Houlihan Lokey Reports Second Quarter Fiscal 2027 Financial Results

Quarterly diluted earnings per share increased despite lower net income, while first-half revenue and earnings remained below prior-year levels.

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– Second Quarter Fiscal 2027 Revenues of $692 million –
– Second Quarter Fiscal 2027 Diluted EPS of $1.64 –
– Adjusted Second Quarter Fiscal 2027 Diluted EPS of $1.85 –
– Announces Dividend of $0.70 per Share for Third Quarter Fiscal 2027 –

LOS ANGELES--(BUSINESS WIRE)-- Houlihan Lokey, Inc. (NYSE:HLI) (“Houlihan Lokey” or the “Company”) today reported financial results for its second quarter ended September 30, 2026.

For the second quarter ended September 30, 2026, revenues were $692 million, compared with $660 million for the second quarter ended September 30, 2025.

Net income attributable to Houlihan Lokey, Inc. was $109 million, or $1.64 per diluted share, for the second quarter ended September 30, 2026, compared with $111 million, or $1.63 per diluted share, for the second quarter ended September 30, 2025. Adjusted net income attributable to Houlihan Lokey, Inc. was $124 million, or $1.85 per diluted share, for the second quarter ended September 30, 2026, compared with $127 million, or $1.84 per diluted share, for the second quarter ended September 30, 2025.

“Improving market conditions resulted in a stronger second quarter,” stated Scott Adelson, Chief Executive Officer of Houlihan Lokey. “While we remain cautious due to the volatility of external factors, we expect to see solid performance across our businesses for the remainder of the year.”

Selected Financial Data

(In millions, except per share data)	U.S. GAAP
	Three Months Ended September 30,								Six Months Ended September 30,
	2026				2025				2026				2025
Revenues by segment
Corporate Finance	$	481			$	439			$	784			$	837
Financial Restructuring		118				134				237				262
Financial and Valuation Advisory		93				87				182				166
Revenues		692				660				1,203				1,265
Operating expenses:
Compensation		441				423				769				816
Non-compensation		97				86				202				208
Operating income		154				151				232				241
Other (income) expense, net		(5	)			(9	)			(13	)			(17	)
Income before provision for income taxes		159				160				245				258
Provision for income taxes		49				49				57				49
Net income		110				111				188				209
Net (income) loss attributable to noncontrolling interest		(1	)			—				(1	)			—
Net income attributable to Houlihan Lokey, Inc.	$	109			$	111			$	187			$	209
Diluted earnings per share attributable to Houlihan Lokey, Inc.	$	1.64			$	1.63			$	2.78			$	3.04

Revenues

For the second quarter ended September 30, 2026, revenues were $692 million, compared with $660 million for the second quarter ended September 30, 2025. For the second quarter ended September 30, 2026, Corporate Finance (“CF”) revenues increased 10%, Financial Restructuring (“FR”) revenues decreased (12)%, and Financial and Valuation Advisory (“FVA”) revenues increased 7%, in each case, when compared with the second quarter ended September 30, 2025.

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) (1)
	Three Months Ended September 30,
($ in millions)	2026				2025				2026				2025
Expenses:
Compensation	$	441			$	423			$	426			$	406
% of Revenues (2)		63.7	%			64.2	%			61.5	%			61.5	%
Non-compensation	$	97			$	86			$	91			$	83
% of Revenues (2)		14.0	%			12.9	%			13.3	%			12.5	%
Provision for income taxes	$	49			$	49			$	54			$	53
% of Pre-tax income (2)		30.6	%			30.2	%			30.0	%			29.7	%

	U.S. GAAP								Adjusted (Non-GAAP) (1)
	Six Months Ended September 30,
($ in millions)	2026				2025				2026				2025
Expenses:
Compensation	$	769			$	816			$	740			$	778
% of Revenues (2)		63.9	%			64.5	%			61.5	%			61.5	%
Non-compensation	$	202			$	208			$	191			$	177
% of Revenues (2)		16.8	%			16.4	%			15.9	%			14.0	%
Provision for income taxes	$	57			$	49			$	67			$	52
% of Pre-tax income (2)		23.3	%			18.9	%			23.6	%			16.0	%

(1)		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.
(2)		The percentages are presented as calculated; therefore, they may not recalculate precisely due to rounding.

