Hamilton Lane (NASDAQ: HLNE) grows revenue, EPS and secures major Guardian private equity mandate
Filing Impact
Filing Sentiment
Form Type
10-Q
Rhea-AI Filing Summary
Hamilton Lane Incorporated reported solid growth for the quarter ended December 31, 2025, with total revenues rising to $198,589,000 from $168,261,000 and net income attributable to Hamilton Lane increasing to $58,372,000 from $52,972,000 a year earlier. Management and advisory fees grew to $153,177,000, driven mainly by specialized funds and customized separate accounts, while incentive fees increased to $45,412,000. Diluted earnings per Class A share improved to $1.37 from $1.32, and dividends declared per Class A share rose to $0.54 from $0.49.
The company ended the quarter with total assets of $2,170,813,000, cash and cash equivalents of $338,504,000 and total equity of $1,326,051,000. Operating cash flow was strong at $321,944,000 for the nine months, supporting higher retained earnings and continued dividend payments.
Hamilton Lane also executed several notable transactions, including amending its 2022 multi-draw term loan, selling a consolidated fund for $92,278,000 in cash, and entering a long-term strategic partnership with Guardian involving management of a nearly $5 billion private equity portfolio and planned annual commitments of approximately $500,000,000 over 10 years, supported by a warrant for up to 400,000 Class A shares.
Positive
- None.
Negative
- None.
Insights
Revenue and earnings grew, backed by strong cash flow and a sizable new strategic mandate.
Hamilton Lane delivered higher quarterly revenues of
Fee-related fundamentals look supportive: management and advisory fees reached
The new long-term partnership with Guardian adds a defined growth stream, with oversight of a nearly
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended December 31, 2025
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _______________________ to ___________________________
Commission File Number 001-38021
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||||||||||||||
(610 ) 934-2222
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||||||||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| x | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: As of February 2, 2026, there were 43,938,664 shares of the registrant’s Class A common stock, par value $0.001, and 11,836,450 shares of the registrant’s Class B common stock, par value $0.001, outstanding.
Table of Contents
| Page | |||||
PART I - FINANCIAL INFORMATION | |||||
Item 1. Financial Statements | 4 | ||||
Condensed Consolidated Balance Sheets as of December 31, 2025 and March 31, 2025 | 4 | ||||
Condensed Consolidated Statements of Income for the three and nine months ended December 31, 2025 and 2024 | 5 | ||||
Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended December 31, 2025 and 2024 | 7 | ||||
Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2025 and 2024 | 9 | ||||
Notes to Condensed Consolidated Financial Statements | 11 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 30 | ||||
Item 3. Quantitative and Qualitative Disclosures about Market Risk | 54 | ||||
Item 4. Controls and Procedures | 55 | ||||
PART II - OTHER INFORMATION | |||||
Item 1. Legal Proceedings | 57 | ||||
Item 1A. Risk Factors | 57 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 57 | ||||
Item 5. Other Information | 57 | ||||
Item 6. Exhibits | 58 | ||||
Signatures | 60 | ||||
This Quarterly Report on Form 10-Q (“Form 10-Q”) includes certain information regarding the historical performance of our specialized funds and customized separate accounts. An investment in shares of our Class A common stock is not an investment in our specialized funds or customized separate accounts. In considering the performance information relating to our specialized funds and customized separate accounts contained herein, current and prospective Class A common stockholders should bear in mind that the performance of our specialized funds and customized separate accounts is not indicative of the possible performance of shares of our Class A common stock and is also not necessarily indicative of the future results of our specialized funds or customized separate accounts, even if fund investments were in fact liquidated on the dates indicated, and there can be no assurance that our specialized funds or customized separate accounts will continue to achieve, or that future specialized funds and customized separate accounts will achieve, comparable results. Please note that nothing in this Form 10-Q represents an offer to sell, or a solicitation of an offer to purchase, interests in any of Hamilton Lane’s products.
We own or have a license to the trademarks, service marks or trade names that we use in connection with the operation of our business. In addition, our trade names, logos and website names and URL addresses are owned by us or have been licensed to us. We also own or have a license to the copyrights that protect the content of our solutions. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this Form 10-Q are listed without the ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks, trade names and copyrights.
This Form 10-Q may include trademarks, service marks or trade names of other companies. Our use or display of other parties’ trademarks, service marks, trade names or products is not intended to, and does not imply a relationship with, or endorsement or sponsorship of us by, the trademark, service mark or trade name owners.
Unless otherwise indicated or the context otherwise requires, all references in this Form 10-Q to “we,” “us,” “our,” the “Company,” “Hamilton Lane” and similar terms refer to Hamilton Lane Incorporated and its consolidated subsidiaries. As used in this Form 10-Q, (i) the term “HLA” refers to Hamilton Lane Advisors, L.L.C. and (ii) the terms “Hamilton Lane Incorporated” and “HLI” refer solely to Hamilton Lane Incorporated, a Delaware corporation, and not to any of its subsidiaries.
Available Information
Our website is located at www.hamiltonlane.com, and the Shareholders page of our website is located at https://shareholders.hamiltonlane.com. We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and file or furnish reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, statements of changes in beneficial ownership and amendments to those reports are available for free on the Shareholders page of our website as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC. We also make certain corporate governance documents available on the Shareholders page of our website, including board committee charters and our code of conduct and ethics. In addition, the SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
We webcast our earnings calls and certain events we participate in or host with members of the investment community on the Shareholders page of our website. We may use our website (www.hamiltonlane.com), including pages therein related to our various strategies and funds, and LinkedIn account as channels of distribution of Company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases as part of the Shareholders page of our website. Investors and others can receive notifications of new information posted on the Shareholders page of our website in real time by subscribing to email alerts.
The contents of our website are not incorporated by reference into this Form 10-Q or in any other report or document we file with the SEC, and any references to our website are intended to be inactive textual references only.
Cautionary Note Regarding Forward-Looking Information
Some of the statements in this Form 10-Q may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. Words such as “will,” “expect,” “believe,” “estimate,” “continue,” “anticipate,” “intend,” “plan” and similar expressions, or the negative version of these words or other comparable words, are intended to identify these forward-looking statements. Forward-looking statements discuss management’s current expectations and projections relating to our financial position, results of operations, plans, objectives, future performance and business. All forward-looking statements are subject to known and unknown risks, uncertainties and other important factors that may cause actual results to be materially different, including, risks relating to: the historical performance of our investments may not be indicative of future results or future returns on our Class A common stock; our
2
ability to identify suitable investment opportunities for our clients; intense competition in our industry, including competition for access to investments and for customized separate account and advisory clients; customized separate account and advisory account fee revenue is not a long-term contracted source of revenue; our ability to appropriately deal with conflicts of interest; our ability to retain our senior management team and attract additional qualified investment professionals; our ability to expand our business and formulate new business strategies; our ability to manage our obligations under our debt agreements; volatile market, economic and geopolitical conditions, which can adversely affect our business and the investments made by our funds or accounts; defaults by clients and third-party investors on their obligations to fund commitments; our ability to comply with the investment guidelines set by our clients; the exercise of redemption or repurchase rights by investors in certain of our funds; extensive government regulation, compliance failures and changes in law or regulation could adversely affect us; our ability to maintain our desired fee structure; failure to maintain the security of our information technology networks, or those of our third-party service providers, or data security breaches; our only material asset is our interest in Hamilton Lane Advisors, L.L.C., and we are accordingly dependent upon distributions from such entity to pay dividends, taxes and other expenses.
The foregoing list of factors is not exhaustive and should be read in conjunction with the other cautionary statements that are included herein and in our other periodic filings. For more information regarding these risks and uncertainties as well as additional risks we face, you should refer to the “Risk Factors” detailed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (our “2025 Form 10-K”) and in our subsequent reports filed from time to time with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. The forward-looking statements included in this Form 10-Q are made only as of the date we filed this report. We undertake no obligation to update or revise any forward-looking statement as a result of new information or future events, except as otherwise required by law.
3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Hamilton Lane Incorporated
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share and per share amounts)
| December 31, 2025 | March 31, 2025 | ||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Fees receivable | |||||||||||
| Prepaid expenses | |||||||||||
| Due from related parties | |||||||||||
| Furniture, fixtures and equipment, net | |||||||||||
| Lease right-of-use assets, net | |||||||||||
| Investments | |||||||||||
| Deferred income taxes | |||||||||||
| Other assets | |||||||||||
| Assets of Consolidated Funds and Partnerships: | |||||||||||
| Cash and cash equivalents | |||||||||||
| Investments | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and equity | |||||||||||
| Accounts payable | |||||||||||
| Accrued compensation and benefits | |||||||||||
| Accrued members’ distributions | |||||||||||
| Accrued dividend | |||||||||||
| Debt | |||||||||||
| Payable to related parties pursuant to tax receivable agreement | |||||||||||
| Lease liabilities | |||||||||||
Other liabilities (includes $ | |||||||||||
| Liabilities of Consolidated Funds and Partnerships: | |||||||||||
| Subscriptions in advance | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | $ | $ | |||||||||
| Commitments and contingencies (Note 15) | |||||||||||
Class A common stock, $ | |||||||||||
Class B common stock, $ | |||||||||||
| Additional paid-in-capital | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ||||||||||
| Retained earnings | |||||||||||
| Total Hamilton Lane Incorporated stockholders’ equity | $ | $ | |||||||||
| Non-controlling interests in Partnerships | |||||||||||
| Non-controlling interests in Hamilton Lane Advisors, L.L.C. | |||||||||||
| Non-controlling interests in Consolidated Funds | |||||||||||
| Total equity | $ | $ | |||||||||
| Total liabilities and equity | $ | $ | |||||||||
4
Hamilton Lane Incorporated
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Management and advisory fees | $ | $ | $ | $ | |||||||||||||||||||
| Incentive fees | |||||||||||||||||||||||
| Consolidated Funds and Partnerships: | |||||||||||||||||||||||
| Incentive fees | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Compensation and benefits | |||||||||||||||||||||||
| General, administrative and other | |||||||||||||||||||||||
| Consolidated Funds and Partnerships: | |||||||||||||||||||||||
| General, administrative and other | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Equity in income of investees | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Non-operating gain, net | |||||||||||||||||||||||
| Consolidated Funds and Partnerships: | |||||||||||||||||||||||
| Equity in income of investees | |||||||||||||||||||||||
| Net gain on investments | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Total other income (expense) | |||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: Income attributable to non-controlling interests in Partnerships | |||||||||||||||||||||||
| Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C. | |||||||||||||||||||||||
| Less: Income attributable to non-controlling interests in Consolidated Funds | |||||||||||||||||||||||
| Net income attributable to Hamilton Lane Incorporated | $ | $ | $ | $ | |||||||||||||||||||
| Basic earnings per share of Class A common stock | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per share of Class A common stock | $ | $ | $ | $ | |||||||||||||||||||
| Dividends declared per share of Class A common stock | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
5
Hamilton Lane Incorporated
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
(In thousands)
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income, net of tax | |||||||||||||||||||||||
Foreign currency translation | ( | ||||||||||||||||||||||
| Total other comprehensive income, net of tax | $ | ( | $ | $ | $ | ||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Comprehensive income attributable to non-controlling interests in Partnerships | |||||||||||||||||||||||
| Comprehensive income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C. | |||||||||||||||||||||||
| Comprehensive income attributable to non-controlling interests in Consolidated Funds | |||||||||||||||||||||||
| Total comprehensive income attributable to Hamilton Lane Incorporated | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
6 | ||||||||
Hamilton Lane Incorporated
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands)
| Class A Common Stock | Class B Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-Controlling Interests in Partnerships | Non-Controlling Interests in Hamilton Lane Advisors, L.L.C. | Non-Controlling Interests in Consolidated Funds | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Warrant vesting | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Purchase and retirement of Class A stock for tax withholding | — | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Deferred tax adjustment | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Capital (distributions to) contributions from non-controlling interests, net | — | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||
Member distributions | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Secondary Offering | — | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Employee Share Purchase Plan share issuance | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Equity reallocation between controlling and non-controlling interests | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-Controlling Interests in Partnerships | Non-Controlling Interests in Hamilton Lane Advisors, L.L.C. | Non-Controlling Interests in Consolidated Funds | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Purchase and retirement of Class A stock for tax withholding | — | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Capital contributions from non-controlling interests, net | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Member distributions | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Employee Share Purchase Plan share issuance | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Equity reallocation between controlling and non-controlling interests | — | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
7 | ||||||||
Hamilton Lane Incorporated
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands)
| Class A Common Stock | Class B Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-Controlling Interests in Partnerships | Non-Controlling Interests in Hamilton Lane Advisors, L.L.C. | Non-Controlling Interests in Consolidated Funds | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | ( | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Warrant vesting | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Purchase and retirement of Class A stock for tax withholding | — | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Deferred tax adjustment | — | — | ( | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Capital (distributions to) contributions from non-controlling interests, net | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Member distributions | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Employee Share Purchase Plan share issuance | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity reallocation between controlling and non-controlling interests | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | Class B Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-Controlling Interests in Partnerships | Non-Controlling Interests in Hamilton Lane Advisors, L.L.C. | Non-Controlling Interests in Consolidated Funds | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2024 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Purchase and retirement of Class A stock for tax withholding | — | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Capital contributions from non-controlling interests, net | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Member distributions | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Employee Share Purchase Plan share issuance | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Equity reallocation between controlling and non-controlling interests | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
8 | ||||||||
Hamilton Lane Incorporated
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| Nine Months Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Change in deferred income taxes | |||||||||||
| Change in payable to related parties pursuant to tax receivable agreement | ( | ( | |||||||||
| Equity-based compensation | |||||||||||
| Equity in income of investees | ( | ( | |||||||||
| Net realized gain on sale of investments | ( | ||||||||||
| Fair value adjustment of other investments | ( | ( | |||||||||
| Proceeds received from Funds | |||||||||||
| Non-cash lease expense | |||||||||||
| Other | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Fees receivable | ( | ||||||||||
| Prepaid expenses | ( | ||||||||||
| Due from related parties | ( | ( | |||||||||
| Other assets | |||||||||||
| Accounts payable | ( | ||||||||||
| Accrued compensation and benefits | |||||||||||
| Lease liability | ( | ( | |||||||||
| Other liabilities | ( | ||||||||||
| Consolidated Funds and Partnerships: | |||||||||||
| Cash relinquished from deconsolidation of Fund | ( | ||||||||||
| Net gain on investments | ( | ( | |||||||||
| Equity in income of investees | ( | ( | |||||||||
| Change in other assets and liabilities | ( | ||||||||||
| Net cash provided by operating activities | $ | $ | |||||||||
| Investing activities: | |||||||||||
| Purchase of furniture, fixtures and equipment | $ | ( | $ | ( | |||||||
| Purchase of investments and convertible notes | ( | ( | |||||||||
| Proceeds from sale of investments | |||||||||||
| Net proceeds from sale of Consolidated Fund | |||||||||||
| Proceeds from sale of intangible assets | |||||||||||
| Distributions received from Funds | |||||||||||
| Contributions to Funds | ( | ( | |||||||||
| Consolidated Funds and Partnerships: | |||||||||||
| Purchase of investments | ( | ( | |||||||||
| Distributions received from investments | |||||||||||
| Cash from consolidating Funds | |||||||||||
| Net cash used in investing activities | $ | ( | $ | ( | |||||||
9 | ||||||||
Hamilton Lane Incorporated
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| Nine Months Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Financing activities: | |||||||||||
| Proceeds from offering | $ | $ | |||||||||
| Purchase of membership interests | ( | ||||||||||
| Borrowings of debt, net of deferred financing costs | |||||||||||
| Repayments of long-term debt | ( | ( | |||||||||
| Repurchase of Class A common stock for employee tax withholding | ( | ( | |||||||||
| Proceeds received from issuance of shares under Employee Share Purchase Plan | |||||||||||
| Payments to related parties, pursuant to tax receivable agreement | ( | ||||||||||
| Dividends paid | ( | ( | |||||||||
| Members’ distributions paid | ( | ( | |||||||||
| Consolidated Funds and Partnerships: | |||||||||||
| Contributions from non-controlling interests in Partnerships | |||||||||||
| Distributions to non-controlling interests in Partnerships | ( | ( | |||||||||
| Contributions from non-controlling interests in Consolidated Funds | |||||||||||
| Net cash provided by financing activities | $ | $ | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | |||||||||||
| Increase in cash and cash equivalents, restricted cash, and cash and cash equivalents held at Consolidated Funds and Partnerships | |||||||||||
| Cash and cash equivalents, restricted cash, and cash and cash equivalents held at Consolidated Funds and Partnerships at beginning of the period | |||||||||||
| Cash and cash equivalents, restricted cash, and cash and cash equivalents held at Consolidated Funds and Partnerships at end of the period | $ | $ | |||||||||
| Reconciliation of Cash and Cash Equivalents, Restricted Cash and Cash and Cash Equivalents Held at Consolidated Funds and Partnerships to the Condensed Consolidated Balance Sheets: | |||||||||||
As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Cash and cash equivalents held at Consolidated Funds and Partnerships | |||||||||||
| Total cash and cash equivalents, restricted cash, and cash and cash equivalents held at Consolidated Funds and Partnerships | $ | $ | |||||||||
See accompanying notes to the condensed consolidated financial statements.
