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This article first appeared on GuruFocus.
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Total Revenue: $717 million, up 13% year-over-year.
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Adjusted Earnings Per Share (EPS): $1.94, up 18% year-over-year.
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Corporate Finance Revenue: $474 million, a 12% increase from the previous year.
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Financial Restructuring Revenue: $156 million, a 19% increase from the previous year.
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Financial and Valuation Advisory Revenue: $87 million, a 6% increase from the previous year.
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Adjusted Compensation Expenses: $441 million, compared to $390 million in the previous year.
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Adjusted Compensation Expense Ratio: 61.5%, consistent with the previous year.
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Adjusted Noncompensation Expense Ratio: 13.1%, consistent with the previous year.
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Adjusted Effective Tax Rate: 30.6%, down from 33.3% in the previous year.
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Cash and Investments: Approximately $1.2 billion at the end of the quarter.
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Share Repurchase: Approximately 418,000 shares repurchased during the quarter.
Release Date: January 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Houlihan Lokey Inc (NYSE:HLI) reported a 13% increase in revenues and an 18% increase in adjusted earnings per share compared to the same period last year.
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Corporate Finance revenues increased by 12% to $474 million, with a rise in both average fee and new business activity.
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Financial Restructuring revenues grew by 19% to $156 million, benefiting from accelerated transaction timelines.
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The company closed the acquisition of the real estate advisory business of Mellon Capital, enhancing its capital solutions capabilities.
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Houlihan Lokey Inc (NYSE:HLI) announced an agreement for a controlling interest in Oder Partners, significantly enhancing its footprint in France.
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Financial Restructuring is expected to face revenue pressures as it adjusts to an improving market environment.
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The typical seasonal pattern in restructuring results is expected to reverse, with weaker fourth quarter results anticipated.
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Adjusted compensation expenses increased to $441 million, up from $390 million in the same period last year.
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Noncompensation expenses increased by 11% year-to-date, with expectations of continued growth in the fiscal fourth quarter.
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The company faces geopolitical uncertainties that could impact restructuring activity levels and overall market conditions.
Q: Can you elaborate on the outlook for restructuring given the current market conditions and potential pressures from private credit markets? A: Scott Adelson, CEO, explained that while the market is improving for M&A with plentiful capital and likely declining interest rates, which structurally leads to declining restructuring activity, there are always pockets of opportunities due to geopolitical events or specific sectors. However, these are not yet showing consistent new opportunities.
Q: How does the outlook for Corporate Finance compare between the US and non-US regions, especially with recent acquisitions in Europe? A: Scott Adelson, CEO, noted that while the US remains the largest and most important market, their European business is growing well, offering a differentiated product. The recent acquisitions in Europe, particularly in France, are expected to enhance their presence and benefit the entire European operation.
Q: What is the current state of sponsor engagement and how is it impacting your business? A: Scott Adelson, CEO, mentioned that sponsor engagement has been improving quarter by quarter, with an accelerating rate of new opportunities. This improvement is broad-based across sectors, with previously underperforming sectors coming back stronger.
Q: Can you provide more details on your capital management strategy and the acquisition pipeline? A: J. Lindsey Alley, CFO, stated that their preference is to use excess cash for strategic acquisitions, followed by dividends and share repurchases. The acquisition pipeline is strong, with more deals planned, indicating a focus on maintaining flexibility for cash acquisitions.
Q: How are geopolitical uncertainties affecting Corporate Finance activity levels? A: Scott Adelson, CEO, noted that despite global noise, clients are more willing to look through uncertainties and continue business as usual. This resilience is contributing to a positive outlook for Corporate Finance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.