Houlihan Lokey Reports Second 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 second quarter ended September 30, 2025.

For the second quarter ended September 30, 2025, revenues were $659 million, compared with $575 million for the second quarter ended September 30, 2024. Net income was $112 million, or $1.63 per diluted share, for the second quarter ended September 30, 2025, compared with $94 million, or $1.37 per diluted share, for the second quarter ended September 30, 2024. Adjusted net income for the second quarter ended September 30, 2025 was $127 million, or $1.84 per diluted share, compared with $100 million, or $1.46 per diluted share, for the second quarter ended September 30, 2024.

“Our results for the quarter reflect our strong business model and improving market conditions. We enter the second half of the year with optimism for continued momentum,” stated Scott Adelson, Chief Executive Officer of Houlihan Lokey.

Selected Financial Data

(In thousands, except per share data)

U.S. GAAP

Three Months Ended September 30,

Six Months Ended September 30,

2025

2024

2025

2024

Revenues by segment

Corporate Finance

438,661

364,028

837,180

692,445

Financial Restructuring

133,803

131,568

262,019

248,990

Financial and Valuation Advisory

86,988

79,361

165,602

147,131

Revenues

659,452

574,957

1,264,801

1,088,566

Operating expenses:

Compensation

423,202

360,637

816,039

690,753

Non-compensation

84,909

83,651

207,621

172,404

Operating income

151,341

130,669

241,141

225,409

Other (income) expense, net

(8,712

)

(5,419

)

(16,962

)

(10,553

)

Income before provision for income taxes

160,053

136,088

258,103

235,962

Provision for income taxes

48,272

42,539

48,789

53,473

Net income

111,781

93,549

209,314

182,489

Diluted earnings per share

1.63

1.37

3.04

2.67

Revenues

For the second quarter ended September 30, 2025, revenues were $659 million, compared with $575 million for the second quarter ended September 30, 2024. For the second quarter ended September 30, 2025, Corporate Finance (“CF”) revenues increased 21%, Financial Restructuring (“FR”) revenues increased 2%, and Financial and Valuation Advisory (“FVA”) revenues increased 10%, in each case, when compared with the second quarter ended September 30, 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 September 30,

($ in thousands)

2025

2024

2025

2024

Expenses:

Compensation

423,202

360,637

405,562

353,599

% of Revenues

64.2

62.7

61.5

Non-compensation

84,909

83,651

82,319

80,879

% of Revenues

12.9

14.5

12.5

14.1

Per full-time employee (1)

Provision for income taxes

48,272

42,539

53,518

45,610

% of Pre-tax income

30.2

31.3

29.7

31.3

(1)

U.S. GAAP

Adjusted (Non-GAAP) *

Six Months Ended September 30,

($ in thousands)

2025

2024

2025

2024

Expenses:

Compensation

816,039

690,753

777,851

669,468

% of Revenues

64.5

63.5

61.5

Non-compensation

207,621

172,404

176,788

161,209

% of Revenues

16.4

15.8

14.0

14.8

Per full-time employee (1)

Provision for income taxes

48,789

53,473

52,355

83,849

% of Pre-tax income

18.9

22.7

16.0

31.2

(1)

Compensation expenses were $423 million for the second quarter ended September 30, 2025, compared with $361 million for the second quarter ended September 30, 2024. This resulted in a compensation ratio of 64.2% for the second quarter ended September 30, 2025, compared with 62.7% for the second quarter ended September 30, 2024. Adjusted compensation expenses were $406 million for the second quarter ended September 30, 2025, compared with $354 million for the second quarter ended September 30, 2024. This resulted in an adjusted compensation ratio of 61.5% for both the second quarter ended September 30, 2025 and the second quarter ended September 30, 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 $85 million for the second quarter ended September 30, 2025, compared with $84 million for the second quarter ended September 30, 2024. Adjusted non-compensation expenses were relatively flat at $82 million for the second quarter ended September 30, 2025, compared with $81 million for the second quarter ended September 30, 2024.

The provision for income taxes was $48 million, representing an effective tax rate of 30.2% for the second quarter ended September 30, 2025, compared with $43 million, representing an effective tax rate of 31.3% for the second quarter ended September 30, 2024. The adjusted provision for income taxes was $54 million, representing an adjusted effective tax rate of 29.7% for the second quarter ended September 30, 2025, compared with $46 million, representing an adjusted effective tax rate of 31.3% for the second quarter ended September 30, 2024.