10 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
1. Organization
Hamilton Lane Incorporated (“HLI”) was incorporated in the State of Delaware on December 31, 2007 and, following its 2017 initial public offering, is a holding company whose principal asset is a controlling equity interest in Hamilton Lane Advisors, L.L.C. (“HLA”). As the sole managing member of HLA, HLI operates and controls all of the business and affairs of HLA, and, through HLA, conducts its business. As a result, HLI consolidates HLA’s financial results and reports a non-controlling interest (“NCI”) related to the portion of HLA units not owned by HLI. The assets and liabilities of HLA represent substantially all of HLI’s consolidated assets and liabilities with the exception of certain cash, certain deferred tax assets and liabilities, payables to related parties pursuant to a tax receivable agreement, and dividends payable. Unless otherwise specified, “the Company” refers to the consolidated entity of HLI, HLA and subsidiaries throughout the remainder of these notes. As of December 31, 2025 and March 31, 2025, HLI held approximately 77.3 % and 76.6 %, respectively, of the economic interest in HLA. As future exchanges of HLA units occur pursuant to the exchange agreement, the economic interest in HLA held by HLI will increase.
HLA is a registered investment advisor with the United States Securities and Exchange Commission (“SEC”), providing asset management and advisory services to design, build and manage private markets portfolios. HLA generates revenues primarily from management and advisory fees, comprised of specialized fund and customized separate account management fees, advisory and reporting fees and distribution management fees and, to a lesser extent, incentive fees, comprised of carried interest earned from our specialized funds and certain customized separate accounts structured as single-client funds in which the Company has a general partner commitment, and performance fees earned on certain other specialized funds and customized separate accounts. HLA sponsors the formation, and serves as the general partner, managing member and/or investment manager, of various specialized funds and certain single client separate account entities (“Funds”) that acquire interests in third-party managed investment funds that make private markets and related investments or otherwise invest directly in such investments. The Company, which includes certain subsidiaries that serve as the general partner or managing member of the Funds, may invest its own capital in the Funds and generally makes all investment and/or operating decisions for the Funds. HLA operates several wholly owned entities through which it conducts its foreign operations.
2. Summary of Significant Accounting Policies
Basis of Presentation
11 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
Consolidation
The Company consolidates general partnerships and subsidiaries that are wholly owned. Additionally, the Company consolidates Funds (“Consolidated Funds”) and general partner entities that are not wholly-owned (“Partnerships”) over which it exercises control either by holding majority voting interests or as the primary beneficiary, possessing both decision making authority and the right to receive economic benefits. The Consolidated Funds and Partnerships are included in the Company’s consolidated financial statements. The portion of the Consolidated Funds and Partnerships owned by third parties is presented as non-controlling interests in the Condensed Consolidated Balance Sheets and income attributable to non-controlling interests in the Condensed Consolidated Statements of Income.
The assets of the Partnerships represent investments in Funds and the assets of the Consolidated Funds generally represent cash and investments. The assets may only be used to settle obligations of the respective Consolidated Fund or Partnership, if any. In addition, there is no recourse to the Company for the consolidated liabilities, except for certain entities in which there could be a clawback of previously distributed carried interest. Once the Company no longer qualifies as the primary beneficiary or holds a majority voting interest, it deconsolidates all the assets and liabilities of the respective Partnership or Consolidated Fund from the Condensed Consolidated Balance Sheets and records any remaining interest in the entity using the equity method within investments in the Condensed Consolidated Balance Sheets.
At each reporting date, the Company determines whether any reconsideration events have occurred that require it to revisit the consolidation analysis and will consolidate or deconsolidate accordingly.
See Note 6 for additional disclosures on variable interest entities (“VIE”).
Accounting for Differing Fiscal Periods
The Funds primarily have a fiscal year end as of December 31, and the Company accounts for its investments in the Funds using a three-month lag due to the timing of financial information received from the investments held by the Funds. The Funds primarily invest in private equity funds, which generally require at least 90 days following the calendar year end to present audited financial statements.
The results of the Consolidated Funds are reported on a three-month lag, due to the timing of the receipt of related financial statements.
The Company records its share of capital contributions to and distributions from the Funds in investments in the Condensed Consolidated Balance Sheets during the three-month lag period.
The Company’s revenue earned from Funds, including both management and advisory fee revenue and incentive fee revenue, is not accounted for on a lag.
12
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
Fair Value of Financial Instruments
The Company utilizes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach, and cost approach). The levels of the hierarchy are described below:
•Level 1: Values are determined using quoted market prices for identical financial instruments in an active market.
•Level 2: Values are determined using quoted prices for similar financial instruments and valuation models whose inputs are observable.
•Level 3: Values are determined using pricing models that use significant inputs that are primarily unobservable, discounted cash flow methodologies or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
The Company uses these levels of hierarchy to measure the fair value of certain financial instruments on a recurring basis, such as for investments; on a non-recurring basis, such as for acquisitions and impairment testing; for disclosure purposes, such as for long-term debt; and for other applications, as discussed in their respective notes.
Categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. For a portion of the Company's investments, net asset value per share (“NAV”) (or its equivalent) is utilized to measure fair value. These investments are considered investment companies, or are the equivalent of investment companies, as they carry all investments at fair value, with unrealized gains and losses resulting from changes in fair value reflected in earnings. Investments valued using NAV are excluded from the fair value hierarchy. See Note 5 for further information.
Segments
Financial information, annual operational plans and forecasts are reviewed by the chief operating decision makers (“CODM”) at the consolidated entity level. Consolidated net income is the primary measure of performance used by the CODM to establish objectives and allocate resources, with compensation and benefits being reviewed in more detail as a significant expense. Segment profit and loss is presented in the Condensed Consolidated Statements of Income, with additional detail provided in Note 10 relating to the significant expenses reviewed by the CODM. The measure of segment assets is not regularly presented to the CODM.
Recent Accounting Pronouncements
In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06 - Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. The amendments in this ASU incorporate 14 of the 27 disclosure requirements published in SEC Release No. 33-10532 - Disclosure Update and Simplification into various topics within the Accounting Standards Codification. The amendments represent clarifications to, or technical corrections of, current requirements. For SEC registrants, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. Early adoption is prohibited. The amendments will be applied retrospectively to all prior periods presented in the condensed consolidated financial statements. The Company is currently assessing the impact of the new requirements.
13
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, on a prospective basis, with early adoption permitted. The Company did not early adopt this standard and will reflect the impact of the new requirements in the current annual financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220): Reporting Comprehensive Income - Income-Expense Disaggregation Disclosures, which requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the financial statements. The amendments in this ASU will be effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently assessing the impact of the new requirements.
In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share‑Based Consideration Payable to a Customer, which requires entities that issue share‑based consideration to a customer within the scope of Topic 606 to apply the share‑based payment guidance in Topic 718 to measure and classify such awards and clarifies how vesting conditions and expected forfeitures affect the timing and amount of the related reduction of revenue. The amendments in this ASU will be effective for annual periods (including interim periods within annual periods) beginning after December 15, 2026. Early adoption is permitted and is effective on either a modified retrospective or a retrospective basis. The Company elected to early adopt retrospectively during the three months ended December 31, 2025. The adoption of ASU 2025‑04 did not impact prior periods.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), which modernizes accounting guidance for internal-use software costs. The updated standard reflects current development practices, including agile methodologies, by removing references to “development stages” and clarifying that capitalization begins when management authorizes and commits to funding for a software project, and it is probable the project will be completed and perform its intended function as intended. ASU 2025-06 is effective for annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently assessing the impact of the new requirements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements, which requires entities that present interim financial statements in accordance with U.S. GAAP to follow clarified guidance on the form, content, and required disclosures of those interim financial statements, including disclosure of events since the end of the last annual reporting period that have a material impact on the entity. The amendments in this ASU will be effective for interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently assessing the impact of the new requirements.
Reclassifications
In the Investing Activities portion of the Condensed Consolidated Statements of Cash Flows, the Company reclassified Purchase of convertible notes and Purchase of investments into Purchase of Convertible notes and investments, to conform to the current year presentation.There was no impact to prior period amounts reported in our Consolidated Balance Sheets.
14
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
3. Revenue
The following tables present revenues disaggregated by product offering, which aligns with the identified performance obligations and the basis for calculating each amount:
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| Management and advisory fees | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Specialized funds | $ | $ | $ | $ | |||||||||||||||||||
| Customized separate accounts | |||||||||||||||||||||||
| Advisory | |||||||||||||||||||||||
| Reporting, monitoring, data and analytics | |||||||||||||||||||||||
| Distribution management | |||||||||||||||||||||||
| Fund reimbursement revenue | |||||||||||||||||||||||
| Total management and advisory fees | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| Incentive fees | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Specialized funds | $ | $ | $ | $ | |||||||||||||||||||
| Customized separate accounts | |||||||||||||||||||||||
| Consolidated funds and partnerships | |||||||||||||||||||||||
| Specialized funds | |||||||||||||||||||||||
| Total incentive fees | $ | $ | $ | $ | |||||||||||||||||||
Strategic Partnership
On November 2, 2025, the Company entered into a long-term strategic partnership (the “Guardian Transaction”) with The Guardian Life Insurance Company of America (“Guardian”). Through this partnership the Company will oversee Guardian’s existing private equity portfolio and future commitments to private equity for the next 10 years. On December 31, 2025, the Company issued a warrant related to a maximum of 400,000 shares of its Class A common stock (the “Warrant”) to Guardian in a private placement transaction.
On December 31, 2025, the Company recognized an asset of $8,367 recorded in other assets in the Condensed Consolidated Balance Sheets, associated with the Warrant shares that were vested and exercisable upon issuance, subject to clawback provisions. The asset along with the remaining fair market value of the Warrant will be recognized as a reduction of management fee revenue over the contract performance period as the Company provides the related asset management services.
15 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
4. Investments
Investments consist of the following:
| December 31, 2025 | March 31, 2025 | ||||||||||
| Equity method investments in Funds | $ | $ | |||||||||
| Other equity method investments | |||||||||||
| Fair value investments | |||||||||||
| Measurement alternative investments | |||||||||||
| Total investments | $ | $ | |||||||||
Investments of Consolidated Funds and Partnerships consist of the following:
| December 31, 2025 | March 31, 2025 | ||||||||||
| Equity method investments in Funds | $ | $ | |||||||||
| Fair value investments | |||||||||||
Total Investments of Consolidated Funds and Partnerships | $ | $ | |||||||||
Equity method investments
The Company’s equity method investments in Funds represent its ownership in certain specialized funds and customized separate accounts. The strategies and geographic location of investments vary by Fund. The Company has a 1 % interest in substantially all of the Funds. The Company’s other equity method investments represent its ownership in a technology company to develop an AI-powered investment assistant for private markets.
Fair value investments
The Company’s fair value investments represent investments held by Consolidated Funds and investments in private equity funds and direct credit and equity investments that are held as collateral on the Company’s secured financing. The private equity fund investments can only be redeemed through distributions received from the liquidation of underlying investments of the fund, and the timing of distributions is currently indeterminable. The cost of the assets held as collateral was $4,635 and $5,079 as of December 31, 2025 and March 31, 2025, respectively. Unrealized gains and losses from investments held by Consolidated Funds are recorded in net gain on investments in the Condensed Consolidated Statements of Income.
The Company accounts for its secured financing at fair value under the fair value option. The primary reason for electing the fair value option is to mitigate volatility in earnings from using different measurement attributes. The significant input to the fair value of the secured financing is the fair value of the fair value investments delivered as collateral which are estimated using Level 3 inputs with the significant inputs as shown in Note 5 below.
The Company recognized losses of $188 and $1,036 on fair value investments held as collateral during the three and nine months ended December 31, 2025, respectively, and a loss of $236 and a gain of $101 during the three and nine months ended December 31, 2024, respectively, that are recorded in non-operating gain, net. The Company recognized gains of $188 and $1,036 on the secured financing liability during the three and nine months ended December 31, 2025 respectively, and a gain of $236 and a loss of $101 during the three and nine months ended December 31, 2024, respectively, that are recorded in non-operating gain, net in the Condensed Consolidated Statements of Income.
16 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
The Company recognized no gain or loss and a gain of $25 on fair value investments held by Consolidated Funds during the three and nine months ended December 31, 2025, respectively, and gains of $28 and $21 during the three and nine months ended December 31, 2024, respectively, that are recorded in net gain on investments in the Condensed Consolidated Statements of Income.
Measurement Alternative Investments
The following table summarizes the activity related to the Company’s measurement alternative investments:
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Carrying amount beginning of the period | $ | $ | $ | $ | |||||||||||||||||||
| Adjustments related to equity investments: | |||||||||||||||||||||||
| Purchases | |||||||||||||||||||||||
Net change in unrealized gain(1) | |||||||||||||||||||||||
| Carrying amount, end of period | $ | $ | $ | $ | |||||||||||||||||||
(1) Net change in unrealized gain consists of fair value adjustments for observable price changes of identical or similar investments.
The following table summarizes the cumulative gross unrealized gains and cumulative gross unrealized losses related to the Company’s measurement alternative investments:
| December 31, 2025 | March 31, 2025 | ||||||||||
| Cumulative gross unrealized gains | $ | $ | |||||||||
| Cumulative gross unrealized losses | $ | ( | $ | ( | |||||||
5. Fair Value Measurements
The following tables summarize the Company’s financial assets and financial liabilities recorded at fair value by fair value hierarchy level:
As of December 31, 2025 | |||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | NAV(1) | Total | |||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||
Fair value investments | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
| Consolidated Funds | |||||||||||||||||||||||||||||
| Fair value investments | |||||||||||||||||||||||||||||
| Total financial assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||
Secured financing(2) | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
| Total financial liabilities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
17 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
As of March 31, 2025 | |||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | NAV(1) | Total | |||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||
Fair value investments | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
| Consolidated Funds | |||||||||||||||||||||||||||||
| Fair value investments | |||||||||||||||||||||||||||||
| Total financial assets | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||
Secured financing(2) | $ | $ | $ | $ | — | $ | |||||||||||||||||||||||
| Total financial liabilities | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(1) The fair value amounts presented in this column are intended to permit reconciliation of the fair value hierarchy to the amounts presented in Note 4.
(2) Secured financing is recorded within other liabilities in the Condensed Consolidated Balance Sheets.
The following table lists information regarding all investments recorded at estimated fair value based upon the NAV:
| Fair Value | Unfunded Commitment | ||||||||||
| Direct investment funds | $ | $ | |||||||||
| Secondary funds | |||||||||||
| $ | $ | ||||||||||
The investments valued under NAV can only be redeemed through distributions received from the liquidation of the underlying investments, and the timing of distributions is currently indeterminable.
