Houlihan Lokey Reports Fiscal Year and Fourth Quarter 2025 Financial Results

Business Wire

07-05-2025

LOS ANGELES & NEW YORK--(BUSINESS WIRE)--Houlihan Lokey, Inc. (NYSE:HLI) ('Houlihan Lokey' or the 'Company') today reported financial results for its fiscal year and fourth quarter ended March 31, 2025. For the fiscal year, revenues were $2.39 billion, compared with $1.91 billion for the fiscal year ended March 31, 2024. For the fourth quarter ended March 31, 2025, revenues were $666 million, compared with $520 million for the fourth quarter ended March 31, 2024.
Net income was $400 million, or $5.82 per diluted share, for the fiscal year ended March 31, 2025, compared with $280 million, or $4.11 per diluted share, for the fiscal year ended March 31, 2024. Adjusted net income for the fiscal year ended March 31, 2025 was $434 million, or $6.29 per diluted share, compared with $310 million, or $4.49 per diluted share, for the fiscal year ended March 31, 2024.
Net income was $122 million, or $1.76 per diluted share, for the fourth quarter ended March 31, 2025, compared with $81 million, or $1.18 per diluted share, for the fourth quarter ended March 31, 2024. Adjusted net income for the fourth quarter ended March 31, 2025 was $136 million, or $1.96 per diluted share, compared with $88 million, or $1.27 per diluted share, for the fourth quarter ended March 31, 2024.
'Fiscal 2025 was a record year for our firm as all three groups ended the year with a strong fourth quarter. While current volatility makes meaningful forecasts difficult, we are well positioned to handle the uncertainty of current market conditions,' stated Scott Adelson, Chief Executive Officer of Houlihan Lokey.
Revenues
For the fiscal year ended March 31, 2025, revenues were $2.39 billion, compared with $1.91 billion for the fiscal year ended March 31, 2024. For the fiscal year ended March 31, 2025, CF revenues increased 38%, Financial Restructuring ('FR') revenues increased 4%, and Financial and Valuation Advisory ('FVA') revenues increased 11% when compared with the fiscal year ended March 31, 2024.
For the fourth quarter ended March 31, 2025, revenues were $666 million, compared with $520 million for the fourth quarter ended March 31, 2024. For the fourth quarter ended March 31, 2025, CF revenues increased 44%, FR revenues increased 6%, and FVA revenues increased 15% when compared with the fourth quarter ended March 31, 2024.
Expenses
The Company's employee compensation and benefits expenses, non-compensation expenses, and provision for income taxes during the periods presented and described below are on a GAAP and an adjusted basis.
*
Adjusted figures represent non-GAAP information. See 'Non-GAAP Financial Measures' and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.
(1)
Calculated using the average of the number of full-time employees at the beginning of the reporting period and the end of the reporting period.
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U.S. GAAP
Adjusted (Non-GAAP) *
Three Months Ended March 31,
($ in thousands)
2025
2024
2025
2024
Expenses:
Employee compensation and benefits
$
430,544
$
329,525
$
409,850
$
320,077
% of Revenues
64.6
%
63.3
%
61.5
%
61.5
%
Non-compensation
$
96,673
$
88,234
$
85,265
$
80,963
% of Revenues
14.5
%
17.0
%
12.8
%
15.6
%
Per full-time employee (1)
$
36
$
34
$
32
$
31
Provision for Income Taxes
$
28,335
$
36,962
$
44,199
$
37,438
% of Pre-Tax Income
18.9
%
31.3
%
24.5
%
29.9
%
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*
Adjusted figures represent non-GAAP information. See 'Non-GAAP Financial Measures' and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.
(1)
Calculated using the average of the number of full-time employees at the beginning of the reporting period and the end of the reporting period.
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Year Ended March 31, 2025 Compared to the Year Ended March 31, 2024
Employee compensation and benefits expenses were $1.52 billion for the fiscal year ended March 31, 2025, compared with $1.21 billion for the fiscal year ended March 31, 2024. This resulted in a GAAP compensation ratio of 63.8% for the fiscal year ended March 31, 2025, compared with 63.4% for the fiscal year ended March 31, 2024. Adjusted employee compensation and benefits expenses were $1.47 billion for the fiscal year ended March 31, 2025, compared with $1.18 billion for the fiscal year ended March 31, 2024. This resulted in an adjusted compensation ratio of 61.5% for both the fiscal year ended March 31, 2025 and March 31, 2024. The increase in GAAP and adjusted employee compensation and benefits expenses was primarily a result of an increase in revenues for the year when compared with the prior year.