Segment Reporting for the Second Fiscal Quarter

Corporate Finance

CF revenues were $439 million for the second quarter ended September 30, 2025, compared with $364 million for the second quarter ended September 30, 2024, representing an increase of 21%. Revenues increased due to an increase in the number of closed transactions during the quarter, which was driven by favorable market conditions for M&A and Capital Solutions. This increase was partially offset by a decrease 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 September 30,

Six Months Ended September 30,

($ in thousands)

2025

2024

2025

2024

Corporate Finance

Revenues

438,661

364,028

837,180

692,445

# of Managing Directors (1)

242

224

242

224

# of Closed transactions (2)

171

131

296

247

Financial Restructuring

FR revenues were $134 million for the second quarter ended September 30, 2025, compared with $132 million for the second quarter ended September 30, 2024, representing an increase of 2%. Revenues increased due to an increase in the number of closed transactions during the quarter, which was driven by favorable market conditions for restructuring transactions. This increase was partially offset by a decrease 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 September 30,

Six Months Ended September 30,

($ in thousands)

2025

2024

2025

2024

Financial Restructuring

Revenues

133,803

131,568

262,019

248,990

# of Managing Directors (1)

# of Closed transactions (2)

Financial and Valuation Advisory

FVA revenues were $87 million for the second quarter ended September 30, 2025, compared with $79 million for the second quarter ended September 30, 2024, representing an increase of 10%. Revenues increased due to an increase in the number of Fee Events, driven by improvements in the M&A markets.

Three Months Ended September 30,

Six Months Ended September 30,

($ in thousands)

2025

2024

2025

2024

Financial and Valuation Advisory

Revenues

86,988

79,361

165,602

147,131

# of Managing Directors (1)

# of Fee Events (2)

1,075

903

1,517

1,316

(1)

(2)

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 December 15, 2025 to stockholders of record as of the close of business on December 1, 2025. As of September 30, 2025, the Company had $1.11 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 Thursday, October 30, 2025, to discuss its second 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 10203876. 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 October 30, 2025 through November 6, 2025, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the passcode 10203876. 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 global investment bank with expertise in mergers and acquisitions, capital solutions, financial restructuring, and financial and valuation advisory. Houlihan Lokey serves corporations, institutions, and governments worldwide with offices in the Americas, Europe, the Middle East, and the Asia Pacific region. Independent advice and intellectual rigor are hallmarks of the firm’s commitment to client success across its advisory services. The firm is the No. 1 investment bank for all global M&A transactions for the past two years, the No. 1 M&A advisor for the past 10 years in the U.S., the No. 1 global restructuring advisor for the past 11 years, and the No. 1 global M&A fairness opinion advisor over the past 25 years, all based on number of transactions and according to data provided by LSEG.

For more information, please visit www.HL.com.

Appendix

Condensed Consolidated Balance Sheets (Unaudited)

Condensed Consolidated Statements of Income (Unaudited)

Reconciliation of GAAP to Adjusted Financial Information (Unaudited)

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands, except share data and par value)

September 30, 2025

March 31, 2025

Assets:

Cash and cash equivalents

923,576

971,007

Investment securities

184,642

195,624

Accounts receivable, net of allowance for credit losses

251,156

257,326

Unbilled work in process, net of allowance for credit losses

191,248

157,760

Property and equipment, net

145,193

149,350

Operating lease right-of-use assets

352,622

362,669

Goodwill

1,292,121

1,284,589

Other intangible assets, net

200,881

212,670

Other assets

251,926

228,713

Total assets

3,793,365

3,819,708

Liabilities and stockholders' equity

Liabilities:

Accrued salaries and bonuses

822,763

936,619

Accounts payable and accrued expenses

108,861

137,228

Operating lease liabilities

432,899

438,185

Other liabilities

181,950

132,799

Total liabilities

1,546,473

1,644,831

Stockholders' equity:

Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 54,573,369 and 53,822,189 shares, respectively

Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 15,564,859 and 16,021,106 shares, respectively

Additional paid-in capital

759,693

843,350

Retained earnings

1,516,154

1,394,738

Accumulated other comprehensive loss

(29,026

)

(63,281

)

Total stockholders’ equity

2,246,892

2,174,877

Total liabilities and stockholders’ equity

3,793,365

3,819,708

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

Three Months Ended September 30,

Six Months Ended September 30,

(In thousands, except share and per share data)

