HOULIHAN LOKEY, INC. (HLI)

CIK: 0001302215. SIC: 6282 Investment Advice. Latest 10-K as of: 2026-05-22.

SIC breadcrumb: Finance, Insurance, And Real Estate > Security And Commodity Brokers, Dealers, Exchanges, And Services > SIC 6282 Investment Advice

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1302215. Latest filing source: 0001302215-26-000053.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-22. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001302215.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-22. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001302215.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001302215-26-000007.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-02-03. Report date: 2025-12-31.

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The following discussion should be read together with our consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. We make statements in this discussion that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “intends,” “predicts,” “potential” or “continue,” the negative of these terms or other similar expressions. These forward-looking statements, which are subject to risks, uncertainties, and assumptions about us, may include projections of our future financial performance, based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including but not limited to, the factors listed under the heading “Cautionary Note Regarding Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended March 31, 2025 (the “2025 Annual Report”). Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements speak only as of the date of this filing. You should not rely upon forward-looking statements as a prediction of future events. We are under no duty to, and we do not undertake any obligation to, update or review any of these forward-looking statements after the date of this filing to conform our prior statements to actual results or revised expectations whether as a result of new information, future developments or otherwise.

Key Financial Measures

Revenues

Revenues include fee revenues and reimbursements of expenses. Revenues are generated from our Corporate Finance (“CF”), Financial Restructuring (“FR”), and Financial and Valuation Advisory (“FVA”) business segments and primarily consist of fees for advisory services.

Revenues for all three business segments are recognized upon satisfaction of the performance obligation and may be satisfied over time or at a point in time. The amount and timing of the fees paid vary by the type of engagement. In general, advisory fees are paid at the time an engagement letter is signed (“Retainer Fees”), during the course of the engagement (“Progress Fees”), or upon the successful completion of a transaction or engagement (“Completion Fees”).

CF provides general financial advisory services and advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions, including financial sponsors, on a wide variety of matters, including buy-side and sell-side M&A transactions, debt and equity financings in both the private and public markets, and other corporate finance transactions. The majority of our CF revenues consists of Completion Fees. A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to Retainer Fees and in some cases Progress Fees that may have been received.

FR provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; liability management transactions; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The majority of our FR revenues consists of Completion Fees. Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees.

FVA primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties. Also, our FVA business segment provides dispute resolution services to clients, for which fees are usually based on the hourly rates of our financial professionals. The majority of our FVA revenues consists of Retainer Fees, Progress Fees and/or Completion Fees, which are recognized on the achievement of our performance obligations.

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Table of Contents

Operating Expenses

Our operating expenses are classified as compensation expense and non-compensation expenses; revenue and headcount are the primary drivers of our operating expenses. Reimbursements of certain out-of-pocket deal expenses are recorded on a gross basis and are therefore included in both Revenues and Operating expenses on the Consolidated Statements of Comprehensive Income.

Compensation Expenses. Our compensation expenses are comprised of employee compensation and benefits and acquisition related compensation and benefits expenses. Compensation expenses account for the majority of our operating expenses, and are determined by management based on revenues earned, headcount, the competitiveness of the prevailing labor market, and anticipated compensation expectations of our employees. These factors may fluctuate, and as a result, our compensation expenses may fluctuate materially in any particular period. Accordingly, the amount of compensation expenses recognized in any particular period may not be consistent with prior periods or indicative of future periods. In connection with certain acquisitions, certain employees may be entitled to deferred consideration, primarily in the form of retention payments, should certain service and/or performance conditions be met in the future. As a result of these conditions, such deferred consideration would be expensed as compensation in current and future periods and has been accrued as liabilities on the Consolidated Balance Sheets as of December 31, 2025 and March 31, 2025.

Compensation expenses consist of base salary, payroll taxes, benefits, annual incentive compensation payable as cash bonus awards, deferred cash bonus awards, and the amortization of equity-based bonus awards. Base salary and benefits are paid ratably throughout the year. Equity awards are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which typically occurs in the first quarter of each fiscal year; accordingly, expenses are amortized over the stated vesting period. In most circumstances, the unvested portion of these awards is subject to forfeiture should the employee depart from the Company, and in certain cases if certain financial metrics are not met. Certain annual equity-based bonus awards granted prior to December 31, 2024 include fixed share compensation awards and liability classified fixed dollar awards as a component of the annual bonus awards for certain employees. Cash bonuses, which are accrued monthly, are discretionary and dependent upon a number of factors including the Company's performance and are generally paid in the first quarter of each fiscal year with respect to prior year performance. Generally, a portion of the cash bonus is deferred and paid in the third quarter of the fiscal year in which the bonus is awarded.

