consideration

—

17,895

828

Total operating expenses

556,342

498,326

1,580,002

1,361,483

Operating income

160,730

136,102

401,871

361,511

Other (income) expense, net

(8,918

)

(9,016

)

(25,880

)

(19,569

)

Income before provision for income taxes

169,648

145,118

427,751

381,080

Provision for income taxes

53,100

49,816

101,889

103,289

Net income

116,548

95,302

325,862

277,791

Weighted average shares of common stock outstanding:

Basic

66,633,965

65,831,122

66,615,145

65,563,605

Fully diluted

68,426,644

68,760,959

68,691,432

68,558,325

Earnings per share

Basic

1.75

1.45

4.89

4.24

Fully diluted

1.70

1.39

4.74

4.05

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO ADJUSTED FINANCIAL INFORMATION

(UNAUDITED)

Three Months Ended December 31,

Nine Months Ended December 31,

(In thousands, except share and per share data)

2025

2024

2025

2024

Revenues

717,072

634,428

1,981,873

1,722,994

Compensation expenses

Compensation expenses (GAAP)

458,571

402,971

1,274,610

1,093,724

Less: Acquisition related compensation and benefits (1)

(17,570

)

(12,798

)

(55,758

)

(34,083

)

Compensation expenses (adjusted)

441,001

390,173

1,218,852

1,059,641

Non-compensation expenses

Non-compensation expenses (GAAP)

97,771

95,355

305,392

267,759

Less: Acquisition related legal structure reorganization (2)

(593

)

(3,619

)

(1,467

)

(4,824

)

Less: Integration and acquisition related costs (3)

(2,169

)

(4,668

)

(2,169

)

(8,222

)

Less: Acquisition amortization (4)

(1,310

)

(4,066

)

(13,374

)

(9,674

)

Less: Revaluation of acquisition contingent consideration (5)

—

(17,895

)

(828

)

Non-compensation expenses (adjusted)

93,699

83,002

270,487

244,211

Operating income

Operating income (GAAP)

160,730

136,102

401,871

361,511

Plus: Adjustments (6)

21,642

25,151

90,663

57,631

Operating income (adjusted)

182,372

161,253

492,534

419,142

Other (income) expense, net

Other (income) expense, net (GAAP)

(8,918

)

(9,016

)

(25,880

)

(19,569

)

Other (income) expense, net (adjusted)

(8,918

)

(9,016

)

(25,880

)

(19,569

)

Provision for income taxes

Provision for income taxes (GAAP)

53,100

49,816

101,889

103,289

Plus: Impact of the excess tax benefit for stock vesting (7)

—

21,921

Less: Non-deductible acquisition related costs (8)

(1,250

)

(1,462

)

(3,303

)

(1,462

)

Less: Reversal of deferred tax asset (9)

—

(1,690

)

Adjusted provision for income taxes

51,850

48,354

98,586

122,058

Plus: Resulting tax impact (10)

6,615

8,380

12,234

18,525

Provision for income taxes (adjusted)

58,465

56,734

110,820

140,583

Net income

Net income (GAAP)

116,548

95,302

325,862

277,791

Plus: Adjustments (11)

16,277

18,233

81,732

20,337

Net income (adjusted)

132,825

113,535

407,594

298,128

Fully diluted shares outstanding

Fully diluted shares outstanding (GAAP)

68,426,644

68,760,959

68,691,432

68,558,325

Plus: Impact of unvested GCA retention and deferred share awards

172,940

334,677

232,440

454,494

Fully diluted shares outstanding (adjusted)

68,599,584

69,095,636

68,923,872

69,012,819

Fully diluted EPS (GAAP)

1.70

1.39

4.74

4.05

Fully diluted EPS (adjusted)

1.94

1.64

5.91

4.32

Notes to Reconciliation of GAAP to Adjusted Financial Information

(1)

Reflects acquisition related deferred retention payments.

(2)

Reflects legal and other professional fees associated with the simplification of our legal entity structure that has resulted from acquisitions.

(3)

Reflects integration and acquisition related costs, including asset write offs or impairments.

(4)

Reflects amortization of intangible assets recognized in purchase accounting from our acquisitions.

(5)

Reflects the fair value remeasurement of acquisition‑related contingent consideration.

(6)

The aggregate of adjustments from compensation and non-compensation expenses.

(7)

Prior to fiscal 2026, reflects the exclusion of stock-based compensation tax deductions recognized upon vesting of stock-based awards, where the fair value at vesting exceeded the grant date fair value.

(8)

Reflects acquisition-related costs which are non-deductible for income tax purposes.

(9)

Represents the reversal of deferred income taxes related to non-deductible expenses resulting from the senior management transition in fiscal 2025.

(10)

Reflects the tax impact of utilizing the adjusted effective tax rate on the non-tax adjustments identified above.

(11)

Consists of all adjustments identified above net of the associated tax impact.