The following is a reconciliation of fair value investments for which significant unobservable inputs (Level 3) were used in determining value:
| Private equity funds | Direct equity investments | Total investments | |||||||||||||||
Balance as of September 30, 2025 | $ | $ | $ | ||||||||||||||
| Distributions | ( | ( | ( | ||||||||||||||
| Net loss | ( | ( | ( | ||||||||||||||
Balance as of December 31, 2025 | $ | $ | $ | ||||||||||||||
Balance as of March 31, 2025 | $ | $ | $ | ||||||||||||||
| Contributions | |||||||||||||||||
| Distributions | ( | ( | ( | ||||||||||||||
| Net gain (loss) | ( | ( | |||||||||||||||
Balance as of December 31, 2025 | $ | $ | $ | ||||||||||||||
18 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
| Private equity funds | Direct equity investments | Total investments | |||||||||||||||
Balance as of September 30, 2024 | $ | $ | $ | ||||||||||||||
| Distributions | ( | ( | |||||||||||||||
| Net loss | ( | ( | |||||||||||||||
Balance as of December 31, 2024 | $ | $ | $ | ||||||||||||||
Balance as of March 31, 2024 | $ | $ | $ | ||||||||||||||
| Distributions | ( | ( | |||||||||||||||
| Net (loss) gain | ( | ||||||||||||||||
Balance as of December 31, 2024 | $ | $ | $ | ||||||||||||||
The following is a reconciliation of investments held by the Company’s Consolidated Funds and Partnerships for which significant unobservable inputs (Level 3) were used in determining value:
| Direct equity investments | |||||
Balance as of September 30, 2025 | $ | ||||
| Contributions | |||||
Transfer out (1) | ( | ||||
Balance as of December 31, 2025 | $ | ||||
Balance as of March 31, 2025 | $ | ||||
| Contributions | |||||
| Net gain | |||||
Transfer out(1) (2) | ( | ||||
Balance as of December 31, 2025 | $ | ||||
(2)Transfer out relates to a change in valuation approach on an equity investment from Level 3 to NAV practical expedient based upon the availability of information.
| Direct credit investments | ||||||||
Balance as of September 30, 2024 | $ | |||||||
| Contributions | ||||||||
| Distributions | ( | |||||||
| Net gain | ||||||||
Balance as of December 31, 2024 | $ | |||||||
Balance as of March 31, 2024 | $ | |||||||
| Contributions | ||||||||
| Distributions | ( | |||||||
| Net gain | ||||||||
Transfer out (1) | ( | |||||||
Balance as of December 31, 2024 | $ | |||||||
(1)Transfer out relates to deconsolidation of a previously consolidated fund entity which held Level 3 investments.
19 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
The valuation methodologies, significant unobservable inputs, range of inputs and the weighted average input determined based upon relative fair value of the investments used in recurring Level 3 fair value measurements of assets were as follows, as of December 31, 2025:
| Significant | |||||||||||||||||||||||||||||||||||
| Fair | Valuation | Unobservable | Weighted | ||||||||||||||||||||||||||||||||
| Value | Methodology | Inputs | Range | Average | |||||||||||||||||||||||||||||||
Private equity funds | $ | Adjusted NAV | Selected market return | - | |||||||||||||||||||||||||||||||
Direct equity investments | $ | Adjusted NAV | Selected market return | - | |||||||||||||||||||||||||||||||
| Investments held by Consolidated Funds | |||||||||||||||||||||||||||||||||||
| Direct equity investments | $ | Recent precedent transactions | |||||||||||||||||||||||||||||||||
For the significant unobservable inputs listed in the table above a significant increase or decrease in the selected market return would result in a significantly higher or lower fair value measurement, respectively.
6. Variable Interest Entities
The Company holds variable interests in entities that are considered VIEs because limited partners lack the ability to remove the general partner or dissolve the entity without cause by simple majority vote (i.e., do not have substantive “kick out” or “liquidation” rights). The Company’s variable interest in such entities is in the form of direct equity interests in the Funds in which it also serves as the general partner or managing member. In the Company’s role as general partner or managing member, it generally considers itself the sponsor of the applicable Funds and makes all investment and operating decisions. The Company consolidates VIEs in which it is determined that the Company is the primary beneficiary.
Consolidated Variable Interest Entities
The following table presents the assets and liabilities of consolidated VIEs that are included in the Condensed Consolidated Balance Sheets.
| December 31, 2025 | March 31, 2025 | ||||||||||
Assets of Consolidated Funds and Partnerships: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Investments | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
Liabilities of Consolidated Funds and Partnerships: | |||||||||||
| Subscriptions in advance | $ | $ | |||||||||
| Other liabilities | |||||||||||
| Total liabilities | $ | $ | |||||||||
Non-consolidated Variable Interest Entities
Certain Funds that are VIEs are not consolidated because the Company has determined it is not the primary beneficiary based upon the Company’s equity interest percentage in each of the applicable VIEs. As
20 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
of December 31, 2025, the total remaining unfunded commitments to the non-consolidated VIEs was $165,147 . Investor commitments are the primary source of financing for the non-consolidated VIEs.
The maximum exposure to loss represents the potential loss of assets recognized by the Company relating to these non-consolidated VIEs. The Company believes that its maximum exposure to loss is limited because it establishes separate limited liability or limited partnership entities to serve as the general partner or managing member of the Funds.
The carrying value of assets and liabilities recognized in the Condensed Consolidated Balance Sheets related to the Company’s interests in these non-consolidated VIEs and the Company’s maximum exposure to loss relating to non-consolidated VIEs were as follows:
| December 31, 2025 | March 31, 2025 | ||||||||||
| Investments | $ | $ | |||||||||
| Fees receivable | |||||||||||
| Due from related parties | |||||||||||
| Total VIE Assets | |||||||||||
| Less: Non-controlling interests | ( | ( | |||||||||
| Maximum exposure to loss | $ | $ | |||||||||
7. Debt
The Company’s debt consisted of the following:
As of December 31, 2025 | As of March 31, 2025 | ||||||||||||||||||||||||||||||||||
| Principal Outstanding | Carrying Value | Interest Rate | Principal Outstanding | Carrying Value | Interest Rate | ||||||||||||||||||||||||||||||
| Term Loan | $ | $ | % | $ | $ | % | |||||||||||||||||||||||||||||
| 2020 Multi-Draw Facility | % | % | |||||||||||||||||||||||||||||||||
| Senior Notes | % | % | |||||||||||||||||||||||||||||||||
| Total Debt | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
The carrying value of the Company’s Term Loan with JPMorgan Chase Bank, N.A. as of December 31, 2025 and March 31, 2025 approximated fair value. The 2020 multi-draw facility had an estimated fair value of $94,712 and $99,305 as of December 31, 2025 and March 31, 2025, respectively. The Company’s 5.28 % Senior Notes due October 15, 2029 had an estimated fair value of $96,903 and $99,222 as of December 31, 2025 and March 31, 2025, respectively. The estimated fair value of debt is based on then-current market rates for similar debt instruments and is classified as Level 2 within the fair value hierarchy.
On October 1, 2025, we amended our existing 2022 Multi-Draw Term Loan Agreement. The amendment included a decrease in the aggregate principal amount available to be borrowed from $75,000 to $50,000 , changed dates related to principal and interest payments and changed interest rates for borrowings to the greater of the prime rate minus 1.35 % or 3.00 %. As of December 31, 2025 we did not have an outstanding balance under the 2022 Multi-Draw Term Loan Agreement.
21 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
8. Equity
The following table shows a rollforward of the Company’s common stock outstanding since March 31, 2025:
| Class A Common Stock | Class B Common Stock | ||||||||||
| March 31, 2025 | |||||||||||
| Shares issued (repurchased) in connection with offerings | ( | ||||||||||
| Awards granted | |||||||||||
| Shares issued pursuant to Employee Share Purchase Plan | |||||||||||
| Forfeitures | ( | ||||||||||
| Shares repurchased for employee tax withholdings | ( | ||||||||||
| December 31, 2025 | |||||||||||
September 2025 Offering
In September 2025, the Company and a selling stockholder completed a registered offering of an aggregate of 528,705 shares of Class A common stock at a price to the underwriter of $146.51 per share (the “September 2025 Offering”). The shares sold consisted of 150,000 shares held by the selling stockholder and 378,705 shares newly issued by the Company. The Company received $55,484 in net proceeds from the sale of its shares and used all of the proceeds to settle exchanges of a total of 341,962 Class B units and 36,743 Class C units by certain members of HLA. In connection with the exchange of the Class B units, the Company also repurchased for par value and canceled a corresponding number of shares of Class B common stock. The Company did not receive any proceeds from the sale of shares by the selling stockholder.
Warrant Instrument
In connection with the Guardian Transaction, the Company issued the Warrant allowing for purchases of up to 400,000 shares of Class A common stock, with a grant date fair value of $19,618 . The Warrant will expire on February 29, 2036. The Company accounts for the Warrant as equity as it is indexed to the Company’s common stock and can only be settled in cash at the Company’s election.
Upon issuance, 150,000 shares with a weighted average exercise price of $131.56 per share became exercisable. The remaining shares will vest evenly over a 10 year period subject to minimum annual contract commitments.
The fair value of the Warrant was estimated using a Black-Scholes valuation method using the following assumptions:
| Closing share price as of grant date | $ | ||||
| Weighted average exercise price | $ | ||||
| Risk Free Rate | % | ||||
| Dividend rate | % | ||||
Volatility (1) | % | ||||
| Expected term | |||||
(1)The Company estimates expected volatility based on the historic volatility of its own Class A common stock.
22 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
9. Equity Based Compensation
Restricted Stock Awards
A summary of restricted stock activity for the nine months ended December 31, 2025 is presented below:
| Total Unvested | Weighted- Average Grant-Date Fair Value of Award | ||||||||||
| March 31, 2025 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | |||||||||
| Forfeited | ( | $ | |||||||||
| December 31, 2025 | $ | ||||||||||
As of December 31, 2025, total unrecognized compensation expense related to restricted stock awards was $40,847 .
Performance Awards
The Company grants performance stock awards to certain employees that are subject to both a market-based vesting and a service-based vesting condition (“Performance Awards”). Holders of Performance Awards do not participate in dividends until both their market-based and service-based vesting requirements have been met. Due to the existence of the service requirements on Performance Awards, compensation expense is recognized ratably over the respective minimum service periods from the grant date through the vesting date. The fair values of Performance Awards are based on a Monte Carlo simulation valuation model.
The Performance Awards granted on September 16, 2025 will vest based upon (i) achieving a compound annual growth rate of total shareholder return of at least 8 % as of September 16, 2030 and (ii) continued employment through September 16, 2030.
A summary of performance award activity for the nine months ended December 31, 2025 is presented below:
| Total Unvested | Weighted- Average Grant-Date Fair Value of Award | ||||||||||
| March 31, 2025 | $ | ||||||||||
| Granted | $ | ||||||||||
| Forfeited | ( | $ | |||||||||
| December 31, 2025 | $ | ||||||||||
As of December 31, 2025, the unrecognized compensation expense related to the performance awards was $122,223 .
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Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
Below is a summary of the grant date fair value based on the Monte Carlo simulation valuation model and the significant assumptions used to estimate the grant date fair value of the Performance Awards granted on September 16, 2025.
| Grant Date Fair Value | $ | ||||
| Closing share price as of grant date | $ | ||||
| Risk Free Rate | % | ||||
Volatility(1) | % | ||||
| Dividend Yield | % | ||||
(1)The Company estimates expected volatility based on the historic volatility of its own Class A common stock.
The Company has recorded the following amounts related to compensation and benefits:
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Base compensation and benefits | $ | $ | $ | $ | |||||||||||||||||||
| Incentive fee compensation | |||||||||||||||||||||||
| Equity-based compensation | |||||||||||||||||||||||
| Total compensation and benefits | $ | $ | $ | $ | |||||||||||||||||||
11. Income Tax
The Company’s effective tax rate used for interim periods is based on an estimated annual effective tax rate including the tax effect of items required to be recorded discretely in the interim period in which those items occur. The effective tax rate is dependent on many factors, including the estimated amount of income subject to income tax; therefore, the effective tax rate can vary from period to period. The Company evaluates the realizability of its deferred tax asset on a quarterly basis and adjusts the valuation allowance when it is more likely than not that all or a portion of the deferred tax asset may not be realized.
The Company’s effective tax rates were 22.7 % and 14.1 % for the three months ended December 31, 2025 and 2024, respectively, and 17.9 % and 12.3 % for the nine months ended December 31, 2025 and 2024, respectively. The effective tax rates were different from the statutory tax rates due to income allocated to NCI, change in valuation allowance recorded against deferred tax assets and discrete tax adjustments to true-up prior fiscal year estimated investment taxable income to actual investment taxable income reported to the Company after the prior fiscal year end.
In connection with the September 2025 Offering and related unit exchanges, the Company recognized a deferred tax asset of $12,455 , presented net of a valuation allowance of $1,584 for the portion of tax benefits for which realization is not more likely than not. In conjunction with this recognition, the Company also recorded a payable to related parties of $10,512 pursuant to the tax receivable agreement, recognized through equity.
During the nine months ended December 31, 2025, the Company paid $12,000 of tax receivable agreement payments.
As of December 31, 2025, the Company had no unrecognized tax positions and believes there will be no changes to uncertain tax positions within the next 12 months.
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Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
In December 2021, the Organization for Economic Co-operation and Development (“OECD”) introduced a 15% global minimum tax under the Pillar Two Global Anti-Base Erosion model rules. Several OECD member countries have enacted tax legislation based on certain elements of these rules that became effective on January 1, 2024. Other jurisdictions have announced the intent to implement these rules, but the rules remain subject to significant negotiation, potential change, and phase-in periods. As of December 31, 2025, the Company is not subject to the Pillar Two model rules and will continue to monitor legislative developments and the potential impact on future periods.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States. The OBBBA contains several provisions revising the U.S. federal corporate income tax by, among other things, extending many expiring provisions from the Tax Cuts and Jobs Act of 2017, modifying the international tax framework, and restoring favorable tax treatment for certain business provisions. As of December 31, 2025, the OBBBA did not have a material impact on the Company’s income tax expense.
12. Earnings per Share
The following table presents the basic earnings per share (“EPS”) for a share of Class A common stock:
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income attributable to HLI | $ | $ | $ | $ | |||||||||||||||||||
Weighted Average Shares | |||||||||||||||||||||||
| Basic EPS of Class A common stock | $ | $ | $ | $ | |||||||||||||||||||
Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to HLI, and, therefore, are not participating shares. As a result, a separate presentation of basic and diluted EPS of Class B common stock under the two-class method has not been included. Shares of the Company’s Class B common stock are, however, considered potentially dilutive to the Class A common stock because the Class B units to which the Class B common stock corresponds are exchangeable for shares of Class A common stock on a one -for-one basis, at which time the share of Class B common stock is surrendered in exchange for a payment of its par value.
25 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
The following table presents the diluted EPS for a share of Class A common stock:
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Numerator | |||||||||||||||||||||||
| Net income attributable to Class A common stockholders - basic | $ | $ | $ | $ | |||||||||||||||||||
Adjustments to net income: | |||||||||||||||||||||||
| Assumed vesting of employee awards | |||||||||||||||||||||||
| Assumed conversion of Class B and Class C units | |||||||||||||||||||||||
Net income attributable to Class A common stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Denominator | |||||||||||||||||||||||
| Weighted-average shares of Class A common stock outstanding - basic | |||||||||||||||||||||||
| Weighted-average effect of dilutive securities: | |||||||||||||||||||||||
| Assumed vesting of employee awards | |||||||||||||||||||||||
| Assumed conversion of Class B and Class C units | |||||||||||||||||||||||
Weighted-average shares of Class A common stock outstanding | |||||||||||||||||||||||
| Diluted EPS of Class A common stock | $ | $ | $ | $ | |||||||||||||||||||
The adjustments to net income for dilutive shares are based upon the additional income that would be allocated to HLI for the change in its ownership percentage due to the dilutive shares and adjusted for the incremental income tax expense related to the additional allocated income. Net income (loss) recorded by HLI on a standalone basis will determine if the Class B and Class C units are dilutive or antidilutive in each respective period.
The following table presents the weighted-average Performance Awards and the Warrant shares excluded from diluted EPS that would have been antidilutive or for which the market or performance conditions have not been achieved as of the period reported:
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| Shares | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Performance Awards | |||||||||||||||||||||||
| Warrant shares | |||||||||||||||||||||||
13. Related Party Transactions
The Company considers its employees, directors, and equity method investments to be related parties.
26 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
Revenue and Receivables
The Company earned management and advisory fees from Funds of $127,313 and $100,522 for the three months ended December 31, 2025 and 2024, respectively, and $351,056 and $309,740 for the nine months ended December 31, 2025 and 2024, respectively. The Company earned incentive fees from Funds of $42,404 and $39,612 for the three months ended December 31, 2025 and 2024, respectively, and $130,721 and $123,988 for the nine months ended December 31, 2025 and 2024, respectively.
Fees receivable from the Funds were $145,990 and $156,776 as of December 31, 2025 and March 31, 2025, respectively, and are included in fees receivable in the Condensed Consolidated Balance Sheets.
Sale of Consolidated Fund
On October 23, 2025, the Company completed the sale of its interests in a wholly-owned Consolidated Fund to a Fund that the Company manages for $92,278 in cash. As a result of the sale, the Company derecognized all of the assets and liabilities of the Consolidated Fund, including $70,143 of cash held by the Consolidated Fund, during the three and nine months ended December 31, 2025. After the deconsolidation, the Company did not retain an equity interest but remains the investment manager of the fund.