We refer to the ratio of our compensation expenses to our revenues as our “Compensation Ratio.”

Non-Compensation Expense. The balance of our operating expenses includes costs for travel, meals and entertainment, rent, depreciation and amortization, information technology and communications, professional fees, other operating expenses, and gains and/or losses associated with changes in the fair value of earnout liabilities. We refer to all of these expenses as non-compensation expenses. A portion of our non-compensation expenses fluctuates in response to changes in headcount.

Other (Income) Expense, Net

Other (income) expense, net primarily includes interest income and gains earned on non-marketable and investment securities, cash and cash equivalents, loans receivable from affiliates, employee loans, and commercial paper.

Results of Consolidated Operations

The following is a discussion of our results of operations for the three and nine months ended December 31, 2025 and 2024.

Three Months Ended December 31,

Nine Months Ended December 31,

($ in thousands)

2025

2024

Change

2025

2024

Change

Revenues

$

717,072 

$

634,428 

13 

%

$

1,981,873 

$

1,722,994 

15 

%

Operating expenses:

Compensation

458,571 

402,971 

14 

%

1,274,610 

1,093,724 

17 

%

Non-compensation

97,771 

95,355 

3 

%

305,392 

267,759 

14 

%

Total operating expenses

556,342 

498,326 

12 

%

1,580,002 

1,361,483 

16 

%

Operating income

160,730 

136,102 

18 

%

401,871 

361,511 

11 

%

Other (income) expense, net

(8,918)

(9,016)

(1)

%

(25,880)

(19,569)

32 

%

Income before provision for income taxes

169,648 

145,118 

17 

%

427,751 

381,080 

12 

%

Provision for income taxes

53,100 

49,816 

7 

%

101,889 

103,289 

(1)

%

Net income

$

116,548 

$

95,302 

22 

%

$

325,862 

$

277,791 

17 

%

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Three Months Ended December 31, 2025 versus December 31, 2024

Revenues were $717.1 million for the three months ended December 31, 2025, compared with $634.4 million for the three months ended December 31, 2024, representing an increase of 13%. The increase in revenues was primarily driven by higher revenues from our CF and FR business segments, as described in further detail below.

Operating expenses were $556.3 million for the three months ended December 31, 2025, compared with $498.3 million for the three months ended December 31, 2024, representing an increase of 12%. Compensation expenses, as a component of operating expenses, were $458.6 million for the three months ended December 31, 2025, compared with $403.0 million for the three months ended December 31, 2024, representing an increase of 14%. The increase was primarily a result of an increase in revenues for the quarter when compared with the same quarter last year. The Compensation Ratio was 64.0% for the three months ended December 31, 2025, compared with 63.5% for the three months ended December 31, 2024. Non-compensation expense, as a component of operating expenses, was $97.8 million for the three months ended December 31, 2025, compared with $95.4 million for the three months ended December 31, 2024, representing an increase of 3%.

Other (income) expense, net was relatively flat at $(8.9) million for the three months ended December 31, 2025, compared with $(9.0)

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-05-22. Report date: 2026-03-31.

Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our historical financial statements and related notes included elsewhere in this Form 10-K. Actual results and the timing of events may differ significantly from those expressed or implied in any forward-looking statements due to a number of factors, including those set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” and elsewhere in this Form 10-K. For discussion related to changes in financial condition and the results of operations for fiscal year 2024-related items, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for fiscal year 2025, which was filed with the Securities and Exchange Commission on May 15, 2025.