Non-compensation expenses were $364 million for the fiscal year ended March 31, 2025, compared with $338 million for the fiscal year ended March 31, 2024. The increase in GAAP non-compensation expenses was primarily a result of an increase in depreciation and amortization, other operating expenses, and information technology and communications expenses, partially offset by a decrease in professional fees. Adjusted non-compensation expenses were $329 million for the fiscal year ended March 31, 2025, compared with $314 million for the fiscal year ended March 31, 2024. The increase in adjusted non-compensation expenses was primarily a result of an increase in other operating expenses, information technology and communication expenses, and depreciation and amortization, partially offset by a decrease in professional fees when compared with the prior year.
The provision for income taxes was $132 million, representing an effective tax rate of 24.8% for the fiscal year ended March 31, 2025, compared with $110 million, representing an effective tax rate of 28.2%, for the fiscal year ended March 31, 2024. The decrease in the Company's GAAP effective tax rate for the year ended March 31, 2025, relative to the same period in 2024, was primarily a result of the release of the provision for an uncertain tax position as a result of the successful closure of a city audit. The adjusted provision for income taxes was $185 million, representing an adjusted effective tax rate of 29.8%, for the fiscal year ended March 31, 2025, compared with $130 million, representing an adjusted effective tax rate of 29.5%, for the fiscal year ended March 31, 2024.
Quarter Ended March 31, 2025 Compared to the Quarter Ended March 31, 2024
Employee compensation and benefits expenses were $431 million for the fourth quarter ended March 31, 2025, compared with $330 million for the fourth quarter ended March 31, 2024. This resulted in a GAAP compensation ratio of 64.6% for the fourth quarter ended March 31, 2025, compared with 63.3% for the fourth quarter ended March 31, 2024. Adjusted employee compensation and benefits expenses were $410 million for the fourth quarter ended March 31, 2025, compared with $320 million for the fourth quarter ended March 31, 2024. This resulted in an adjusted compensation ratio of 61.5% for both the fourth quarter ended March 31, 2025 and March 31, 2024. The increase in GAAP and adjusted employee compensation and benefits expenses was primarily a result of an increase in revenues when compared with the same quarter last year.
Non-compensation expenses were $97 million for the fourth quarter ended March 31, 2025, compared with $88 million for the fourth quarter ended March 31, 2024. The increase in GAAP non-compensation expenses was primarily a result of an increase in depreciation and amortization, other operating expenses, and information technology and communications expenses, partially offset by a decrease in travel, meals, and entertainment expenses. Adjusted non-compensation expenses were $85 million for the quarter ended March 31, 2025, compared with $81 million for the fourth quarter ended March 31, 2024. The increase in adjusted non-compensation expenses was primarily a result of an increase in other operating expenses and information technology and communication expenses, partially offset by a decrease in travel, meals, and entertainment expenses when compared with the same quarter last year.
The provision for income taxes was $28 million, representing an effective tax rate of 18.9%, for the fourth quarter ended March 31, 2025, compared with $37 million, representing an effective tax rate of 31.3%, for the fourth quarter ended March 31, 2024. The decrease in the Company's GAAP effective tax rate for the fourth quarter ended March 31, 2025, relative to the same period in 2024, was primarily a result of decreased state taxes and the release of the provision for an uncertain tax position as a result of the successful closure of a city audit. The adjusted provision for income taxes was $44 million, representing an adjusted effective tax rate of 24.5%, for the fourth quarter ended March 31, 2025, compared with $37 million, representing an adjusted effective tax rate of 29.9%, for the fourth quarter ended March 31, 2024. The decrease in the Company's adjusted tax rate during the fourth quarter ended March 31, 2025, relative to the same period in 2024, was primarily a result of decreased state taxes.
Segment Reporting for the Fourth Quarter
Corporate Finance
CF revenues were $413 million for the fourth quarter ended March 31, 2025, compared with $288 million for the fourth quarter ended March 31, 2024. Revenues increased primarily due to an increase in the number of closed transactions, which was driven by favorable market conditions. Revenues also increased due to an increase in the average transaction fee on closed transactions, which was driven by transaction mix and does not represent a trend in the average fee on closed transactions.
Financial Restructuring
FR revenues were $165 million for the fourth quarter ended March 31, 2025, compared with $155 million for the fourth quarter ended March 31, 2024. Revenues increased primarily due to an increase in the number of closed transactions, which was driven by favorable market conditions for restructuring transactions. Revenues also increased due to an increase in the average transaction fee on closed transactions, which was driven by transaction mix and does not represent a trend in the average fee on closed transactions.