14. Supplemental Cash Flow
| Nine Months Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Non-cash operating activities: | |||||||||||
| Establishment of lease liability in exchange for right of use asset | $ | $ | |||||||||
| Deconsolidation of fund net (assets)/ liabilities | $ | $ | ( | ||||||||
| Non-cash investing activities: | |||||||||||
| Investments purchased by Consolidated Fund not yet paid | $ | ( | $ | ||||||||
| Deconsolidation of investments held by deconsolidated fund | $ | $ | |||||||||
| Transfer of equity method investment in funds from deconsolidated fund | $ | $ | |||||||||
| Conversion of note receivable | $ | $ | |||||||||
| Non-cash financing activities: | |||||||||||
| Dividends declared but not paid | $ | $ | |||||||||
| Member distributions declared but not paid | $ | $ | |||||||||
| Establishment of payable to related parties pursuant to tax receivable agreement | $ | $ | |||||||||
| Warrant related asset | $ | $ | |||||||||
15. Commitments and Contingencies
Litigation
In the ordinary course of business, the Company may be subject to various legal, regulatory, and/or administrative proceedings from time to time. Although there can be no assurance of the outcome of such proceedings, in the opinion of management, the Company does not believe it is probable that any pending or, to its knowledge, threatened legal proceeding or claim would individually or in the aggregate materially affect its condensed consolidated financial statements.
Incentive Fees
The Funds have allocated carried interest still subject to contingencies that did not meet the Company’s criteria for revenue recognition in the amounts of $1,492,751 and $1,260,277 , net of amounts attributable to NCI, at December 31, 2025 and March 31, 2025, respectively.
27 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
If the Company ultimately receives the unrecognized carried interest, a total of $373,188 and $315,069 as of December 31, 2025 and March 31, 2025, respectively, would potentially be payable to certain employees and third parties pursuant to compensation arrangements related to carried interest profit-sharing plans. Such amounts have not been recorded in the Condensed Consolidated Balance Sheets or Condensed Consolidated Statements of Income as the payment is not yet probable.
Leases
The Company’s leases consist primarily of operating leases for office space and office equipment in various locations around the world. Some leases have the option to extend for an additional term or terminate early. Short-term lease costs are not material.
The following table shows lease costs and other supplemental information related to the Company’s operating leases:
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Operating lease costs | $ | $ | $ | $ | |||||||||||||||||||
| Variable lease costs | $ | $ | $ | $ | |||||||||||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | March 31, 2025 | ||||||||||||||||||||||
| Weighted average remaining lease term (in years) | |||||||||||||||||||||||
| Weighted average discount rate | % | % | |||||||||||||||||||||
As of December 31, 2025, the maturities of operating lease liabilities were as follows:
Remainder of FY2026 | $ | ||||
FY2027 | |||||
FY2028 | |||||
FY2029 | |||||
FY2030 | |||||
Thereafter | |||||
Total lease payments | $ | ||||
Less: imputed interest | ( | ||||
Total operating lease liabilities | $ | ||||
Commitments
The Company serves as the investment manager of the Funds. The general partner or managing member of each Fund is generally a separate subsidiary of the Company and has agreed to invest funds on the same basis as the limited partners in most instances. The Company’s aggregate unfunded commitment to the Funds was $269,521 and $312,215 as of December 31, 2025 and March 31, 2025, respectively.
In connection with certain of the Company’s strategic technology investments, a percentage of realized gains will be paid to one of the Company’s Co-CEOs for overseeing the initial investments and up to 15 % may be paid as a discretionary bonus to other employees as those gains are realized. The Company has an unrealized net gain on strategic investments of $34,086 as of December 31, 2025.
28 | ||||||||
Hamilton Lane Incorporated
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(In thousands, except share and per share amounts)
The Company offers an Employee Investment Program (“EIP”) through which certain employees are able to invest directly into certain Company managed Funds as individual limited partners (“LPs”). The employees also have an option to enter into a loan agreement with the Company or a third-party lender to fund committed capital. The loan is collateralized by the underlying LP’s interest in the fund and return of capital distributions are utilized to pay the outstanding loan balance. The Company entered into a separate agreement with the third-party lender to backstop the employee’s performance under the loan with a commitment to purchase the LP interest from the lender at the greater of fair value or the outstanding balance of the loan in the event of a default by the employee. As of December 31, 2025 and March 31, 2025, the total amount of outstanding loans at the third-party lender under the EIP were $1,409 and $1,280 , respectively, and the Company believes the risk of default by an employee to be remote.
16. Subsequent Events
Dividend Declared
On February 3, 2026, the Company announced a quarterly dividend of $0.54 per share of Class A common stock to record holders at the close of business on March 20, 2026. The payment date will be April 6, 2026.
29 | ||||||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following information should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in this Form 10-Q, and our audited financial statements, notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Form 10-K for a more complete understanding of our financial position and results of operations.
The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Investors should review the “Cautionary Note Regarding Forward-Looking Information” above and the “Risk Factors” detailed in Part I, Item 1A of our 2025 Form 10-K for a discussion of those risks and uncertainties that have the potential to cause actual results to be materially different. Our results of operations for interim periods are not necessarily indicative of results to be expected for the full year or for any other period. Unless otherwise indicated, references in this Form 10-Q to fiscal 2025 and fiscal 2024 are to our fiscal years ended March 31, 2025, and 2024, respectively.
Business Overview
We are a global private markets investment solutions provider and operate our business in a single segment. We offer a variety of investment solutions to address our clients’ needs across a range of private markets, including private equity, private credit, real estate, infrastructure, real assets, growth equity, venture capital and impact. These solutions are constructed from a range of investment types, including primary investments in funds managed by third-party managers, direct investments alongside such funds and acquisitions of secondary stakes in such funds, with a number of our clients utilizing multiple investment types. These solutions are offered in a variety of formats covering some or all phases of private markets investment programs:
•Customized Separate Accounts: We design and build customized portfolios of private markets funds and direct investments to meet our clients’ specific portfolio objectives with regard to return, risk tolerance, diversification and liquidity. We generally have discretionary investment authority over our customized separate accounts, which comprised $98.1 billion of our assets under management (“AUM”) as of December 31, 2025.
•Specialized Funds: We organize, invest and manage commingled specialized primary, secondary and direct investment funds. Our specialized funds invest across a variety of private markets and include equity, equity-linked and credit funds offered on standard terms, as well as shorter duration, opportunistically oriented funds. We launched our first specialized fund in 1997. Since then, our product offerings have grown steadily and now include evergreen offerings that primarily invest in secondaries and direct investments in equity and credit and are available to certain high-net-worth individuals. Specialized funds comprised $48.0 billion of our AUM as of December 31, 2025.
•Advisory Services: We offer non-discretionary investment advisory services to assist clients in developing and implementing their private markets investment programs. Our investment advisory services include asset allocation, strategic plan creation, development of investment policies and guidelines, the screening and recommending of investments, the monitoring of and reporting on investments and investment manager review and due diligence. Our advisory clients include some of the largest and most sophisticated private markets investors in the world. We had $871.5 billion of assets under advisement (“AUA”) as of December 31, 2025.
•Distribution Management: We offer distribution management services to our clients through active portfolio management to enhance the realized value of publicly traded stock they receive as distributions in-kind from private equity funds.
30
•Reporting, Monitoring, Data and Analytics: We provide our clients with comprehensive reporting and investment monitoring services, usually bundled into our broader investment solutions offerings, but also on a stand-alone, fee-for-service basis. We also provide comprehensive research and analytical services as part of our investment solutions, leveraging our large, global, proprietary and high-quality database for transparency and powerful analytics. Our data, as well as our benchmarking and forecasting models, are accessible through our proprietary technology solution, Cobalt LP, on a stand-alone, subscription basis.
Our client and investor base is broadly diversified by type, size and geography. Our client base ranges from those seeking to make an initial investment in alternative assets to some of the world’s largest and most sophisticated private markets investors. As we offer a highly customized, flexible service, we are equipped to provide investment services to institutional clients of all sizes and with different needs, internal resources and investment objectives. Our clients include prominent institutional investors in the United States, Canada, Europe, the Middle East, Asia, Australia and Latin America. We provide private markets solutions and services to some of the largest global pension, sovereign wealth and U.S. state pension funds. In addition, we believe we are a leading provider of private markets solutions for U.S. labor union pension plans, and we serve numerous smaller public and corporate pension plans, sovereign wealth funds, financial institutions and insurance companies, endowments and foundations, as well as family offices and high-net-worth individuals.
Recent Transactions
Credit Facility Amendment
On October 1, 2025, we amended our existing 2022 Multi-Draw Term Loan Agreement. The amendment included a decrease in the aggregate principal amount available to be borrowed from $75 million to $50 million, changed dates related to principal and interest payments and changed interest rates for borrowings to the greater of the prime rate minus 1.35% or 3.00%.
Sale of Consolidated Fund
On October 23, 2025, we completed the sale of our interests in a wholly-owned entity for $92.3 million in cash to an investment fund, that we manage, but, in which we do not hold an equity interest.
Strategic Partnership
On November 2, 2025, we entered into a long-term strategic partnership with The Guardian Life Insurance Company of America (“Guardian”). Through this partnership, we will oversee Guardian’s existing nearly $5 billion private equity portfolio, and Guardian has also committed to invest approximately $500 million per year in private equity for the next 10 years through us. To support the partnership’s shared goals, Guardian was granted, at closing, a warrant related to a maximum of 400,000 shares of our Class A common stock (the “Warrant”) along with additional financial incentives. The Warrant is subject to applicable exercise prices and vesting and forfeiture conditions, may be settled in cash or shares at our election, expires approximately 10 years after issuance, and includes customary anti‑dilution adjustments for stock splits, stock dividends and similar events. The transaction closed, and the Warrant was issued, on December 31, 2025.
Key Financial and Operating Measures
Our key financial measures are discussed below.
Revenues
We generate revenues primarily from management and advisory fees and incentive fees.
31
Management and advisory fees comprise specialized fund and customized separate account management fees, advisory and reporting fees and distribution management fees.
Revenues from customized separate accounts are generally based on a contractual rate applied to committed capital or net invested capital under management. These fees often decrease over the life of the contract due to built-in declines in contractual rates and/or as a result of lower net invested capital balances as capital is returned to clients. In certain cases, we also provide advisory and/or reporting services, and, therefore, we also receive fees for services such as monitoring and reporting on a client’s existing private markets investments. In addition, we may provide for investments in our specialized funds as part of our customized separate accounts. In these cases, we generally reduce the asset-based and/or incentive fees on customized separate accounts to the extent that assets in the accounts are invested in our specialized funds so that our clients do not pay duplicate fees.
Revenues from specialized funds are based on a percentage of limited partners’ capital commitments to, net invested capital or net asset value (“NAV”) in, our specialized funds. The management fee during the investment period is often charged on capital commitments and after the investment period (or a defined anniversary of the fund’s initial closing) is typically reduced by a percentage of the management fee for the preceding year or charged on net invested capital or NAV. In the case of certain funds, we charge management fees on capital commitments, with the management fee increasing during the early years of the fund’s term and declining in the later years. Management fees for certain funds are discounted based on the amount of the limited partners’ commitments, whether the limited partners commit early in the offering period or if the limited partners are investors in our other funds. Revenues from specialized funds that charge management fees during their fundraising periods include retroactive fees. Retroactive fees are management fees earned from investors that commit to a specialized fund after the first close of the fund and are required to pay a catch-up management fee as if they had committed to the fund at the first closing.
Revenues from advisory and reporting, monitoring, data and analytics services are generally annual fixed fees, which vary depending on the services we provide, and are recognized over the service term. In limited cases, advisory service clients are charged basis point fees annually based on the amounts they have committed to invest pursuant to their agreements with us. In other cases where our services are limited to monitoring and reporting on investment portfolios, clients are charged a fee based on the number of investments in their portfolio.
Distribution management fees are generally earned by applying a percentage to AUM or proceeds received. Certain active management clients may elect a fee structure under which they are charged an asset-based fee plus a fee based on net realized and unrealized gains and income net of realized and unrealized losses.
Incentive fees comprise carried interest earned from our specialized funds and certain customized separate accounts structured as single-client funds in which we have a commitment, and performance fees earned on certain other specialized funds and customized separate accounts.
For each of our secondary funds, direct investment funds, strategic opportunity funds and some of our evergreen funds, we generally earn carried interest equal to a fixed percentage of net profits, usually 10.0% to 12.5%, subject to a compounded annual preferred return that is generally 6.0% to 8.0%. To the extent that our primary funds also directly make secondary investments and direct investments, they generally earn carried interest on a similar basis. Furthermore, certain of our primary funds earn carried interest on their investments in other private markets funds on a primary basis that is generally 5.0% of net profits, subject to the fund’s compounded annual preferred return. We recognize carried interest when it is probable that a significant reversal will not occur.
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Performance fees are based on the aggregate amount of unrealized or realized gains earned by the applicable specialized fund or customized separate account, subject to the achievement of defined minimum returns to the clients or high-water marks. Performance fees range from 5.0% to 12.5% of net profits, with some subject to a compounded annual preferred return that varies by account but is generally 6.0% to 8.0%. Performance fees are recognized when it is probable that a significant reversal will not occur.
The primary contingency regarding incentive fees is the “clawback,” or the obligation to return distributions in excess of the amount prescribed by the applicable fund or separate account documents. Incentive fees are typically only required to be returned on a net of tax basis due to a clawback. As such, the tax-related portion of incentive fees is typically not subject to clawback and is therefore recognized as revenue immediately upon receipt. In the event that a payment is made before it can be recognized as revenue, this amount would be included as deferred incentive fee revenue on our Condensed Consolidated Balance Sheets and recognized as income in accordance with our revenue recognition policy.
Expenses
Compensation and benefits is our largest expense and consists of (a) base compensation comprising salary, bonuses and benefits paid and payable to employees, (b) equity-based compensation associated with the grants of restricted stock and performance awards and (c) incentive fee compensation, which consists of carried interest and performance fee allocations. We expect to continue to experience a general rise in compensation and benefits expense commensurate with expected growth in headcount and with the need to maintain competitive compensation levels as we expand geographically and create new products and services.
Our compensation arrangements with our employees contain a significant bonus component driven by the results of our operations. Therefore, as our revenues, profitability and the amount of incentive fees earned by our customized separate accounts and specialized funds increase, our compensation costs rise.
Certain current and former employees participate in a carried interest program whereby approximately 25% of incentive fees from certain of our specialized funds and customized separate accounts are awarded to plan participants. We record compensation expense payable to plan participants as the incentive fees become estimable and collection is probable.
General, administrative and other includes travel, accounting, legal and other professional fees, commissions, placement fees, office expenses, depreciation and other costs associated with our operations. Our occupancy-related costs and professional services expenses, in particular, generally increase or decrease in relative proportion to the number of our employees and the overall size and scale of our business operations.
Other Income (Expense)
Equity in income of investees primarily represents our share of earnings from our investments in our specialized funds and certain customized separate accounts in which we have a commitment. Equity income primarily comprises our share of the net realized and unrealized gains (losses) and investment income partially offset by the expenses from these investments.
We have commitments in our specialized funds and certain customized separate accounts that invest solely in primary funds, secondary funds and direct investments, as well as those that invest across investment types. Equity in income of investees will increase or decrease as the change in underlying fund investment valuations increases or decreases. Since our direct investment funds invest in underlying portfolio companies, their quarterly and annual valuation changes are more affected by individual company movements than our primary and secondary funds that have exposures across multiple portfolio companies in underlying private markets funds. Our specialized funds and customized separate accounts invest across industries, strategies and
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geographies, and therefore our investments do not include any significant concentrations in a specific sector or area outside the United States.
Interest expense includes interest paid and accrued on our outstanding debt, along with the amortization of deferred financing costs, amortization of original issue discount and the write-off of deferred financing costs due to the repayment of previously outstanding debt.
Interest income is income earned on cash and cash equivalents.
Non-operating gain, net consists primarily of gains and losses on certain investments, changes in liability under the tax receivable agreement and other non-recurring or non-cash items.
Other income (expense) of Consolidated Funds and Partnerships consists of earnings from funds in which consolidated general partner entities, that are not wholly-owned by us, have commitments as well as interest income, net gain on investments and interest expense on Consolidated Funds.
Income Tax Expense
We are a corporation for U.S. federal income tax purposes and therefore are subject to U.S. federal and state income taxes on our share of taxable income generated by HLA. HLA is treated as a pass-through entity for U.S. federal and state income tax purposes. As such, income generated by HLA flows through to its limited partners, including us, and is generally not subject to U.S. federal or state income tax at the Partnership level. Our non-U.S. subsidiaries generally operate as corporate entities in non-U.S. jurisdictions, with certain of these entities subject to non-U.S. income taxes. Additionally, certain of our subsidiaries are subject to local jurisdiction income taxes at the entity level. Accordingly, the tax liability with respect to income attributable to non-controlling interests (“NCI”) in HLA is borne by the holders of such NCI.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States. The OBBBA contains several provisions revising the U.S. federal corporate income tax by, among other things, extending many expiring provisions from the Tax Cuts and Jobs Act of 2017, modifying the international tax framework, and restoring favorable tax treatment for certain business provisions. As of December 31, 2025, the OBBBA did not have a material impact on the Company’s income tax expense.