Executive Overview

Established in 1972, Houlihan Lokey, Inc. is a leading global independent investment bank with expertise in mergers and acquisitions (“M&A”), capital markets, financial restructurings, liability management, and financial and valuation advisory services. We serve a diverse set of clients worldwide, including corporations, financial sponsors and government agencies. We provide our financial professionals with an integrated platform that enables them to deliver meaningful and differentiated advice to our clients. We advise our clients on critical strategic and financial decisions, employing a rigorous analytical approach coupled with deep product and industry expertise. We market our services through our product areas, our industry groups and our Financial Sponsors group, serving our clients in three business segments: Corporate Finance (“CF”), encompassing M&A and capital solutions; Financial Restructuring (“FR”), including restructurings both out-of-court and in formal bankruptcy or insolvency proceedings; and Financial and Valuation Advisory (“FVA”), including financial opinions and a variety of valuation and financial consulting services.

As of March 31, 2026, we employed more than 1,900 financial professionals, including 354 Managing Directors. We plan to continue to grow our firm across industry sectors, geographies and products to deliver quality advice and innovative solutions to our clients, both organically and through acquisitions.

We generate revenues primarily from providing advisory services on transactions that are subject to individually negotiated engagement letters that set forth our fees. A significant portion of our engagements include Progress Fees (as defined herein) and/or Completion Fees (as defined herein). The occurrence and timing of milestone-related payments, such as upon the closing of a transaction, are generally not within our control. Accordingly, revenue and net income in any period may not be indicative of full year results or the results of any other period and may vary significantly from year to year and quarter to quarter.

Corporate expenses represent expenses that are not allocated to individual business segments such as those relating to our executive management, accounting, information technology, legal and compliance, marketing, and human capital groups, including related compensation expense for corporate employees.

Business Environment and Outlook

Economic and global financial conditions can materially affect our operational and financial performance. See the section entitled “Risk Factors” for a discussion of some of the factors that can affect our performance.

Our fiscal year ends on March 31 of each year. For the fiscal year ended March 31, 2026, we earned revenues of $2.62 billion, an increase of 10% from the $2.39 billion earned during the fiscal year ended March 31, 2025.

For the fiscal years ended March 31, 2026, 2025, and 2024, we earned revenues of $842 million, $687 million, and $570 million, respectively, from our international operations.

Based on historical experience, we believe current economic conditions provide a relatively stable environment for M&A and capital markets activities, but the continued threat from elevated interest rates or inflation, international conflict, and international trade policies provide some level of uncertainty in the coming year. Our dialogue with clients who are evaluating strategic alternatives remains positive as they consider their options for liquidity even in the face of the uncertainty caused by the factors mentioned above.

Our Financial Restructuring activity also remains stable as a result of the factors mentioned above (elevated interest rates, global trade policy and conflict). We continue to see sustained levels of restructuring and liability management activity over the short to medium term due to elevated interest rates, record levels of company leverage, disruption in the software space, recent geopolitical events and global trade policy disruption.

Key Financial Measures

Revenues

Revenues include fee revenues and reimbursements of expenses (see Note 2 and Note 3 included in Part II, Item 8 of this Form 10-K). Revenues are generated from our CF, FR, and FVA business segments and primarily consist of fees for advisory services.

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Revenues for all three business segments are recognized upon satisfaction of the performance obligation and may be satisfied over time or at a point in time. The amount and timing of the fees paid vary by the type of engagement. In general, advisory fees are paid at the time an engagement letter is signed (“Retainer Fees”), during the course of the engagement (“Progress Fees”), or upon the successful completion of a transaction or engagement (“Completion Fees”).

CF provides general financial advisory services and advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions, including financial sponsors, on a wide variety of matters, including buy-side and sell-side M&A transactions, debt and equity financings in both the private and public markets, and other corporate finance transactions. The majority of our CF revenues consists of Completion Fees. A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to Retainer Fees and in some cases Progress Fees that may have been received.

FR provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; liability management transactions; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The majority of our FR revenues consists of Completion Fees. Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees.

FVA primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties. Also, our FVA business segment provides dispute resolution services to clients, for which fees are usually based on the hourly rates of our financial professionals. The majority of our FVA revenues consists of Retainer Fees, Progress Fees and/or Completion Fees.

Operating Expenses

Our operating expenses are classified as compensation expenses and non-compensation expenses; revenue and headcount are the primary drivers of our operating expenses. Reimbursements of certain out-of-pocket deal expenses are recorded on a gross basis and are therefore included in both Revenues and Operating expenses in the Consolidated Statements of Income.