2025

2024

2025

2024

Revenues

659,452

574,957

1,264,801

1,088,566

Operating expenses:

Employee compensation and benefits

405,562

353,599

777,851

669,468

Acquisition related compensation and benefits

17,640

7,038

38,188

21,285

Travel, meals, and entertainment

15,168

13,570

35,155

32,082

Rent

17,750

15,174

35,979

34,458

Depreciation and amortization

10,303

7,444

26,293

16,300

Information technology and communications

16,704

17,755

34,516

33,944

Professional fees

10,321

9,677

21,993

18,154

Other operating expenses

14,663

20,031

35,790

36,638

Revaluation of acquisition contingent consideration

—

17,895

828

Total operating expenses

508,111

444,288

1,023,660

863,157

Operating income

151,341

130,669

241,141

225,409

Other (income) expense, net

(8,712

)

(5,419

)

(16,962

)

(10,553

)

Income before provision for income taxes

160,053

136,088

258,103

235,962

Provision for income taxes

48,272

42,539

48,789

53,473

Net income

111,781

93,549

209,314

182,489

Weighted average shares of common stock outstanding:

Basic

66,963,260

65,822,690

66,605,683

65,429,115

Fully diluted

68,591,031

68,422,600

68,760,543

68,450,866

Earnings per share

Basic

1.67

1.42

3.14

2.79

Fully diluted

1.63

1.37

3.04

2.67

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO ADJUSTED FINANCIAL INFORMATION

(UNAUDITED)

Three Months Ended September 30,

Six Months Ended September 30,

(In thousands, except share and per share data)

2025

2024

2025

2024

Revenues

659,452

574,957

1,264,801

1,088,566

Compensation expenses

Compensation expenses (GAAP)

423,202

360,637

816,039

690,753

Less: Acquisition related compensation and benefits

(17,640

)

(7,038

)

(38,188

)

(21,285

)

Compensation expenses (adjusted)

405,562

353,599

777,851

669,468

Non-compensation expenses

Non-compensation expenses (GAAP)

84,909

83,651

207,621

172,404

Less: Acquisition related legal structure reorganization

—

(705

)

(874

)

(1,205

)

Less: Integration and acquisition related costs

—

(3,554

)

Less: Acquisition amortization

(2,590

)

(2,067

)

(12,064

)

(5,608

)

Less: Revaluation of acquisition contingent consideration

—

(17,895

)

(828

)

Non-compensation expenses (adjusted)

82,319

80,879

176,788

161,209

Operating income

Operating income (GAAP)

151,341

130,669

241,141

225,409

Plus: Adjustments (1)

20,230

9,810

69,021

32,480

Operating income (adjusted)

171,571

140,479

310,162

257,889

Other (income) expense, net

Other (income) expense, net (GAAP)

(8,712

)

(5,419

)

(16,962

)

(10,553

)

Other (income) expense, net (adjusted)

(8,712

)

(5,419

)

(16,962

)

(10,553

)

Provision for income taxes

Provision for income taxes (GAAP)

48,272

42,539

48,789

53,473

Plus: Impact of the excess tax benefit for stock vesting

—

21,921

Less: Non-deductible acquisition related costs

(759

)

—

(2,053

)

—

Less: Reversal of deferred tax asset

—

(1,690

)

Adjusted provision for income taxes

47,513

42,539

46,736

73,704

Plus: Resulting tax impact (2)

6,005

3,071

5,619

10,145

Provision for income taxes (adjusted)

53,518

45,610

52,355

83,849

Net income

Net income (GAAP)

111,781

93,549

209,314

182,489

Plus: Adjustments (3)

14,984

6,739

65,455

2,104

Net income (adjusted)

126,765

100,288

274,769

184,593

Fully diluted shares outstanding

Fully diluted shares outstanding (GAAP)

68,591,031

68,422,600

68,760,543

68,450,866

Plus: Impact of unvested GCA retention and deferred share awards

313,996

458,865

349,380

532,840

Fully diluted shares outstanding (adjusted)

68,905,027

68,881,465

69,109,923

68,983,706

Fully diluted EPS (GAAP)

1.63

1.37

3.04

2.67

Fully diluted EPS (adjusted)

1.84

1.46

3.98

2.68

(1)

(2)

(3)