Non-controlling interests
NCI reflect the portion of income or loss and the corresponding equity attributable to third-party equity holders and employees in certain consolidated subsidiaries that are not 100% owned by us. NCI are presented as separate components in our Condensed Consolidated Statements of Income to clearly distinguish between our interests and the economic interests of third parties and employees in those entities.
Fee-Earning AUM
Fee-earning AUM is a metric we use to measure the assets from which we earn management fees. Our fee-earning AUM comprise assets in our customized separate accounts and specialized funds from which we derive management fees that are generally derived from applying a certain percentage to the appropriate fee base. We classify customized separate account revenue as management fees if the client is charged an asset-based fee, which includes the majority of our discretionary AUM accounts but also includes certain non-discretionary AUA accounts. Our fee-earning AUM is equal to the amount of capital commitments, net invested capital and NAV of our customized separate accounts and specialized funds depending on the fee terms. The vast majority of our customized separate accounts and specialized funds earn fees based on commitments or net invested capital, which are not affected by market appreciation or depreciation. Therefore, revenues and fee-earning AUM are not significantly affected by changes in market value.
Our calculations of fee-earning AUM may differ from the calculations of other asset managers, and as a result, this measure may not be comparable to similar measures presented by other asset managers. Our
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definition of fee-earning AUM is not based on any definition that is set forth in the agreements governing the customized separate accounts or specialized funds that we manage.
Consolidated Results of Operations
The following is a discussion of our consolidated results of operations for the three and nine months ended December 31, 2025 and 2024. This information is derived from our accompanying condensed consolidated financial statements prepared in accordance with GAAP.
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Management and advisory fees | $ | 153,177 | $ | 126,282 | $ | 429,000 | $ | 386,027 | |||||||||||||||
| Incentive fees | 45,375 | 41,176 | 132,188 | 128,161 | |||||||||||||||||||
| Consolidated Funds and Partnerships: | |||||||||||||||||||||||
| Incentive fees | 37 | 803 | 4,239 | 803 | |||||||||||||||||||
| Total revenues | 198,589 | 168,261 | 565,427 | 514,991 | |||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Compensation and benefits | 77,944 | 61,905 | 224,485 | 195,409 | |||||||||||||||||||
| General, administrative and other | 34,329 | 30,581 | 96,822 | 86,858 | |||||||||||||||||||
| Consolidated Funds and Partnerships: | |||||||||||||||||||||||
| General, administrative and other | 310 | 53 | 1,424 | 202 | |||||||||||||||||||
| Total expenses | 112,583 | 92,539 | 322,731 | 282,469 | |||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Equity in income of investees | 11,307 | 11,611 | 40,815 | 25,373 | |||||||||||||||||||
| Interest expense | (3,688) | (3,866) | (11,374) | (9,517) | |||||||||||||||||||
| Interest income | 2,656 | 2,761 | 8,093 | 4,933 | |||||||||||||||||||
| Non-operating gain, net | 2,613 | 453 | 3,095 | 11,705 | |||||||||||||||||||
| Consolidated Funds and Partnerships: | |||||||||||||||||||||||
| Equity in income of investees | 433 | 351 | 1,855 | 2,236 | |||||||||||||||||||
| Net gain on investments | 19,681 | 3,082 | 46,147 | 6,621 | |||||||||||||||||||
| Interest income | 1,042 | 37 | 1,753 | 145 | |||||||||||||||||||
| Total other income (expense) | 34,044 | 14,429 | 90,384 | 41,496 | |||||||||||||||||||
| Income before income taxes | 120,050 | 90,151 | 333,080 | 274,018 | |||||||||||||||||||
| Income tax expense | 27,253 | 12,696 | 59,609 | 33,555 | |||||||||||||||||||
| Net income | 92,797 | 77,455 | 273,471 | 240,463 | |||||||||||||||||||
| Less: Income attributable to non-controlling interests in Partnerships | 124 | 94 | 506 | 827 | |||||||||||||||||||
| Less: Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C. | 23,426 | 23,159 | 70,483 | 70,654 | |||||||||||||||||||
| Less: Income attributable to non-controlling interests in Consolidated Funds | 10,875 | 1,230 | 19,475 | 2,064 | |||||||||||||||||||
| Net income attributable to Hamilton Lane Incorporated | $ | 58,372 | $ | 52,972 | $ | 183,007 | $ | 166,918 | |||||||||||||||
| Basic earnings per share of Class A common stock | $ | 1.40 | $ | 1.33 | $ | 4.40 | $ | 4.20 | |||||||||||||||
| Diluted earnings per share of Class A common stock | $ | 1.37 | $ | 1.32 | $ | 4.35 | $ | 4.15 | |||||||||||||||
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Revenues
The following table shows our total revenues (excluding consolidated funds and general partner entities that are not wholly-owned (“Consolidated Funds and Partnerships”)):
| Three Months Ended December 31, | Total Change | Nine Months Ended December 31, | Total Change | ||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||
| Management and advisory fees | |||||||||||||||||||||||||||||||||||
Specialized funds | $ | 98,530 | $ | 75,764 | $ | 22,766 | $ | 271,132 | $ | 235,866 | $ | 35,266 | |||||||||||||||||||||||
Customized separate accounts | 36,108 | 33,926 | 2,182 | 106,454 | 102,136 | 4,318 | |||||||||||||||||||||||||||||
Advisory | 4,810 | 5,681 | (871) | 15,727 | 17,320 | (1,593) | |||||||||||||||||||||||||||||
Reporting, monitoring, data and analytics | 9,326 | 7,102 | 2,224 | 26,364 | 21,225 | 5,139 | |||||||||||||||||||||||||||||
Distribution management | 455 | 1,002 | (547) | 1,882 | 1,917 | (35) | |||||||||||||||||||||||||||||
Fund reimbursement revenue | 3,948 | 2,807 | 1,141 | 7,441 | 7,563 | (122) | |||||||||||||||||||||||||||||
Total management and advisory fees | 153,177 | 126,282 | 26,895 | 429,000 | 386,027 | 42,973 | |||||||||||||||||||||||||||||
Incentive fees | |||||||||||||||||||||||||||||||||||
| Specialized funds | 39,449 | 34,837 | 4,612 | 109,135 | 112,913 | (3,778) | |||||||||||||||||||||||||||||
| Customized separate accounts | 5,926 | 6,339 | (413) | 23,053 | 15,248 | 7,805 | |||||||||||||||||||||||||||||
| Total incentive fees | 45,375 | 41,176 | 4,199 | 132,188 | 128,161 | 4,027 | |||||||||||||||||||||||||||||
| Total revenues | $ | 198,552 | $ | 167,458 | $ | 31,094 | $ | 561,188 | $ | 514,188 | $ | 47,000 | |||||||||||||||||||||||
Three months ended December 31, 2025 compared to three months ended December 31, 2024
Total revenues increased $31.1 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due to increases in both management and advisory fees and incentive fees.
Management and advisory fees increased $26.9 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. Specialized funds revenue increased $22.8 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due primarily to an increase of $17.9 million in revenue from our evergreen funds and increase of $4.4 million in revenue from our latest direct equity fund, which added $6.2 billion and $0.7 billion, respectively, in fee-earning AUM between periods. Revenue from our specialized funds for the three months ended December 31, 2025 included $2.8 million of retroactive fees from our latest direct equity fund. Customized separate accounts revenue increased $2.2 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024 due to the addition of new accounts, additional allocations from existing accounts and continued investment activity. Reporting, monitoring, data and analytics revenue increased $2.2 million, due primarily to increased subscriptions of our technology solutions.
Incentive fees increased $4.2 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due primarily to an increase in evergreen-related performance fees partially offset by proceeds realized on the sale of underlying investments in one of our specialized funds during the three months ended December 31, 2024.
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Nine Months Ended December 31, 2025 compared to nine months ended December 31, 2024
Total revenues increased $47.0 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024, due to increases in both management and advisory fees and incentive fees.
Management and advisory fees increased $43.0 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. Specialized funds revenue increased $35.3 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024, due primarily to an increase of $50.0 million in revenue from our evergreen funds and an increase of $8.2 million in revenue from our latest direct equity fund, partially offset by $20.7 million of retroactive fees from our latest secondary fund recognized during the nine months ended December 31, 2024 compared to $2.4 million from our latest direct equity fund during the nine months ended December 31, 2025. Reporting, monitoring, data and analytics revenue increased $5.1 million, due primarily to increased subscriptions of our technology solutions. Customized separate accounts revenue increased $4.3 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024 due to the addition of several new accounts, additional allocations from existing accounts, and continued investment activity.
Incentive fees increased $4.0 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024, due primarily to an increase in evergreen-related performance fees partially offset by proceeds realized on the sale of underlying investments in one of our specialized funds during the nine months ended December 31, 2024.
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Expenses
The following table shows our expenses (excluding Consolidated Funds and Partnerships):
| Three Months Ended December 31, | Total Change | Nine Months Ended December 31, | Total Change | ||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||||
| Compensation and benefits | |||||||||||||||||||||||||||||||||||
| Base compensation and benefits | $ | 60,886 | $ | 39,633 | $ | 21,253 | $ | 170,133 | $ | 143,495 | $ | 26,638 | |||||||||||||||||||||||
| Incentive fee compensation | 4,067 | 10,487 | (6,420) | 16,172 | 32,233 | (16,061) | |||||||||||||||||||||||||||||
| Equity-based compensation | 12,991 | 11,785 | 1,206 | 38,180 | 19,681 | 18,499 | |||||||||||||||||||||||||||||
| Total compensation and benefits | 77,944 | 61,905 | 16,039 | 224,485 | 195,409 | 29,076 | |||||||||||||||||||||||||||||
| General, administrative and other | 34,329 | 30,581 | 3,748 | 96,822 | 86,858 | 9,964 | |||||||||||||||||||||||||||||
| Total expenses | $ | 112,273 | $ | 92,486 | $ | 19,787 | $ | 321,307 | $ | 282,267 | $ | 39,040 | |||||||||||||||||||||||
Three months ended December 31, 2025 compared to three months ended December 31, 2024
Total expenses increased $19.8 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due to increases in both compensation and benefits and general, administrative and other expenses.
Compensation and benefits expenses increased $16.0 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. Base compensation and benefits increased $21.3 million for the three months ended December 31, 2025, due primarily to an increase in salary expense from additional headcount and an increase in our annual bonus plan accrual related to stronger operating performance compared to the prior year period. Equity-based compensation increased $1.2 million driven primarily by awards granted between December 31, 2024 and December 31, 2025. Incentive fee compensation decreased $6.4 million for the three months ended December 31, 2025 primarily due to a decrease in carried interest revenue compared to the prior year period.
General, administrative and other expenses increased $3.7 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due primarily to an increase in consulting and professional fees.
Nine Months Ended December 31, 2025 compared to nine months ended December 31, 2024
Total expenses increased $39.0 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024, due to increases in both compensation and benefits and general, administrative and other expenses.
Compensation and benefits expenses increased $29.1 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. Base compensation and benefits increased $26.6 million, due primarily to an increase in salary expense from additional headcount and an increase in our annual bonus plan accrual related to stronger operating performance compared to the prior year period. Equity-based compensation increased $18.5 million for the nine months ended December 31, 2025, driven primarily by awards granted in the prior fiscal year ended March 31, 2025. Incentive fee compensation decreased $16.1 million for the nine months ended December 31, 2025 due to a decrease in carried interest revenue compared to the prior year period.
General, administrative and other expenses increased $10.0 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. This change consisted primarily of a $5.3 million increase in consulting and professional fees, a $2.8 million increase in third-party commissions
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primarily attributed to the increase in gross subscriptions to our evergreen funds, and a $1.1 million increase in technology-related expenses.
Other Income (Expense)
The following table shows our total other income (expense) (excluding Consolidated Funds and Partnerships):
| Three Months Ended December 31, | Total Change | Nine Months Ended December 31, | Total Change | ||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||||||||||
| Equity in income of investees | |||||||||||||||||||||||||||||||||||
Primary funds | $ | 776 | $ | 439 | $ | 337 | $ | 2,864 | $ | 528 | $ | 2,336 | |||||||||||||||||||||||
Direct investment funds | 1,672 | 2,425 | (753) | 6,172 | 5,911 | 261 | |||||||||||||||||||||||||||||
Secondary funds | 1,171 | 818 | 353 | 6,734 | 1,761 | 4,973 | |||||||||||||||||||||||||||||
Customized separate accounts | 3,601 | 2,507 | 1,094 | 10,572 | 7,261 | 3,311 | |||||||||||||||||||||||||||||
| Evergreen funds | 4,087 | 5,823 | (1,736) | 14,859 | 10,804 | 4,055 | |||||||||||||||||||||||||||||
Other equity method investments | — | (401) | 401 | (386) | (892) | 506 | |||||||||||||||||||||||||||||
| Total equity in income of investees | 11,307 | 11,611 | (304) | 40,815 | 25,373 | 15,442 | |||||||||||||||||||||||||||||
| Interest expense | (3,688) | (3,866) | 178 | (11,374) | (9,517) | (1,857) | |||||||||||||||||||||||||||||
| Interest income | 2,656 | 2,761 | (105) | 8,093 | 4,933 | 3,160 | |||||||||||||||||||||||||||||
| Non-operating gain, net | 2,613 | 453 | 2,160 | 3,095 | 11,705 | (8,610) | |||||||||||||||||||||||||||||
| Total other income (expense) | $ | 12,888 | $ | 10,959 | $ | 1,929 | $ | 40,629 | $ | 32,494 | $ | 8,135 | |||||||||||||||||||||||
Three months ended December 31, 2025 compared to three months ended December 31, 2024
Other income (expense) increased $1.9 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due primarily to an increase in non-operating gain, net, partially offset by a decrease in equity income of investees.
Non-operating gain, net increased $2.2 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024 due primarily to a decrease in our liability under the tax receivable agreement.
Equity in income of investees decreased $0.3 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024 due primarily to smaller increases in investment valuations.
Nine Months Ended December 31, 2025 compared to nine months ended December 31, 2024
Other income (expense) increased $8.1 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024, due primarily to an increase in equity in income of investees, partially offset by a decrease in non-operating gain, net.
Equity in income of investees increased $15.4 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024, due primarily to larger increases in investment valuations.
Non-operating gain, net decreased $8.6 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024, due primarily to a decrease in our liability under the tax receivable agreement, offset by gains on our technology investments during the nine months ended December 31, 2024.
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Consolidated Funds and Partnerships
The following table shows the results of operations of Consolidated Funds and Partnerships:
| Three Months Ended December 31, | Total Change | Nine Months Ended December 31, | Total Change | ||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||||
| Incentive fees | $ | 37 | $ | 803 | $ | (766) | $ | 4,239 | $ | 803 | $ | 3,436 | |||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||
General, administrative and other | $ | 310 | $ | 53 | $ | 257 | $ | 1,424 | $ | 202 | $ | 1,222 | |||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||||||||||||||
| Equity in income of investees | $ | 433 | $ | 351 | $ | 82 | $ | 1,855 | $ | 2,236 | $ | (381) | |||||||||||||||||||||||
| Net gain on investments | 19,681 | 3,082 | 16,599 | 46,147 | 6,621 | 39,526 | |||||||||||||||||||||||||||||
| Interest income | 1,042 | 37 | 1,005 | 1,753 | 145 | 1,608 | |||||||||||||||||||||||||||||
| Total other income (expense) | $ | 21,156 | $ | 3,470 | $ | 17,686 | $ | 49,755 | $ | 9,002 | $ | 40,753 | |||||||||||||||||||||||
Three months ended December 31, 2025 compared to three months ended December 31, 2024
Incentive fees decreased $0.8 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due to decreased carried interest from our specialized funds.
Other income (expense) of Consolidated Funds and Partnerships increased $17.7 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due primarily to increased investment activity of Funds consolidated between periods.
Nine Months Ended December 31, 2025 compared to nine months ended December 31, 2024
Incentive fees increased $3.4 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024, due to increased carried interest from our specialized funds.
Other income (expense) of Consolidated Funds and Partnerships increased $40.8 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024, due primarily to increased investment activity of Funds consolidated between periods.