Compensation Expenses. Our compensation expenses are comprised of employee compensation and benefits and acquisition related compensation and benefits expenses. Compensation expenses account for the majority of our operating expenses, and are determined by management based on revenues earned, headcount, the competitiveness of the prevailing labor market, and anticipated compensation expectations of our employees. These factors may fluctuate, and as a result, our compensation expenses may fluctuate materially in any particular period. Accordingly, the amount of compensation expenses recognized in any particular period may not be consistent with prior periods or indicative of future periods. In connection with certain acquisitions, certain employees may be entitled to deferred consideration, primarily in the form of retention payments, should certain service and/or performance conditions be met in the future. As a result of these conditions, such deferred consideration would be expensed as compensation in current and future periods and has been accrued as liabilities on the Consolidated Balance Sheets as of March 31, 2026 and 2025.

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Table of Contents

Employee compensation and benefits consist of base salary, payroll taxes, benefits, annual incentive compensation payable as cash bonus awards, deferred cash bonus awards, and the amortization of equity-based bonus awards. Base salary and benefits are paid ratably throughout the year. Equity awards are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which typically occurs in the first quarter of each fiscal year; accordingly, expenses are amortized over the stated vesting period. In most circumstances, the unvested portion of these awards is subject to forfeiture should the employee depart from the Company, and in certain cases if certain financial metrics are not met. Certain annual equity-based bonus awards granted prior to December 31, 2024 include fixed share compensation awards and liability classified fixed dollar awards as a component of the annual bonus awards for certain employees. Cash bonuses, which are accrued monthly, are discretionary and dependent upon a number of factors including the Company's performance, and are generally paid in the first quarter of each fiscal year with respect to prior year performance. Generally, a portion of the cash bonus is deferred and paid in the third quarter of the fiscal year in which the bonus is awarded.

We refer to the ratio of our compensation expenses to our revenues as our “Compensation Ratio.”

Non-Compensation Expenses. The balance of our operating expenses includes costs for travel, meals and entertainment, rent, depreciation and amortization, information technology and communications, professional fees, other operating expenses, and gains and/or losses associated with changes in the fair value of earnout liabilities. We refer to all of these expenses as non-compensation expenses. A portion of our non-compensation expenses fluctuates in response to changes in headcount.

Other (Income) Expense, Net

Other (income) expense, net primarily includes interest income and gains earned on non-marketable and investment securities, cash and cash equivalents, loans receivable from affiliates, employee loans, and commercial paper.

Results of Consolidated Operations

The following is a discussion of our results of operations for the years ended March 31, 2026 and 2025. For a more detailed discussion of the factors that affected the revenues and the operating expenses of our CF, FR, and FVA business segments in these periods, see “Business Segments” below.

Year Ended March 31,

Change

($ in thousands)

2026

2025

’25-’26

Revenues

$

2,617,516 

$

2,389,416 

10 

%

Operating expenses:

Compensation

1,683,391 

1,524,268 

10 

%

Non-compensation

407,106 

362,581 

12 

%

Total operating expenses

2,090,497 

1,886,849 

11 

%

Operating income

527,019 

502,567 

5 

%

Other (income) expense, net

(35,246)

(28,768)

23 

%

Income before provision for income taxes

562,265 

531,335 

6 

%

Provision for income taxes

138,091 

131,624 

5 

%

Net income

424,174 

399,711 

6 

%

Net income (loss) attributable to noncontrolling interest

1,523 

— 

100 

%

Net income attributable to Houlihan Lokey, Inc.

$

425,697 

$

399,711 

7 

%

Year Ended March 31, 2026 versus March 31, 2025

Revenues were $2.62 billion for the year ended March 31, 2026, compared with $2.39 billion for the year ended March 31, 2025, representing an increase of 10%. The increase in revenues was primarily the result of an increase in CF revenues, as described in further detail below.