Financial and Valuation Advisory
FVA revenues were $89 million for the quarter ended March 31, 2025, compared with $77 million for the fourth quarter ended March 31, 2024. Revenues increased due to an increase in the number of Fee Events, driven by improvements in the M&A markets, which affected one or more of the service lines within our FVA business.
(1)
A Fee Event includes any engagement that involves revenue activity during the measurement period based on a revenue minimum of one thousand dollars. References in this press release to closed transactions should be understood to be the same as transactions that are 'effectively closed' as described in our periodic reports on Forms 10-K and 10-Q.
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Other Announcements
The Board of Directors of the Company declared a regular quarterly cash dividend of $0.60 per share of Class A and Class B common stock. The dividend will be payable on June 15, 2025 to stockholders of record as of the close of business on June 2, 2025.
Investor Conference Call and Webcast
The Company will host a conference call and live webcast at 5:00 p.m. Eastern Time on Wednesday, May 7, 2025, to discuss its full year and fourth quarter fiscal 2025 results. The number to call is 1-800-343-4136 (domestic) or 1-203-518-9843 (international). A live webcast will be available in the Investor Relations section of the Company's website. A replay of the conference call will be available from May 7, 2025 through May 14, 2025, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the passcode 11158904#. A replay of the webcast will be archived and available on the Company's website.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words 'assumes,' 'believes,' 'estimates,' 'expects,' 'guidance,' 'intends,' 'plans,' 'projects,' and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond the Company's control and could materially affect actual results, performance, or achievements. For a further description of such factors, you should read the Company's filings with the Securities and Exchange Commission. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. The Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
Non-GAAP Financial Measures
Adjusted net income, total and on a per share basis, and certain adjusted items used to determine adjusted net income, are presented and discussed in this earnings press release and are non-GAAP measures that management believes, when presented together with comparable GAAP measures, are useful to investors in understanding the Company's operating results. The adjusted items included in this earnings press release as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these adjusted amounts are not a measurement of financial performance or liquidity under GAAP and should not be considered as an alternative to the Company's financial information determined under GAAP. For a description of the Company's use of these adjusted items and a reconciliation with comparable GAAP items, see the section of this press release titled 'Reconciliation of GAAP to Adjusted Financial Information.' Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations, and cash flows.
About Houlihan Lokey
Houlihan Lokey, Inc. (NYSE:HLI) is a global investment bank with expertise in mergers and acquisitions, capital solutions, financial restructuring, and financial and valuation advisory. Houlihan Lokey serves corporations, institutions, and governments worldwide with offices in the Americas, Europe, the Middle East, and the Asia-Pacific region. Independent advice and intellectual rigor are hallmarks of the firm's commitment to client success across its advisory services. The firm is the No. 1 investment bank for all global M&A transactions for the past two years, the No. 1 M&A advisor for the past 10 years in the U.S., the No. 1 global restructuring advisor for the past 11 years, and the No. 1 global M&A fairness opinion advisor over the past 25 years, all based on number of transactions and according to data provided by LSEG.
For more information, please visit www.HL.com.