Income Tax Expense
Our effective tax rate was 22.7% and 14.1% for the three months ended December 31, 2025 and 2024, respectively, and 17.9% and 12.3% for the nine months ended December 31, 2025 and 2024, respectively. These rates were different from the statutory tax rates due to the portion of income allocated to NCI, change in valuation allowance recorded against deferred tax assets and discrete tax adjustments to true-up prior fiscal year estimated investment taxable income to actual investment taxable income reported to us after the prior fiscal year end. The effective tax rates for the three and nine months ended December 31, 2025 were higher than the effective tax rates for the three and nine months ended December 31, 2024 due primarily to an increase in valuation allowances against deferred tax assets recorded at December 31, 2025.
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Non-Controlling Interests
The following table shows income attributable to NCI:
| Three Months Ended December 31, | Total Change | Nine Months Ended December 31, | Total Change | ||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||
| Income attributable to non-controlling interests in Partnerships | $ | 124 | $ | 94 | $ | 30 | $ | 506 | $ | 827 | $ | (321) | |||||||||||||||||||||||
| Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C. | 23,426 | 23,159 | 267 | 70,483 | 70,654 | (171) | |||||||||||||||||||||||||||||
| Income attributable to non-controlling interests in consolidated Funds | 10,875 | 1,230 | 9,645 | 19,475 | 2,064 | 17,411 | |||||||||||||||||||||||||||||
| $ | 34,425 | $ | 24,483 | $ | 9,942 | $ | 90,464 | $ | 73,545 | $ | 16,919 | ||||||||||||||||||||||||
Three months ended December 31, 2025 compared to three months ended December 31, 2024
Net income attributable to NCI increased by $9.9 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due primarily to an increase in overall net income during the period.
Net income attributable to NCI in consolidated Funds increased $9.6 million for the three months ended December 31, 2025 compared to the three months ended December 31, 2024. The increase was due primarily to gains on investments held by Funds consolidated between periods and increased NCI ownership driven by increased subscriptions in the consolidated Funds by NCI holders.
Net income attributable to NCI in Hamilton Lane Advisors, L.L.C. remained mostly unchanged for the three months ended December 31, 2025 compared to the three months ended December 31, 2024, due primarily to a decrease in NCI holders’ economic ownership percentage of Hamilton Lane Advisors, L.L.C. between periods, partially offset by an overall increase in net income.
Nine Months Ended December 31, 2025 compared to nine months ended December 31, 2024
Net income attributable to NCI increased by $16.9 million for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, due primarily to an increase in overall net income during the period.
Net income attributable to NCI in consolidated Funds increased by $17.4 million for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024. The increase was due primarily to gains on investments held by Funds consolidated between periods and increased NCI ownership driven by increased subscriptions in the consolidated Funds by NCI holders.
Net income attributable to NCI in Hamilton Lane Advisors, L.L.C. remained mostly unchanged for the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024, due primarily to a decrease in NCI holders’ economic ownership percentage of Hamilton Lane Advisors, L.L.C. during the period, partially offset by an overall increase in net income.
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Fee-Earning AUM
The following table provides the period to period roll-forward of our fee-earning AUM.
| Three Months Ended December 31, 2025 | Nine Months Ended December 31, 2025 | ||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Customized Separate Accounts | Specialized Funds | Total | Customized Separate Accounts | Specialized Funds | Total | ||||||||||||||||||
| Balance, beginning of period | $ | 40,797 | $ | 35,622 | $ | 76,419 | $ | 39,343 | $ | 32,704 | $ | 72,047 | |||||||||||
Contributions (1) | 1,345 | 2,655 | 4,000 | 4,262 | 6,078 | 10,340 | |||||||||||||||||
Distributions (2) | (1,084) | (784) | (1,868) | (2,887) | (2,008) | (4,895) | |||||||||||||||||
Foreign exchange, market value and other (3) | 19 | 572 | 591 | 359 | 1,291 | 1,650 | |||||||||||||||||
| Balance, end of period | $ | 41,077 | $ | 38,065 | $ | 79,142 | $ | 41,077 | $ | 38,065 | $ | 79,142 | |||||||||||
(1)Contributions represent (i) new commitments from customized separate accounts and specialized funds that earn fees on a committed capital fee base and (ii) capital contributions to underlying investments from customized separate accounts and specialized funds that earn fees on a net invested capital or NAV fee base.
(2)Distributions represent (i) returns of capital in customized separate accounts and specialized funds that earn fees on a net invested capital or NAV fee base, (ii) reductions in fee-earning AUM from separate accounts and specialized funds that moved from a committed capital to net invested capital fee base and (iii) reductions in fee-earning AUM from customized separate accounts and specialized funds that are no longer earning fees.
(3)Foreign exchange, market value and other consists primarily of (i) the impact of foreign exchange rate fluctuations for customized separate accounts and specialized funds that earn fees on non-U.S. dollar denominated commitments and (ii) market value appreciation (depreciation) from customized separate accounts and specialized funds that earn fees on a NAV fee base.
Three months ended December 31, 2025
Fee-earning AUM increased $2.7 billion during the three months ended December 31, 2025, due primarily to contributions from customized separate accounts and specialized funds.
Customized separate accounts fee-earning AUM increased $0.3 billion for the three months ended December 31, 2025. Customized separate accounts contributions were $1.3 billion for the three months ended December 31, 2025, due to the addition of new accounts, additional allocations from existing accounts and continued investment activity. Distributions were $1.1 billion for the three months ended December 31, 2025, due primarily to $0.6 billion from returns of capital in accounts earning fees on a net invested capital or NAV fee base, $0.3 billion from accounts moving from a committed to net invested capital fee base, and $0.2 billion from accounts reaching the end of their fund term.
Specialized funds fee-earning AUM increased $2.4 billion for the three months ended December 31, 2025. Specialized fund contributions were $2.7 billion for the three months ended December 31, 2025, due primarily to $2.0 billion from our evergreen funds. Distributions were $0.8 billion for the three months ended December 31, 2025, due primarily to $0.7 billion from returns of capital and redemptions in funds earning fees on a net invested capital or NAV fee base.
Nine Months Ended December 31, 2025
Fee-earning AUM increased $7.1 billion during the nine months ended December 31, 2025, due primarily to contributions from customized separate accounts and specialized funds.
Customized separate accounts fee-earning AUM increased $1.7 billion for the nine months ended December 31, 2025. Customized separate accounts contributions were $4.3 billion for the nine months ended December 31, 2025, due to the addition of new accounts, additional allocations from existing accounts and continued investment activity. Distributions were $2.9 billion for the nine months ended December 31, 2025,
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due primarily to $1.5 billion from returns of capital in accounts earning fees on a net invested capital or NAV fee base, $0.7 billion from accounts moving from a committed to net invested capital fee base and $0.7 billion from accounts reaching the end of their fund term.
Specialized funds fee-earning AUM increased $5.4 billion for the nine months ended December 31, 2025. Specialized fund contributions were $6.1 billion for the nine months ended December 31, 2025, due primarily to $4.6 billion from our evergreen funds. Distributions were $2.0 billion for the nine months ended December 31, 2025 due primarily to $1.6 billion from returns of capital and redemptions in funds earning fees on a net invested capital or NAV fee base and $0.4 billion from accounts reaching the end of their fund term.
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Non-GAAP Financial Measures
Below is a description of our unaudited non-GAAP financial measures. These are not measures of financial performance under GAAP and should not be considered a substitute for the most directly comparable GAAP measures, which are reconciled below. These measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these measures in isolation or as a substitute for GAAP measures. Other companies may calculate these measures differently than we do, limiting their usefulness as a comparative measure.
Fee Related Earnings
Fee Related Earnings (“FRE”) is used to highlight earnings from revenues that are measured and received on a recurring basis. FRE represents net income excluding (a) incentive fees, net of fee related performance revenues, and related compensation, (b) equity-based compensation, (c) interest income and expense, (d) income tax expense, (e) equity in income of investees, (f) non-operating gain, net and (g) certain other significant items that we believe are not indicative of our core performance. We believe FRE is useful to investors because it provides additional insight into the operating profitability of our business. FRE is presented before income taxes.
Fee related performance revenues (“FRPR”) are incentive fees expected to be measured and received from certain of our funds on a recurring basis and are not dependent on realization events of the fund’s underlying investments. FRPR includes incentive fees earned from consolidated Funds that are eliminated under GAAP. We believe FRPR is useful to investors because it provides additional insight into our recurring revenues.
Beginning in the fourth quarter of fiscal 2025, we modified our definition of FRE to exclude equity-based compensation and include FRPR. Equity-based compensation is non-cash compensation provided to retain employees and align employee and stockholder interest. It is not directly correlated with our operating results. Fee related performance revenues are expected to be received on a recurring basis depending upon performance of certain funds that pay incentive fees on a high-water mark basis. We believe that reporting non-GAAP results inclusive of these changes provides a supplemental view of our ongoing performance that is useful and relevant to our investors. As a result of the change, prior period amounts have been recast to reflect the updated presentation.
Adjusted EBITDA
Adjusted EBITDA is an internal measure of profitability. We believe Adjusted EBITDA is useful to investors because it enables them to better evaluate the performance of our core business across reporting periods. Adjusted EBITDA represents net income excluding (a) interest expense on our outstanding debt, (b) income tax expense, (c) depreciation and amortization expense, (d) equity-based compensation expense, (e) non-operating gain, net and (f) certain other significant items that we believe are not indicative of our core performance. Adjusted EBITDA also includes FRPR related to consolidated Funds and management fees related to consolidated Funds.
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The following table shows a reconciliation of net income attributable to Hamilton Lane Incorporated to FRE and Adjusted EBITDA 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 | 2025 | 2024 | |||||||||||||||||||
Net income attributable to Hamilton Lane Incorporated | $ | 58,372 | $ | 52,972 | $ | 183,007 | $ | 166,918 | |||||||||||||||
Income attributable to non-controlling interests in Partnerships | 124 | 94 | 506 | 827 | |||||||||||||||||||
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C. | 23,426 | 23,159 | 70,483 | 70,654 | |||||||||||||||||||
| Income attributable to non-controlling interests in Consolidated Funds | 10,875 | 1,230 | 19,475 | 2,064 | |||||||||||||||||||
Incentive fees | (45,412) | (41,979) | (136,427) | (128,964) | |||||||||||||||||||
Incentive fee related compensation (1) | 7,726 | 19,926 | 30,728 | 60,661 | |||||||||||||||||||
| Fee related performance revenues | 31,947 | — | 77,682 | 1,228 | |||||||||||||||||||
Equity-based compensation | 12,992 | 11,785 | 38,180 | 19,681 | |||||||||||||||||||
| Consolidated Funds related general, administrative and other expenses | 298 | 54 | 1,389 | 203 | |||||||||||||||||||
| Management fees related to Consolidated Funds | 270 | — | 327 | — | |||||||||||||||||||
| Non-operating income related compensation | — | 507 | — | 784 | |||||||||||||||||||
| Income tax expense | 27,253 | 12,696 | 59,609 | 33,555 | |||||||||||||||||||
| Other income (expense) | (34,044) | (14,429) | (90,384) | (41,496) | |||||||||||||||||||
Fee Related Earnings | $ | 93,827 | $ | 66,015 | $ | 254,575 | $ | 186,115 | |||||||||||||||
Depreciation and amortization | 2,429 | 2,385 | 7,475 | 7,065 | |||||||||||||||||||
Incentive fees | 45,412 | 41,979 | 136,427 | 128,964 | |||||||||||||||||||
Incentive fees attributable to non-controlling interests | — | (29) | (179) | (29) | |||||||||||||||||||
Incentive fee related compensation (1) | (7,726) | (19,926) | (30,728) | (60,661) | |||||||||||||||||||
| Fee related performance revenues | (31,947) | — | (77,682) | (1,228) | |||||||||||||||||||
| Non-operating income related compensation | — | (507) | — | (784) | |||||||||||||||||||
| Fee related performance revenues related to Consolidated Funds | 2,801 | — | 6,126 | — | |||||||||||||||||||
Interest income | 2,656 | 2,761 | 8,093 | 4,933 | |||||||||||||||||||
Adjusted EBITDA | $ | 107,452 | $ | 92,678 | $ | 304,107 | $ | 264,375 | |||||||||||||||
(1) Incentive fee related compensation includes incentive fee compensation expense and bonus related to carried interest that is classified as base compensation.
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Non-GAAP Earnings Per Share
Non-GAAP earnings per share (“EPS”) measures our per-share earnings excluding certain significant items that we believe are not indicative of our core performance and assuming all Class B and Class C units in HLA were exchanged for Class A common stock in HLI. Non-GAAP EPS is calculated as adjusted net income divided by adjusted shares outstanding. Adjusted net income is income before taxes fully taxed at our estimated statutory tax rate and excludes any impact of changes in carrying amount of our redeemable NCI. Adjusted shares outstanding for the three and nine months ended December 31, 2025 and 2024 are equal to weighted-average shares of Class A common stock outstanding - diluted. We believe adjusted net income and non-GAAP EPS are useful to investors because they enable them to better evaluate total and per-share operating performance across reporting periods.
The following table shows a reconciliation of adjusted net income to net income attributable to Hamilton Lane Incorporated for the three and nine months ended December 31, 2025 and 2024:
| Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||||||||||
| (in thousands, except share and per-share amounts) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
Net income attributable to Hamilton Lane Incorporated | $ | 58,372 | $ | 52,972 | $ | 183,007 | $ | 166,918 | |||||||||||||||
Income attributable to non-controlling interests in Hamilton Lane Advisors, L.L.C. | 23,426 | 23,159 | 70,483 | 70,654 | |||||||||||||||||||
Income tax expense | 27,253 | 12,696 | 59,609 | 33,555 | |||||||||||||||||||
Adjusted pre-tax net income | 109,051 | 88,827 | 313,099 | 271,127 | |||||||||||||||||||
Adjusted income taxes (1) | (24,593) | (20,785) | (72,952) | (63,444) | |||||||||||||||||||
Adjusted net income | $ | 84,458 | $ | 68,042 | $ | 240,147 | $ | 207,683 | |||||||||||||||
| Adjusted shares outstanding | 54,463,537 | 54,453,665 | 54,479,897 | 54,368,078 | |||||||||||||||||||
Non-GAAP EPS | $ | 1.55 | $ | 1.25 | $ | 4.41 | $ | 3.82 | |||||||||||||||
(1) Represents corporate income taxes at our estimated statutory tax rate of 23.3% and 23.4% for the three and nine months ended December 31, 2025 and 2024, respectively, applied to adjusted pre-tax net income. The 23.3% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.3%. The 23.4% is based on a federal tax statutory rate of 21.0% and a combined state income tax rate net of federal benefits of 2.4%.
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Investment Performance
The following tables present information relating to the historical performance of our specialized funds with fund families having at least two distinct vintages and most recent fund sizes of greater than $500 million per fund. The data are presented from the date indicated through September 30, 2025 and have not been adjusted to reflect acquisitions or disposals of investments subsequent to that date.
When considering the data presented below, note that the historical results of our specialized funds are not indicative of the future results you should expect from such investments, from any future investment funds we may raise or from an investment in our Class A common stock, in part because:
•market conditions and investment opportunities during previous periods may have been significantly more favorable for generating positive performance than those we may experience in the future;
•the performance of our funds is generally calculated on the basis of the NAV of the funds’ investments, including unrealized gains, which may never be realized;
•our historical returns derive largely from the performance of our earlier funds, whereas future fund returns will depend increasingly on the performance of our newer funds or funds not yet formed;
•our newly-established funds may generate lower returns during the period that they initially deploy their capital;
•competition for investment opportunities, resulting from the increasing amount of capital invested in private markets alternatives, may increase the cost and reduce the availability of suitable investments, thereby reducing investment returns in the future;
•the performance of particular funds also will be affected by risks of the industries and businesses in which they invest; and
•we may create new funds that reflect a different asset mix and new investment strategies, as well as a varied geographic and industry exposure, compared to our historical funds, and any such new funds could have different returns than our previous funds.
The historical and potential future returns of the investment funds we manage are not directly linked to returns on our Class A common stock. Therefore, you should not conclude that continued positive performance of the investment funds we manage will necessarily result in positive returns on an investment in our Class A common stock. As used in this discussion, internal rate of return (“IRR”) is calculated on a pooled basis using daily cash flows. See “—Performance Methodology” below for more information on how our returns are calculated.
Specialized Fund Performance
We organize, invest and manage specialized primary, secondary and direct investment funds. Our specialized funds invest across a variety of private markets and include equity, equity-linked and credit funds offered on standard terms, as well as shorter duration, opportunistically oriented funds. Below is performance information across our various specialized funds. Substantially all of these funds are globally focused, and they are grouped by the investment strategy utilized.