Operating expenses were $2.09 billion for the year ended March 31, 2026, compared with $1.89 billion for the year ended March 31, 2025, an increase of 11%. Compensation expenses, as a component of operating expenses, was $1.68 billion for the year ended March 31, 2026, compared with $1.52 billion for the year ended March 31, 2025, an increase of 10%. The increase was primarily due to the increase in revenues for the fiscal year. The Compensation Ratio was 64% for both the years ended March 31, 2026 and 2025, respectively. Non-compensation expenses, as a component of operating expenses, were $407.1 million for the year ended March 31, 2026, compared with $362.6 million for the year ended March 31, 2025, an increase of 12%. The increase in non-compensation expenses was primarily a result of increases in revaluation of acquisition contingent consideration, travel, meals and entertainment, and information technology and communications expenses.

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Other (income) expense, net increased to $(35.2) million for the year ended March 31, 2026, compared with $(28.8) million for the year ended March 31, 2025. The increase in other (income) expense, net was primarily due to higher interest income.

The provision for income taxes for the year ended March 31, 2026 was $138.1 million, which reflected an effective tax rate of 25%. The provision for income taxes for the year ended March 31, 2025 was $131.6 million, which reflected an effective tax rate of 25%.

Business Segments

The following table presents revenues, expenses and profit from our business segments. The revenues by segment represent each segment’s revenues, and the profit by segment represents profit for each segment before corporate expenses, other (income) expense, net, and income taxes.

Year Ended March 31,

Change

($ in thousands)

2026

2025

’25-’26

Revenues by segment

Corporate Finance

$

1,744,634 

$

1,526,756 

14 

%

Financial Restructuring

528,655 

544,478 

(3)

%

Financial and Valuation Advisory

344,227 

318,182 

8 

%

Revenues

$

2,617,516 

$

2,389,416 

10 

%

Segment profit (1)

Corporate Finance

581,240 

474,423 

23 

%

Financial Restructuring

179,093 

209,306 

(14)

%

Financial and Valuation Advisory

93,582 

88,583 

6 

%

Total segment profit

853,915 

772,312 

11 

%

Corporate expenses (2)

326,896 

269,745 

21 

%

Other (income) expense, net

(35,246)

(28,768)

23 

%

Income before provision for income taxes

$

562,265 

$

531,335 

6 

%

Segment Metrics:

Number of Managing Directors (3)

Corporate Finance

251 

240

5 

%

Financial Restructuring

59 

57

4 

%

Financial and Valuation Advisory

44 

42

5 

%

Number of closed transactions/Fee Events (4)

Corporate Finance

644 

564

14 

%

Financial Restructuring

143 

145

(1)

%

Financial and Valuation Advisory

2,519 

2,441

3 

%

(1)We adjust the compensation expense for a business segment in situations where an employee residing in one business segment is performing work in another business segment where the revenues are accrued. Segment profit may vary significantly between periods depending on the levels of collaboration among the different segments.

(2)Corporate expenses include costs not allocated to individual segments, including certain acquisition related charges and share-based payments to corporate employees, as well as expenses of senior management and corporate departmental functions managed on a worldwide basis, including office of the executives, accounting, human capital, marketing, information technology, and legal and compliance.

(3)As of the end of the respective reporting period.

(4)Fee Events applicable to FVA only; a Fee Event includes any engagement that involves revenue activity during the measurement period with a revenue minimum of $1,000. References to closed transactions should be understood to be the same as transactions that are “effectively closed” as described in Note 2 of our Consolidated Financial Statements.

Corporate Finance

Year Ended March 31, 2026 Compared to the Year Ended March 31, 2025

Revenues for CF were $1.74 billion for the year ended March 31, 2026, compared with $1.53 billion for the year ended March 31, 2025, representing an increase of 14%. The increase in revenues was primarily due to an increase in the number of closed transactions during the period, which was driven by favorable market conditions.

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Segment profit for CF was $581 million for the year ended March 31, 2026, compared with $474 million for the year ended March 31, 2025, representing an increase of 23%. The increase in segment profit was primarily a result of higher revenues when compared to the same period last year.

Financial Restructuring

Year Ended March 31, 2026 Compared to the Year Ended March 31, 2025

Revenues for FR were $529 million for the year ended March 31, 2026, compared with $544 million for the year ended March 31, 2025, representing a decrease of (3)%. The decrease in revenues was primarily due to a decrease in the number of closed transactions, which was driven by less favorable market conditions for restructuring.