Compensation expenses were $441 million for the second quarter ended September 30, 2026, compared with $423 million for the second quarter ended September 30, 2025. This resulted in a compensation ratio of 63.7% for the second quarter ended September 30, 2026, compared with 64.2% for the second quarter ended September 30, 2025. Adjusted compensation expenses were $426 million for the second quarter ended September 30, 2026, compared with $406 million for the second quarter ended September 30, 2025. This resulted in an adjusted compensation ratio of 61.5% for both the second quarter ended September 30, 2026 and the second quarter ended September 30, 2025. The increase in GAAP and adjusted compensation expenses was primarily a result of an increase in revenues for the quarter when compared with the same quarter last year.

Non-compensation expenses were $97 million for the second quarter ended September 30, 2026, compared with $86 million for the second quarter ended September 30, 2025. Adjusted non-compensation expenses were $91 million for the second quarter ended September 30, 2026, compared with $83 million for the second quarter ended September 30, 2025. The increase in GAAP and adjusted non-compensation expenses was primarily a result of an increase in rent expense and other operating expenses when compared with the same quarter last year.

The effective tax rate was 30.6% for the second quarter ended September 30, 2026, compared with 30.2% for the second quarter ended September 30, 2025. The adjusted effective tax rate was 30.0% for the second quarter ended September 30, 2026, compared with 29.7% for the second quarter ended September 30, 2025.

Segment Reporting for the Second Fiscal Quarter

Corporate Finance

CF revenues were $481 million for the second quarter ended September 30, 2026, compared with $439 million for the second quarter ended September 30, 2025. Revenues increased due to an increase in the average transaction fee on closed transactions, which was driven by transaction mix and improved market conditions for M&A and capital markets transactions. This increase was partially offset by a decline in the number of closed transactions, which we believe does not represent a trend.

	Three Months Ended September 30,						Six Months Ended September 30,
($ in millions)	2026			2025			2026			2025
Corporate Finance
Revenues	$	481		$	439		$	784		$	837
# of Managing Directors (1)		267			242			267			242
# of Closed transactions (2)		142			171			269			296

Financial Restructuring

FR revenues were $118 million for the second quarter ended September 30, 2026, compared with $134 million for the second quarter ended September 30, 2025. Revenues decreased primarily due to a decrease in the number of closed transactions, driven by timing of transaction closings. This was partially offset by an increase in the average transaction fee on closed transactions, driven by transaction mix, which we believe does not represent a trend.

	Three Months Ended September 30,						Six Months Ended September 30,
($ in millions)	2026			2025			2026			2025
Financial Restructuring
Revenues	$	118		$	134		$	237		$	262
# of Managing Directors (1)		57			58			57			58
# of Closed transactions (2)		27			37			50			72

Financial and Valuation Advisory

FVA revenues were $93 million for the second quarter ended September 30, 2026, compared with $87 million for the second quarter ended September 30, 2025. Revenues increased due to growth in our non-cyclical businesses.

	Three Months Ended September 30,						Six Months Ended September 30,
($ in millions)	2026			2025			2026			2025
Financial and Valuation Advisory
Revenues	$	93		$	87		$	182		$	166
# of Managing Directors (1)		46			45			46			45
# of Fee Events (2)		1,071			1,075			1,554			1,517

(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.

Other Announcements

The Board of Directors of the Company declared a regular quarterly cash dividend of $0.70 per share of Class A and Class B common stock. The dividend will be payable on December 15, 2026 to stockholders of record as of the close of business on December 1, 2026. Also, during the second quarter ended September 30, 2026, the Company repurchased 397 thousand shares as part of its share repurchase program. As of September 30, 2026, the Company had $888 million of 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, October 28, 2026, to discuss its second quarter fiscal 2027 results. The number to call is 1-844-501-1995 (domestic) or 1-412-317-5180 (international). 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 28, 2026 through November 4, 2026, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the passcode 10212286. 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,” “indicates,” “suggests,” “sees,” “will,” 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

As a supplement to our financial measures presented in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company presents certain adjusted (non-GAAP) measures of financial performance. These non-GAAP financial measures are not intended to be considered in isolation from, as a substitute for, or as more important than, the financial information prepared and presented in accordance with GAAP. In addition, these non-GAAP measures have limitations in that they do not reflect all of the items associated with the Company’s results of operations as determined in accordance with GAAP.