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| Fund | Vintage year | Fund size ($M) | Capital invested ($M) | Gross multiple | Net Multiple | Gross IRR (%) | Net IRR (%) | Gross Spread vs. S&P 500 PME | Net Spread vs. S&P 500 PME | Gross Spread vs. MSCI World PME | Net Spread vs. MSCI World PME | ||||||||||||||||||||||||
Primaries (Diversified) | |||||||||||||||||||||||||||||||||||
| PEF I | 1998 | 122 | 117 | 1.3 | 1.2 | 5.4% | 2.5% | 378 bps | 76 bps | 322 bps | 16 bps | ||||||||||||||||||||||||
| PEF IV | 2000 | 250 | 238 | 1.7 | 1.5 | 16.2% | 11.2% | 1,302 bps | 828 bps | 1,170 bps | 708 bps | ||||||||||||||||||||||||
| PEF V | 2003 | 135 | 133 | 1.7 | 1.6 | 14.2% | 9.6% | 841 bps | 363 bps | 950 bps | 466 bps | ||||||||||||||||||||||||
| PEF VI | 2007 | 494 | 513 | 1.6 | 1.6 | 11.5% | 8.6% | 55 bps | (192 bps) | 391 bps | 137 bps | ||||||||||||||||||||||||
| PEF VII | 2010 | 262 | 290 | 1.5 | 1.5 | 11.5% | 7.5% | (260 bps) | (639 bps) | 131 bps | (253 bps) | ||||||||||||||||||||||||
| PEF VIII | 2012 | 427 | 435 | 1.4 | 1.4 | 8.1% | 5.7% | (558 bps) | (796 bps) | (242 bps) | (482 bps) | ||||||||||||||||||||||||
| PEF IX | 2015 | 517 | 528 | 1.9 | 1.9 | 16.7% | 14.5% | 175 bps | (51 bps) | 476 bps | 247 bps | ||||||||||||||||||||||||
| PEF X | 2018 | 278 | 272 | 1.6 | 1.5 | 14.2% | 11.6% | (125 bps) | (418 bps) | 123 bps | (178 bps) | ||||||||||||||||||||||||
| Secondaries | |||||||||||||||||||||||||||||||||||
| Pre-Fund | — | — | 362 | 1.5 | N/A | 17.1% | N/A | 1,332 bps | N/A | 1,173 bps | N/A | ||||||||||||||||||||||||
| Secondary Fund I | 2005 | 360 | 353 | 1.2 | 1.2 | 5.2% | 3.8% | 113 bps | (63 bps) | 341 bps | 157 bps | ||||||||||||||||||||||||
| Secondary Fund II | 2008 | 591 | 603 | 1.5 | 1.4 | 19.9% | 13.5% | 451 bps | (190 bps) | 869 bps | 215 bps | ||||||||||||||||||||||||
| Secondary Fund III | 2012 | 909 | 841 | 1.4 | 1.3 | 12.7% | 10.0% | (85 bps) | (379 bps) | 301 bps | 13 bps | ||||||||||||||||||||||||
| Secondary Fund IV | 2016 | 1,917 | 2,115 | 1.6 | 1.5 | 14.4% | 14.8% | (57 bps) | (57 bps) | 255 bps | 267 bps | ||||||||||||||||||||||||
| Secondary Fund V | 2019 | 3,929 | 3,915 | 1.5 | 1.5 | 15.3% | 13.4% | 156 bps | (29 bps) | 384 bps | 203 bps | ||||||||||||||||||||||||
| Secondary Fund VI | 2022 | 5,603 | 4,014 | 1.4 | 1.4 | 35.1% | 38.3% | 1,221 bps | 1,925 bps | 1,333 bps | 1,926 bps | ||||||||||||||||||||||||
| Direct/Co-investments | |||||||||||||||||||||||||||||||||||
| Pre-Fund | — | — | 244 | 1.9 | N/A | 21.3% | N/A | 1,655 bps | N/A | 1,600 bps | N/A | ||||||||||||||||||||||||
| Co-Investment Fund | 2005 | 604 | 578 | 1.0 | 0.9 | 0.2% | (1.4)% | (570 bps) | (755 bps) | (319 bps) | (510 bps) | ||||||||||||||||||||||||
| Co-Investment Fund II | 2008 | 1,195 | 1,158 | 2.2 | 1.9 | 17.9% | 14.3% | 551 bps | 174 bps | 924 bps | 542 bps | ||||||||||||||||||||||||
| Co-Investment Fund III | 2014 | 1,243 | 1,324 | 1.8 | 1.6 | 14.8% | 11.8% | 12 bps | (281 bps) | 337 bps | 39 bps | ||||||||||||||||||||||||
| Co-Investment Fund IV | 2018 | 1,698 | 1,511 | 2.5 | 2.2 | 23.0% | 21.6% | 751 bps | 592 bps | 1,023 bps | 858 bps | ||||||||||||||||||||||||
| Equity Opportunities Fund V | 2021 | 2,069 | 1,830 | 1.4 | 1.2 | 10.3% | 8.4% | (485 bps) | (723 bps) | (310 bps) | (553 bps) | ||||||||||||||||||||||||
| Equity Opportunities Fund VI | 2024 | 1,554 | 520 | 1.1 | NA | 22.0% | NA | (137 bps) | NA | (181 bps) | NA | ||||||||||||||||||||||||
| Fund | Vintage year | Fund size ($M) | Capital invested ($M) | Gross multiple | Net Multiple | Gross IRR (%) | Net IRR (%) | Gross Spread vs DJB GI | Net Spread vs DJB GI | Gross Spread vs MSCI World Infra | Net Spread vs MSCI World Infra | ||||||||||||||||||||||||
| Infrastructure Funds | |||||||||||||||||||||||||||||||||||
| Infrastructure Opps Fund I | 2020 | 489 | 409 | 1.5 | 1.4 | 16.6% | 14.2% | 810 bps | 545 bps | 518 bps | 218 bps | ||||||||||||||||||||||||
| Infrastructure Opps Fund II | 2024 | 900 | 207 | 1.3 | 1.2 | 28.7% | 26.7% | 1,121 bps | 919 bps | 607 bps | 369 bps | ||||||||||||||||||||||||
| Fund | Vintage year | Fund size ($M) | Capital invested ($M) | Gross multiple | Net Multiple | Gross IRR (%) | Net IRR (%) | Gross Spread vs. ICE BofA US HY | Net Spread vs. ICE BofA US HY | Gross Spread vs. CS LL PME | Net Spread vs. CS LL PME | ||||||||||||||||||||||||
Strategic Opportunities (Tail-end secondaries and credit) | |||||||||||||||||||||||||||||||||||
| Strat Opps 2015 | 2015 | 71 | 68 | 1.3 | 1.2 | 14.1% | 10.6% | 566 bps | 219 bps | 862 bps | 513 bps | ||||||||||||||||||||||||
| Strat Opps 2016 | 2016 | 214 | 216 | 1.2 | 1.1 | 8.8% | 6.4% | 247 bps | 11 bps | 388 bps | 155 bps | ||||||||||||||||||||||||
| Strat Opps 2017 | 2017 | 435 | 448 | 1.3 | 1.2 | 9.4% | 7.1% | 475 bps | 237 bps | 497 bps | 276 bps | ||||||||||||||||||||||||
| Strat Opps IV (Series 2018) | 2018 | 889 | 870 | 1.3 | 1.2 | 8.3% | 6.3% | 384 bps | 159 bps | 427 bps | 194 bps | ||||||||||||||||||||||||
| Strat Opps V (Series 2019) | 2019 | 762 | 716 | 1.4 | 1.3 | 12.8% | 10.2% | 845 bps | 526 bps | 681 bps | 357 bps | ||||||||||||||||||||||||
| Strat Opps VI (Series 2020) | 2021 | 898 | 854 | 1.3 | 1.2 | 8.2% | 6.4% | 474 bps | 208 bps | 192 bps | (31 bps) | ||||||||||||||||||||||||
| Strat Opps VII | 2022 | 953 | 892 | 1.3 | 1.2 | 14.2% | 11.7% | 447 bps | 165 bps | 488 bps | 235 bps | ||||||||||||||||||||||||
| Strat Opps VIII | 2023 | 700 | 590 | 1.1 | 1.1 | 14.5% | 11.5% | 517 bps | 199 bps | 727 bps | 415 bps | ||||||||||||||||||||||||
| Strat Opps IX | 2024 | 381 | 178 | 1.1 | 1.1 | 27.4% | 25.6% | 1,741 bps | 1,582 bps | 2,079 bps | 1,949 bps | ||||||||||||||||||||||||
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Performance Methodology
The indices presented for comparison are the S&P 500, MSCI World, Dow Jones Brookfield Global Infrastructure (“DJB GI”), MSCI World Infrastructure (“MSCI Infra”), ICE BofA US High Yield Index (“ICE BofA US HY”) and Credit Suisse Leverage Loan (“CS LL”), calculated on a public market equivalent (“PME”) basis. We believe these indices are commonly used by private markets and credit investors to evaluate performance. The PME calculation methodology allows private markets investment performance to be evaluated against a public index and assumes that capital is being invested in, or withdrawn from, the index on the days the capital was called and distributed from the underlying fund managers. The S&P 500 Index is a total return capitalization-weighted index that measures the performance of 500 U.S. large cap stocks. The DJB GI Index includes companies domiciled globally that qualify as “pure-play” infrastructure companies, which are companies whose primary business is the ownership and operation of infrastructure assets, activities that generally generate long-term stable cash flows. The MSCI Infra Index covers mid and large cap infrastructure assets across the 23 developed market countries. The MSCI World Index is a free float-adjusted market capitalization-weighted index of over 1,600 world stocks that is designed to measure the equity market performance of developed markets. The ICE BofA HY Index tracks the performance of US dollar denominated below investment grade rated corporate debt publicly issued in the US domestic market. The ICE BofA HY Index is rebalanced monthly. The CS LL Index is an index designed to mirror the investable universe of the U.S. dollar denominated leveraged loan market. Loans must be rated 5B or lower and the index frequency is monthly.
Our IRR represents the pooled IRR for all discretionary investments for the period from inception to September 30, 2025. Gross IRR is presented net of management fees, carried interest and expenses charged by the general partners of the underlying investments, but does not include our management fees, carried interest or expenses. Our gross IRR would decrease with the inclusion of our management fees, carried interest and expenses. Net IRR is net of all management fees, carried interest and expenses charged by the general partners of the underlying investments, as well as by us. Net IRR figures for our funds do not include cash flows attributable to the general partner. Note that secondary portfolio IRRs can be initially impacted by purchase discounts (or premiums) paid at the closing of a transaction, the impact of which will diminish over time.
“Capital Invested” refers to the total amount of all investments made by a fund, including commitment-reducing and non-commitment-reducing capital calls. “Multiple” represents total distributions from underlying investments to the fund plus the fund’s market value divided by total contributed capital. “Gross Multiple” is presented net of management fees, carried interest and expenses charged by the fund managers of the underlying investments.
Specialized fund and pre-fund performance does not include ten funds-of-funds that have investor-specific investment guidelines.
Many of our specialized funds utilize revolving credit facilities, which provide capital that is available to fund investments or pay partnership expenses and management fees. Borrowings may be paid down from time to time with investor capital contributions or distributions from investments. The use of a credit facility affects the fund’s return and magnifies the performance on the upside or on the downside.
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Liquidity and Capital Resources
Historical Liquidity and Capital Resources
We have managed our historical liquidity and capital requirements primarily through the receipt of management and advisory fee revenues. Our primary cash flow activities involve: (1) generating cash flow from operations, which largely includes management and advisory fees; (2) realizations generated from our investment activities; (3) funding capital commitments that we have made to certain of our specialized funds and customized separate accounts; (4) making dividend payments to our stockholders and distributions to holders of HLA units; and (5) borrowings, interest payments and repayments under our outstanding debt. As of December 31, 2025 and March 31, 2025, our cash and cash equivalents were $338.5 million and $229.2 million, respectively.
Our material sources of cash from our operations include: (1) management and advisory fees, which are collected monthly or quarterly; (2) incentive fees, which are volatile and largely unpredictable as to amount and timing; and (3) fund distributions related to investments in our specialized funds and certain customized separate accounts that we manage. We use cash flow from operations primarily to pay compensation and related expenses, general, administrative and other expenses, debt service, capital expenditures and distributions to our owners and to fund commitments to certain of our specialized funds and customized separate accounts. If cash flow from operations was insufficient to fund distributions to our owners, we expect that we would suspend paying such distributions.
We have also accessed the capital markets and used proceeds from sales of our Class A common stock to settle in cash exchanges of HLA membership interests by direct and indirect owners of HLA pursuant to our exchange agreement.
Finally, we have used available cash and borrowings from our Loan Agreements (defined below) to make strategic investments in companies that seek to offer technology-driven private markets data and wealth management solutions. We have used proceeds from the issuance of our Senior Notes (defined below) to seed new specialized funds and for general corporate purposes.
Senior Notes and Loan Agreements
On October 8, 2024, HLA issued $100 million aggregate principal amount of 5.28% senior notes due October 15, 2029 (the “Senior Notes”) pursuant to a note purchase agreement (the “Note Purchase Agreement”) among HLA and the institutional purchasers party thereto in a private placement transaction. Interest on the Senior Notes is payable semi-annually in arrears and commenced on April 15, 2025. Interest on the Senior Notes accrues from and including October 8, 2024. The Senior Notes will mature on October 15, 2029.
We maintain our Term Loan and Security Agreement (as amended, the “Term Loan Agreement”), Revolving Loan and Security Agreement (as amended, the “Revolving Loan Agreement”), 2020 Multi-Draw Term Loan and Security Agreement (as amended, the “2020 Multi-Draw Term Loan Agreement”), and 2022 Multi-Draw Term Loan Agreement (as amended, the “2022 Multi-Draw Term Loan Agreement” and, together with the Term Loan Agreement, the Revolving Loan Agreement, and the 2020 Multi-Draw Term Loan Agreement, the “Loan Agreements”) with JPMorgan Chase Bank, N.A. (“JPMorgan”). The Loan Agreements are cross-collateralized and cross-defaulted and the aggregate principal amount of loans that may be outstanding under all of the Loan Agreements is subject to an aggregate cap of $325 million (the “Cap”).
The Term Loan Agreement has a maturity date of July 1, 2029 and the interest rate is a floating per annum rate equal to the prime rate minus 1.25% subject to a floor of 3.00%. As of December 31, 2025, we had an outstanding balance of $84 million under the Term Loan Agreement.
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The Revolving Loan Agreement provides that the aggregate outstanding balance will not exceed $50 million, subject to the Cap, and has a maturity date of October 6, 2027. The interest rate is a floating per annum rate equal to the prime rate minus 1.50% subject to a floor of 2.25%. As of December 31, 2025, we did not have an outstanding balance under the Revolving Loan Agreement.
The 2020 Multi-Draw Term Loan Agreement provides for a term loan in the aggregate principal amount of $100 million with a maturity date of April 1, 2030. The interest rate is a fixed per annum rate of 3.50%. As of December 31, 2025, we had an outstanding balance of $98 million under the 2020 Multi-Draw Term Loan Agreement.
The 2022 Multi-Draw Term Loan Agreement has a maturity date of October 1, 2029. On October 1, 2025, we amended our 2022 Multi-Draw Term Loan Agreement to, among other things, (a) change the aggregate principal amount of term loans from $75 million to $50 million, subject to the Cap, (b) change certain dates related to interest payments and repayments of the term loan thereunder, and (c) change the interest rate for borrowings thereunder to equal the greater of (i) the prime rate minus 1.35% and (ii) 3.00%. As of December 31, 2025, we did not have an outstanding balance under the 2022 Multi-Draw Term Loan Agreement. We are entitled to request term loans not to exceed $50 million in the aggregate, subject to the Cap, through October 6, 2027.
The Loan Agreements and the Note Purchase Agreement contain covenants that, among other things, limit HLA’s ability to incur indebtedness, transfer or dispose of assets, merge with other companies, create, incur or allow liens, make investments, pay dividends or make distributions, engage in transactions with affiliates and take certain actions with respect to management fees. The Loan Agreements also require HLA to maintain, among other requirements, (a) a specified amount of management fees, (b) a specified amount of adjusted EBITDA minus dividend distributions (other than tax distributions), as defined in the Loan Agreements, and (c) a specified minimum tangible net worth, during the term of each of the Loan Agreements. The Note Purchase Agreement contains certain covenants, including (a) a Consolidated Leverage Ratio (as defined in the Note Purchase Agreement) of 3.50 to 1.00 as of March 31 and September 30 of each calendar year (each, a “Test Date”), (b) a minimum annual Management Fees (as defined in the Note Purchase Agreement) covenant as of each Test Date of not less than the greater of (i) $185 million and (ii) the amount equal to 80% of the Management Fees received by HLA during the six calendar month period ended on the immediately preceding Test Date, and other customary covenants. The obligations under the Loan Agreements are secured by substantially all the assets of HLA. As of December 31, 2025 and March 31, 2025, the principal amount of debt outstanding equaled $281.9 million and $293.1 million, respectively. We had $143.1 million in availability under the Loan Agreements as of December 31, 2025.