Segment profit for FR was $179 million for the year ended March 31, 2026, compared with $209 million for the year ended March 31, 2025, a decrease of (14)%. The decrease in segment profit was primarily a result of lower revenues and higher compensation expenses as a percentage of revenue when compared to the same period last year.

Financial and Valuation Advisory

Year Ended March 31, 2026 Compared to the Year Ended March 31, 2025

Revenues for FVA were $344 million for the year ended March 31, 2026, compared with $318 million for the year ended March 31, 2025, an increase of 8%. The increase in revenues was primarily due to an increase in the average fee per Fee Event, driven by improvements in the M&A markets.

Segment profit for FVA was $94 million for the year ended March 31, 2026, compared with $89 million for the year ended March 31, 2025, representing an increase of 6%. The increase in segment profit was primarily a result of higher revenues.

Corporate Expenses

Year Ended March 31, 2026 Compared to the Year Ended March 31, 2025

Corporate expenses were $327 million for the year ended March 31, 2026, compared with $270 million for the year ended March 31, 2025, representing an increase of 21%. The increase in corporate expenses was driven primarily by increased compensation expense and increased revaluation of acquisition contingent consideration when compared to the same period last year.

Liquidity and Capital Resources

Our current assets are primarily comprised of cash and cash equivalents, investment securities, accounts receivable, and unbilled work in progress related to fees earned from providing advisory services. Our current liabilities are primarily comprised of accrued salaries and bonuses and accounts payable and accrued expenses.

Our cash and cash equivalents include cash held at banks. We maintain moderate levels of cash on hand in support of regulatory requirements for our registered broker-dealer. As of March 31, 2026 and 2025, we had $860 million and $686 million of cash and cash equivalents in foreign subsidiaries, respectively. Our excess cash may be invested in short-term investments, including treasury securities, commercial paper, certificates of deposit, and investment grade corporate debt securities. Please refer to Note 6 for further detail.

As of March 31, 2026 and 2025, our cash and cash equivalents and investment securities were as follows:

(In thousands)

March 31, 2026

March 31, 2025

Cash and cash equivalents

$

1,189,454 

$

971,007 

Investment securities

170,271 

195,624 

Total unrestricted cash and cash equivalents and investment securities

$

1,359,725 

$

1,166,631 

As of each fiscal year end, a material portion of our cash and cash equivalents is reserved to cover accrued bonuses that are paid the following May and November.

Our liquidity is highly dependent upon cash receipts from clients that are generally dependent upon the successful completion of transactions as well as the timing of receivables collections, which typically occur within 60 days of billing. As of March 31, 2026, accounts receivable, net of allowance for credit losses was $228 million. As of March 31, 2026, Unbilled work in progress, net of allowance for credit losses was $271 million.

Subsequent to the end of fiscal 2026, our board of directors declared a quarterly cash dividend of $0.70 per share of common stock, payable on June 15, 2026 to shareholders of record as of the close of business on June 1, 2026.

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On August 23, 2019, the Company entered into a syndicated revolving line of credit with Bank of America, N.A. and certain other financial institutions party thereto, which was amended by the First Amendment to Credit Agreement dated as of August 2, 2022, and further amended by the Second Amendment to Credit Agreement on August 19, 2025 (as amended, the "HLI Line of Credit"). The HLI Line of Credit allows for borrowings of up to $150 million (and, subject to certain conditions, provides the Company with an uncommitted expansion option, which, if exercised in full, would provide for a total credit facility of $200 million) and matures on August 19, 2030 (or if such date is not a business day, the immediately preceding business day). Borrowings under the HLI Line of Credit bear interest at a floating rate, which can be either, at the Company's option, (i) a term Secured Overnight Financing Rate ("SOFR") plus a 0.95% margin per annum or (ii) a base rate, which is the highest of (a) the Federal Funds Rate plus one-half of one percent (0.50%), (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) a term SOFR rate plus a 1.00% margin. Commitment fees apply to unused amounts. The HLI Line of Credit contains certain financial covenants and other restrictions, including a financial loan covenant to maintain a consolidated leverage ratio of less than 2.00 to 1.00. As of March 31, 2026, we were, and expect to continue to be, in compliance with such covenants. As of March 31, 2026, no principal was outstanding under the HLI Line of Credit.