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 financial and operating performance. The non-GAAP financial measures exclude the following items, as applicable in any given reporting period:

• certain acquisition related costs, including (1) acquisition related deferred retention payments, which may be settled in cash or common stock of the Company; (2) amortization of intangible assets recognized in purchase accounting; (3) fair value remeasurements of acquisition-related contingent consideration; and (4) other integration and acquisition related costs, including asset write offs or impairments;
• legal and other professional fees associated with the simplification of our legal entity structure that has resulted from acquisitions;
• the income tax adjustments associated with the non-tax adjustments above, determined by applying the tax rates in effect in the jurisdictions for which the non-tax adjustment relates; and
• significant discrete tax related items, including (1) acquisition-related costs which are non-deductible for income tax purposes and (2) other unusual or unique tax-related items and activities.

In the future, the Company may also consider whether other items should also be excluded in calculating the non-GAAP financial measures used by the Company.

These non-GAAP measures facilitate comparison of operating performance between periods and help investors to understand our underlying operating results by excluding certain items that may not be indicative of the Company’s core business, operating results, or future outlook. We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that could affect an understanding of our ongoing financial and business performance or trends. Internally, management uses these non-GAAP financial measures, along with GAAP financial measures, in assessing 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 additional descriptions 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.”

We encourage investors to review our GAAP financial statements and other regulatory filings for a comprehensive understanding of 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 millions, except par value)	September 30, 2026				March 31, 2026
Assets:
Cash and cash equivalents	$	837			$	1,189
Investment securities		51				170
Accounts receivable, net of allowance for credit losses		285				228
Unbilled work in progress, net of allowance for credit losses		267				271
Property and equipment, net		148				143
Operating lease right-of-use assets		410				407
Goodwill		1,471				1,396
Other intangible assets, net		212				204
Other assets		294				301
Total assets	$	3,975			$	4,309
Liabilities, temporary equity and stockholders' equity
Liabilities:
Accrued salaries and bonuses	$	775			$	1,077
Accounts payable and accrued expenses		102				136
Operating lease liabilities		494				492
Other liabilities		186				151
Total liabilities		1,557				1,856
Redeemable noncontrolling interest		111				111
Stockholders' equity:
Class A common stock, $0.001 par value. Authorized 1,000 shares; issued and outstanding 54.0 and 54.2 shares, respectively		—				—
Class B common stock, $0.001 par value. Authorized 1,000 shares; issued and outstanding 15.4 and 15.3 shares, respectively		—				—
Additional paid-in capital		631				746
Retained earnings		1,726				1,645
Accumulated other comprehensive loss		(50	)			(49	)
Total stockholders’ equity		2,307				2,342
Total liabilities, temporary equity and stockholders’ equity	$	3,975			$	4,309

HOULIHAN LOKEY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
	Three Months Ended September 30,								Six Months Ended September 30,
(In millions, except per share amounts)	2026				2025				2026				2025
Revenues	$	692			$	660			$	1,203			$	1,265
Operating expenses:
Employee compensation and benefits		426				406				740				778
Acquisition related compensation and benefits		15				17				29				38
Travel, meals, and entertainment		17				15				36				35
Rent		22				18				43				36
Depreciation and amortization		10				10				18				26
Information technology and communications		19				17				38				35
Professional fees		10				10				27				22
Other operating expenses		19				16				40				36
Revaluation of acquisition contingent consideration		—				—				—				18
Total operating expenses		538				509				971				1,024
Operating income		154				151				232				241
Other (income) expense, net		(5	)			(9	)			(13	)			(17	)
Income before provision for income taxes		159				160				245				258
Provision for income taxes		49				49				57				49
Net income		110				111				188				209
Net (income) loss attributable to noncontrolling interest		(1	)			—				(1	)			—
Net income attributable to Houlihan Lokey, Inc.	$	109			$	111			$	187			$	209
Weighted average shares of common stock outstanding:
Basic		66.6				67.0				66.6				66.6
Fully diluted		67.0				68.6				67.3				68.8
Earnings per share
Basic	$	1.64			$	1.67			$	2.81			$	3.14
Fully diluted	$	1.64			$	1.63			$	2.78			$	3.04