Future Sources and Uses of Liquidity
We generate significant cash flows from operating activities. We believe that we will be able to continue to meet our short-term and long-term liquidity and capital requirements through our cash flows from operating activities, existing cash and cash equivalents and our ability to obtain future external financing. However, the availability of capital from the Loan Agreements and our cash balances are exposed to the credit risks of the financial institutions at which they are held. If events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any such events, occur, our ability to access existing cash, cash equivalents and investments, or to access existing or enter into new banking arrangements or facilities to pay operational and other costs, may be threatened or lost.
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We will also continue to evaluate opportunities, based on market conditions, to access the capital markets for working capital or to use proceeds from sales of our Class A common stock to settle in cash exchanges of HLA membership interests by direct and indirect owners of HLA pursuant to our exchange agreement. The timing or size of any potential transactions will depend on a number of factors, including market opportunities and our views regarding our capital and liquidity positions and potential future needs. There can be no assurance that any such transactions will be completed on favorable terms, or at all.
We will also continue to evaluate opportunities to make strategic investments in companies that seek to offer technology-driven private markets data and wealth management solutions.
In November 2018, we authorized a program to repurchase up to 6% of the outstanding shares of our Class A common stock, not to exceed $50 million (the “Stock Repurchase Program”). The Stock Repurchase Program does not include specific price targets or timetables and may be suspended or terminated by us at any time. We intend to finance the purchases using available working capital and/or external financing. The Stock Repurchase Program expires 12 months after the date of the first acquisition under the authorization. We have not repurchased any shares of our Class A common stock under the Stock Repurchase Program, and therefore the full purchase authority remains available. Our board of directors periodically reviews the Stock Repurchase Program and most recently re-approved it in December 2024.
We expect that our primary short-term and long-term liquidity needs will comprise cash to: (1) provide capital to facilitate the growth of our business; (2) fund commitments to our investments; (3) pay operating expenses, including cash compensation to our employees; (4) make payments and/or exercise early termination buyout rights under the tax receivable agreement; (5) fund capital expenditures, make strategic investments and warehouse investments for our Funds; (6) pay interest and principal due on our outstanding debt; (7) pay income taxes; (8) make dividend payments to our stockholders and distributions to holders of HLA units in accordance with our distribution policy; (9) settle exchanges of HLA membership interests by direct and indirect owners of HLA pursuant to our exchange agreement from time to time; (10) settle exercises of the Warrant in cash at our election; and (11) fund purchases of our Class A common stock pursuant to the Stock Repurchase Program.
We are required to maintain minimum net capital balances for regulatory purposes for certain of our foreign subsidiaries and our broker-dealer subsidiary, and minimum cash balances related to our self-funded medical insurance plan put in place as of January 1, 2025. The net capital requirements are met by retaining cash. As a result, we may be restricted in our ability to transfer cash between different operating entities and jurisdictions. As of each of December 31, 2025 and March 31, 2025, we were required to maintain approximately $7.8 million and $6.3 million, respectively, in liquid net assets to meet regulatory net capital and capital adequacy requirements. We are in compliance with these regulatory requirements.
Dividend Policy
The declaration and payment by us of any future dividends to holders of our Class A common stock is at the sole discretion of our board of directors. We intend to continue to pay a cash dividend on a quarterly basis. Subject to funds being legally available, we will cause HLA to make pro rata distributions to its members, including us, in an amount at least sufficient to allow us to pay all applicable taxes, to make payments under the tax receivable agreement, and to pay our corporate and other overhead expenses.
Tax Receivable Agreement
We expect that periodic exchanges of membership units of HLA by members of HLA will result in increases in the tax basis in our share of the assets of HLA that otherwise would not have been available. These increases in tax basis are expected to increase our depreciation and amortization deductions and create other tax benefits and therefore may reduce the amount of tax that we would otherwise be required to pay in the future. The tax receivable agreement will require us to pay 85% of the amount of these and certain other
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tax benefits, if any, that we realize (or are deemed to realize in the case of an early termination payment, a change in control or a material breach by us of our obligations under the tax receivable agreement) to the pre-IPO members of HLA.
Cash Flows
Nine months ended December 31, 2025 and 2024
| Nine Months Ended December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
| Net cash provided by operating activities | $ | 321,944 | $ | 261,539 | |||||||
| Net cash used in investing activities | $ | (345,020) | $ | (67,949) | |||||||
| Net cash provided by financing activities | $ | 86,433 | $ | 14,104 | |||||||
Operating Activities
Operating activities generally reflect our earnings in the respective periods after adjusting for significant non-cash activity, including equity in income of investees, equity-based compensation, lease expense, fair value adjustments to investments and depreciation and amortization, all of which are included in earnings. For the nine months ended December 31, 2025 and 2024, our net cash provided by operating activities was driven primarily by receipts of management fees and incentive fees, partially offset by payment of operating expenses, which includes compensation and benefits and general, administrative and other expenses.
Investing Activities
Investing activities generally reflect cash used for fixed asset purchases and contributions to and distributions from our investments. For the nine months ended December 31, 2025 and 2024, our net cash used in investing activities was driven primarily by purchases of furniture, fixtures and equipment, purchases of investments, and net contributions to our Funds. Net cash provided by investing activities for the nine months ended December 31, 2025 was also driven by the sale of a wholly-owned Consolidated Fund.
Financing Activities
Our financing activities generally reflect cash received from debt and equity financings, payments to owners in the form of dividends, distributions and repurchases of shares and scheduled drawdowns and repayments of our outstanding debt. For the nine months ended December 31, 2025 and 2024, our net cash provided by financing activities was driven primarily by dividends paid to stockholders, payments under the tax receivable agreement, distributions to HLA members, repayment of our outstanding debt and contributions from NCI in Consolidated Funds.
Off-Balance Sheet Arrangements
There have been no material changes in our off-balance sheet arrangements discussed in our 2025 Form 10-K.
Contractual Obligations, Commitments and Contingencies
There have been no material changes outside of the ordinary course of business in our contractual obligations, commitments and contingencies from those specified in our 2025 Form 10-K.
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Critical Accounting Estimates
We prepare our condensed consolidated financial statements in accordance with GAAP for interim financial information including our accounts, our wholly owned subsidiaries, and entities that we control, for which all intercompany transactions and balances have been eliminated in consolidation. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Management believes it has made all necessary adjustments (which consisted of only normal recurring items) so that the condensed consolidated financial statements are presented fairly and that estimates made in preparing the condensed consolidated financial statements are reasonable and prudent. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances. These assumptions, estimates or judgments, however, are both subjective and subject to change, and actual results may differ from our assumptions and estimates.
For a more complete discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our condensed consolidated financial statements, please refer to our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K.
Recent Accounting Pronouncements
Information regarding recent accounting developments and their impact on our results can be found in Note 2, “Summary of Significant Accounting Policies” in the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
In the normal course of business, we are exposed to a broad range of risks inherent in the financial markets in which we participate, including price risk, interest-rate risk, access to and cost of financing risk, liquidity risk, counterparty risk and foreign exchange-rate risk. Potentially negative effects of these risks may be mitigated to a certain extent by those aspects of our investment approach, investment strategies, fundraising practices or other business activities that are designed to benefit, either in relative or absolute terms, from periods of economic weakness, tighter credit or financial market dislocations.
Our predominant exposure to market risk is related to our role as general partner or investment manager for our specialized funds and customized separate accounts and the sensitivities to movements in the fair value of their investments, which may adversely affect our equity in income of investees. Since our management fees are generally based on commitments or net invested capital, our management fee and advisory fee revenue is not significantly impacted by changes in investment values.
Fair value of the financial assets and liabilities of our specialized funds and customized separate accounts may fluctuate in response to changes in the value of securities, foreign currency exchange rates, commodity prices and interest rates. The impact of investment risk is as follows:
•Equity in income of investees changes along with the realized and unrealized gains of the underlying investments in our specialized funds and certain customized separate accounts in which we have a general partner commitment. Our general partner investments include thousands of unique underlying portfolio investments with no significant concentration in any industry or country outside of the United States.
•Management fees from our specialized funds and customized separate accounts are not significantly affected by changes in fair value as the management fees are not generally based on the value of the specialized funds or customized separate accounts, but rather on the amount of capital committed or invested in the specialized funds or customized separate accounts, as applicable.
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•Incentive fees from our specialized funds, with the exception of certain evergreen funds, and customized separate accounts are not materially affected by changes in the fair value of unrealized investments because they are based on realized gains and subject to achievement of performance criteria rather than on the fair value of the specialized fund’s or customized separate account’s assets prior to realization. Minor decreases in underlying fair value would not affect the amount of deferred incentive fee revenue subject to clawback.
Exchange Rate Risk
Several of our specialized funds and customized separate accounts hold investments denominated in non-U.S. dollar currencies that may be affected by movements in the rate of exchange between the U.S. dollar and foreign currency, which could impact investment performance. The currency exposure related to investments in foreign currency assets is limited to our general partner interest, which is typically one percent of total capital commitments. We do not possess significant assets in foreign countries in which we operate or engage in material transactions in currencies other than the U.S. dollar. Therefore, changes in exchange rates are not expected to materially impact our financial statements.
Interest Rate Risk
As of December 31, 2025, we had $181.9 million in borrowings outstanding under our Loan Agreements. The annual interest rate on the Term Loan Agreement, which is at the prime rate minus 1.25%, subject to a floor of 3.00%, was 5.50% as of December 31, 2025. The annual interest rate on the Revolving Loan Agreement, which is at the prime rate minus 1.50%, subject to a floor of 2.25%, was 5.25% as of December 31, 2025. The annual interest rate on the 2022 Multi-Draw Term Loan Agreement, which is at the prime rate minus 1.35%, subject to a floor of 3.00%, was 5.40% as of December 31, 2025.
Based on the floating rate component of our Loan Agreements payable as of December 31, 2025, we estimate that a 100 basis point increase in interest rates would result in increased interest expense of approximately $0.8 million over the next 12 months.
Credit Risk
We are party to agreements providing for various financial services and transactions that contain an element of risk in the event that the counterparties are unable to meet the terms of such agreements. In such agreements, we depend on the respective counterparty to make payment or otherwise perform. We generally endeavor to minimize our risk of exposure by limiting the counterparties with which we enter into financial transactions to reputable financial institutions. In other circumstances, availability of financing from financial institutions may be uncertain due to market events, and we may not be able to access these financing markets.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Our management, including our Co-Chief Executive Officers and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2025. Our disclosure controls and procedures are intended to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Co-Chief Executive Officers and Chief Financial Officer, to allow timely decisions regarding required disclosure.
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In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on management’s evaluation, our Co-Chief Executive Officers and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level at December 31, 2025.
Changes in Internal Control over Financial Reporting
There have been no changes to our internal control over financial reporting during the quarter ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In the ordinary course of business, we may be subject to various legal, regulatory and/or administrative proceedings from time to time. Although there can be no assurance of the outcome of such proceedings, in the opinion of management, we do not believe it is probable that any pending or, to our knowledge, threatened legal proceeding or claim would individually or in the aggregate materially affect our condensed consolidated financial statements.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of our 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
We did not repurchase shares of our Class A common stock during the quarter ended December 31, 2025.
On November 6, 2018, we announced that our board of directors authorized the Stock Repurchase Program to repurchase, in the aggregate, up to 6% of the outstanding shares of our Class A common stock as of the date of the authorization, not to exceed $50 million. The authorization provides us the flexibility to repurchase shares in the open market or in privately negotiated transactions from time to time, based on market conditions and other factors. We have not repurchased any of our Class A common stock under the Stock Repurchase Program, so the full purchase authority remains available under this program, which expires 12 months after the date of the first acquisition under the authorization. Our board of directors most recently re-approved the Stock Repurchase Program in December 2024.
Item 5. Other Information
Trading Arrangements
During the three months ended December 31, 2025, none of our directors or officers adopted terminated
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Item 6. Exhibits
| Incorporated By Reference | Filed Herewith | ||||||||||||||||||||||
| Exhibit No. | Description of Exhibit | Form | Exhibit | Filing Date | File No. | ||||||||||||||||||
3.1 | Amended and Restated Certificate of Incorporation of Hamilton Lane Incorporated | 8-K | 3.1 | 9/12/23 | 001-38021 | ||||||||||||||||||
3.2 | Amended and Restated Bylaws of Hamilton Lane Incorporated | 8-K | 3.2 | 9/12/23 | 001-38021 | ||||||||||||||||||
4.1 | Form of Warrant | 10-Q | 4.1 | 11/4/25 | 001-38021 | ||||||||||||||||||
10.1º | Multi-Draw Term Loan and Security Agreement, dated October 20, 2022, between JPMorgan Chase Bank, N.A. and Hamilton Lane Advisors, L.L.C. (conformed through Second Amendment) | 8-K | 10.1 | 10/6/25 | 001-38021 | ||||||||||||||||||
10.2† | Amended and Restated Hamilton Lane Incorporated Employee Share Purchase Plan | X | |||||||||||||||||||||
31.1 | Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | |||||||||||||||||||||
31.2 | Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | |||||||||||||||||||||
31.3 | Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | |||||||||||||||||||||
32‡ | Certifications of Principal Executive Officers and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document | X | |||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | |||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | |||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | |||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | |||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | X | |||||||||||||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | X | |||||||||||||||||||||
º Confidential information in this exhibit has been omitted.
† Indicates a management contract or compensatory plan or arrangement.
‡ Furnished herewith.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by the Company in these agreements or other documents were made solely within
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the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 3rd day of February, 2026.
| HAMILTON LANE INCORPORATED | |||||
| By: | /s/ Jeffrey Armbrister | ||||
| Name: Jeffrey Armbrister | |||||
| Title: Chief Financial Officer and Treasurer (Principal Financial Officer and Authorized Signatory) | |||||
FAQ
How did Hamilton Lane (HLNE) perform financially in the December 31, 2025 quarter?
Hamilton Lane grew revenue and earnings in the quarter. Total revenues reached $198,589,000, up from $168,261,000 a year earlier, while net income attributable to Hamilton Lane increased to $58,372,000, compared with $52,972,000, reflecting stronger fee and investment income.
What were Hamilton Lane’s earnings per share and dividends for Class A stock?
Diluted earnings per share of Hamilton Lane Class A common stock were $1.37 for the quarter, up from $1.32 a year ago. Dividends declared per Class A share rose to $0.54, compared with $0.49, supported by solid profitability and cash generation.
How strong was Hamilton Lane’s cash flow and balance sheet as of December 31, 2025?
Hamilton Lane generated robust operating cash flow of $321,944,000 for the nine months ended December 31, 2025. The company reported $338,504,000 of cash and cash equivalents, total assets of $2,170,813,000, total liabilities of $844,762,000, and total equity of $1,326,051,000.
What is the nature of Hamilton Lane’s strategic partnership with Guardian?
Hamilton Lane entered a long-term partnership with Guardian on November 2, 2025. The firm will oversee Guardian’s existing nearly $5 billion private equity portfolio, and Guardian committed about $500,000,000 per year in private equity for 10 years, plus received a warrant for up to 400,000 Class A shares.
What key debt or credit facility changes did Hamilton Lane make in 2025?
On October 1, 2025, Hamilton Lane amended its 2022 Multi-Draw Term Loan Agreement, cutting available borrowings from $75,000,000 to $50,000,000 and setting interest at the greater of the prime rate minus 1.35% or 3.00%, while maintaining other existing debt facilities.
What significant asset sale did Hamilton Lane complete during the quarter?
On October 23, 2025, Hamilton Lane sold its interests in a wholly-owned consolidated fund to a managed fund for $92,278,000 in cash. The sale led to deconsolidation of that fund’s assets and liabilities, including $70,143,000 of cash, while Hamilton Lane remained the investment manager.
How large are Hamilton Lane’s customized separate accounts and specialized funds?
As of December 31, 2025, Hamilton Lane’s customized separate accounts represented $98.1 billion of assets under management. Specialized funds contributed an additional $48.0 billion of assets under management, supporting recurring management and advisory fee revenue streams.
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