The majority of the Company's payment obligations and commitments pertain to routine operating leases. The Company also has various obligations, including notes payable and contingent consideration issued in connection with businesses previously acquired (see Note 10 included in Part II, Item 8 of this Form 10-K).

Cash Flows

Our operating cash flows are primarily influenced by the amount and timing of receipt of advisory fees and the payment of operating expenses, including payments of incentive compensation to our employees. We pay a significant portion of our incentive compensation during the first and third quarters of each fiscal year. A summary of our operating, investing, and financing cash flows is as follows:

Year Ended March 31,

(In thousands)

2026

2025

Operating activities:

Net income

$

424,174 

$

399,711 

Non-cash charges

282,029 

252,823 

Other operating activities

(2,072)

196,075 

Net cash provided by operating activities

704,131 

848,609 

Net cash provided by/(used in) investing activities

2,176 

(265,058)

Net cash used in financing activities

(492,944)

(329,070)

Effects of exchange rate changes on cash and cash equivalents

4,926 

(756)

Net increase in cash, cash equivalents, and restricted cash

218,289 

253,725 

Cash, cash equivalents, and restricted cash – beginning of period

975,579 

721,854 

Cash, cash equivalents, and restricted cash – end of period

$

1,193,868 

$

975,579 

Year Ended March 31, 2026

Operating activities resulted in a net cash inflow of $704.1 million, primarily due to net income reflecting the strong business performance. Investing activities resulted in a net inflow of $2.2 million, primarily attributable to sales or maturities of investment securities, largely offset by purchases of investment securities and capital expenditures. Financing activities resulted in a net outflow of $(492.9) million, primarily attributable to share repurchases, dividends paid, and payments made to settle employee tax obligations on share-based awards.

Year Ended March 31, 2025

Operating activities resulted in a net cash inflow of $848.6 million, primarily attributable to net income, non-cash charges, and changes in our operating assets and liabilities. Investing activities resulted in a net outflow of $(265.1) million, primarily attributable to purchases of investment securities and cash consideration transferred in connection with business acquisitions. Financing activities resulted in a net outflow of $(329.1) million, primarily attributable to dividends paid, payments to settle employee tax obligations on share-based awards, and share repurchases.

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Critical Accounting Policies and Estimates

We believe that the critical accounting policies and practices included below are both most important to the portrayal of the Company's financial condition and results, and require management's most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. For a discussion of these and other significant accounting policies and their impact on our consolidated financial statements, see Note 2 included in Part II, Item 8 of this Form 10-K.

The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period for which they are determined to be necessary.

Recognition of Revenue

CF provides general financial advisory services and advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions, including financial sponsors, on a wide variety of matters, including buy-side and sell-side M&A transactions, debt and equity financings in both the private and public markets, and other corporate finance transactions. The majority of our CF revenues consists of Completion Fees. A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to Retainer Fees and in some cases Progress Fees that may have been received.

FR provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; liability management transactions; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The majority of our FR revenues consists of Completion Fees. Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees.

FVA primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties. Also, our FVA business segment provides dispute resolution services to clients, for which fees are usually based on the hourly rates of our financial professionals. The majority of our FVA revenues consists of Retainer Fees, Progress Fees and/or Completion Fees.

See Note 2 and Note 3 included in Part II, Item 8 of this Form 10-K for additional information.

Business Combinations

Accounting for business combinations requires management to make significant estimates and assumptions to determine the fair value of assets acquired and liabilities assumed. Our most critical estimates in this area involve the valuation of contingent consideration, both at the time of acquisition and subsequently through the earn out period. The fair value of these instruments is determined using valuation models that require highly subjective management judgment regarding future performance. Key assumptions include, but are not limited to, projected revenues, backlog realization, and discount rates. These estimates are inherently uncertain and highly sensitive to changes in economic conditions and business performance. Changes in underlying assumptions to our contingent consideration liabilities can cause volatility in our earnings, resulting in potentially material recognized gains or losses.

Recent Accounting Developments

For additional information on recently issued accounting developments and their impact or potential impact, if applicable, on our consolidated financial statements, see Note 2 included in Part II, Item 8 of this Form 10-K.

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