HOULIHAN LOKEY, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO ADJUSTED FINANCIAL INFORMATION
(UNAUDITED)
	Three Months Ended September 30,								Six Months Ended September 30,
(In millions, except per share data)	2026				2025				2026				2025
Revenues	$	692			$	660			$	1,203			$	1,265
Compensation expenses
Compensation expenses (GAAP)	$	441			$	423			$	769			$	816
Less: Acquisition related compensation and benefits (1)		(15	)			(17	)			(29	)			(38	)
Compensation expenses (adjusted)		426				406				740				778
Non-compensation expenses
Non-compensation expenses (GAAP)	$	97			$	86			$	202			$	208
Less: Acquisition related legal structure reorganization (2)		—				—				—				(1	)
Less: Integration and acquisition related costs (3)		(3	)			—				(6	)			—
Less: Acquisition amortization (4)		(3	)			(3	)			(5	)			(12	)
Less: Revaluation of acquisition contingent consideration (5)		—				—				—				(18	)
Non-compensation expenses (adjusted)		91				83				191				177
Operating income
Operating income (GAAP)	$	154			$	151			$	232			$	241
Plus: Adjustments (6)		21				20				40				69
Operating income (adjusted)		175				171				272				310
Other (income) expense, net
Other (income) expense, net (GAAP)	$	(5	)		$	(9	)		$	(13	)		$	(17	)
Other (income) expense, net (adjusted)		(5	)			(9	)			(13	)			(17	)
Provision for income taxes
Provision for income taxes (GAAP)	$	49			$	49			$	57			$	49
Less: Non-deductible acquisition related costs (7)		—				(1	)			—				(2	)
Adjusted provision for income taxes		49				48				57				47
Plus: Resulting tax impact (8)		5				5				10				5
Provision for income taxes (adjusted)		54				53				67				52
Net (income) loss attributable to noncontrolling interest
Net (income) loss attributable to noncontrolling interest (GAAP)	$	(1	)		$	—			$	(1	)		$	—
Less: Impact of adjustments on noncontrolling interest, net of tax (9)		(1	)			—				(2	)			—
Net (income) loss attributable to noncontrolling interest (adjusted)		(2	)			—				(3	)			—
Net income attributable to Houlihan Lokey, Inc.
Net income attributable to Houlihan Lokey, Inc. (GAAP)	$	109			$	111			$	187			$	209
Plus: Adjustments (10)		15				16				28				66
Net income attributable to Houlihan Lokey, Inc. (adjusted)	$	124			$	127			$	215			$	275
Fully diluted shares outstanding
Fully diluted shares outstanding (GAAP)		67.0				68.6				67.3				68.8
Plus: Impact of unvested GCA retention and deferred share awards		—				0.3				—				0.3
Fully diluted shares outstanding (adjusted)		67.0				68.9				67.3				69.1
Fully diluted EPS (GAAP)	$	1.64			$	1.63			$	2.78			$	3.04
Fully diluted EPS (adjusted)	$	1.85			$	1.84			$	3.20			$	3.98

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)		Reflects acquisition-related costs which are non-deductible for income tax purposes.
(8)		Reflects the tax impact of the non-tax adjustments identified above.
(9)		Reflects the impact of adjustments attributable to the noncontrolling interest, net of tax.
(10)		Consists of all adjustments identified above, net of the associated tax impact.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20261028372736/en/

Investor Relations
+1 212.331.8225
IR@HL.com

Media Relations
+1 212.331.8223
PR@HL.com

Source: Houlihan Lokey, Inc.

Key Terms

non-gaap financial

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

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form 10-k regulatory

A Form 10-K is a comprehensive report that publicly traded companies are required to file annually with regulators. It provides a detailed overview of a company's financial health, operations, and risks, similar to a detailed health report. Investors use this information to assess the company's performance and make informed decisions about buying or selling its stock.

m&a financial

M&A, short for mergers and acquisitions, involves one company combining with or purchasing another company to grow, streamline operations, or gain competitive advantages. For investors, M&A activity can signal potential for increased value, new opportunities, or changes in market dynamics, making it an important factor to watch in the business landscape.

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noncontrolling interest financial

The portion of a business owned by investors other than the controlling owner when one company has control of another; it represents outside shareholders’ share of the subsidiary’s assets and profits. For investors, it matters because those outside claims reduce the amount of profit and net assets attributable to the parent owner — similar to saying part of a pizza belongs to someone else — and thus affects earnings, book value and valuation.