Appendix
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
(UNAUDITED)
(In thousands, except share data and par value)
March 31, 2024
Assets
Cash and cash equivalents
$
971,007
$
721,235
Restricted cash
4,572
619
Investment securities
195,624
38,005
Accounts receivable, net of allowance for credit losses
257,326
199,630
Unbilled work in process, net of allowance for credit losses
157,760
192,012
Income taxes receivable
—
32,856
Deferred income taxes
92,776
90,064
Property and equipment, net
149,350
136,701
Operating lease right-of-use assets
362,669
344,024
Goodwill
1,284,589
1,127,497
Other intangible assets, net
212,670
197,439
Other assets
131,365
90,677
Total assets
$
3,819,708
$
3,170,759
Liabilities and stockholders' equity
Liabilities:
Accrued salaries and bonuses
$
936,619
$
726,031
Accounts payable and accrued expenses
137,228
114,171
Deferred income
48,215
33,139
Income taxes payable
6,396
—
Deferred income taxes
8,784
7,505
Operating lease liabilities
438,185
415,412
Other liabilities
69,404
37,751
Total liabilities
1,644,831
1,334,009
Stockholders' equity:
Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 53,822,189 and 52,348,511 shares, respectively
54
52
Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 16,021,106 and 16,746,676 shares, respectively
16
17
Additional paid-in capital
843,350
739,870
Retained earnings
1,394,738
1,163,419
Accumulated other comprehensive loss
(63,281
)
(66,608
)
Total stockholders' equity
2,174,877
1,836,750
Total liabilities and stockholders' equity
$
3,819,708
$
3,170,759
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HOULIHAN LOKEY, INC. AND SUBSIDIARIES
Three Months Ended March 31,
Year Ended March 31,
(In thousands, except share and per share data)
2025
2024
2025
2024
Revenues
$
666,422
$
520,456
$
2,389,416
$
1,914,404
Operating expenses:
Employee compensation and benefits
409,850
320,077
1,469,491
1,177,355
Acquisition related compensation and benefits
20,694
9,448
54,777
36,234
Travel, meals, and entertainment
14,893
17,804
64,917
65,298
Rent
21,165
20,661
77,882
76,079
Depreciation and amortization
15,409
8,261
41,270
28,536
Information technology and communications
18,511
16,849
69,400
60,168
Professional fees
11,304
13,808
41,202
49,077
Other operating expenses
15,391
10,851
68,933
58,796
Total operating expenses
527,217
417,759
1,887,872
1,551,543
Operating income
139,205
102,697
501,544
362,861
Other income, net
(11,050
)
(15,342
)
(29,791
)
(27,678
)
Income before provision for income taxes
150,255
118,039
531,335
390,539
Provision for income taxes
28,335
36,962
131,624
110,238
Net income
$
121,920
$
81,077
$
399,711
$
280,301
Weighted average shares of common stock outstanding:
Fully diluted
69,183,454
68,492,023
68,658,347
68,159,390
Earnings per share attributable to Houlihan Lokey, Inc.
Basic
$
1.84
$
1.26
$
6.08
$
4.36
Fully diluted
$
1.76
$
1.18
$
5.82
$
4.11
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HOULIHAN LOKEY, INC. AND SUBSIDIARIES
Three Months Ended March 31,
Year Ended March 31,
(In thousands, except share and per share data)
2025
2024
2025
2024
Revenues
$
666,422
$
520,456
$
2,389,416
$
1,914,404
Employee compensation and benefits expenses
Employee compensation and benefits expenses (GAAP)
$
430,544
$
329,525
$
1,524,268
$
1,213,589
Less: Acquisition related compensation and benefits
(20,694
)
(9,448
)
(54,777
)
(36,234
)
Employee compensation and benefits expenses (adjusted)
409,850
320,077
1,469,491
1,177,355
Non-compensation expenses
Non-compensation expenses (GAAP)
$
96,673
$
88,234
$
363,604
$
337,954
Less: Acquisition related legal structure reorganization
(1,754
)
(3,514
)
(6,578
)
(6,117
)
Less: Integration and acquisition related costs
—
(1,278
)
(8,222
)
(7,002
)
Less: Acquisition amortization
(9,654
)
(2,479
)
(19,328
)
(10,754
)
Non-compensation expenses (adjusted)
85,265
80,963
329,476
314,081
Operating income
Operating income (GAAP)
$
139,205
$
102,697
$
501,544
$
362,861
Plus: Adjustments (1)
32,102
16,719
88,905
60,107
Operating income (adjusted)
171,307
119,416
590,449
422,968
Other income, net
Other income, net (GAAP)
$
(11,050
)
$
(15,342
)
$
(29,791
)
$
(27,678
)
Plus: Change in acquisition earnout liability fair value
1,851
9,557
1,023
10,373
Other income, net (adjusted)
(9,199
)
(5,785
)
(28,768
)
(17,305
)
Provision for income taxes
Provision for income taxes (GAAP)
$
28,335
$
36,962
$
131,624
$
110,238
Plus/(less): Impact of the excess tax benefit for stock vesting
(1,582
)
—
20,339
7,299
Plus: Release of the provision for an uncertain tax position as a result of the successful closure of a city audit
11,954
—
11,954
—
Less: Non-deductible acquisition related costs
(2,208
)
(1,676
)
(3,670
)
(2,355
)
Less: Reversal of deferred tax asset
—
—
(1,690
)
—
Adjusted provision for income taxes
36,499
35,286
158,557
115,182
Plus: Resulting tax impact (2)
7,700
2,152
26,225
14,668
Provision for income taxes (adjusted)
44,199
37,438
184,782
129,850
Net income
Net income (GAAP)
$
121,920
$
81,077
$
399,711
$
280,301
Plus: Adjustments (3)
14,387
6,686
34,724
30,122
Net income (adjusted)
$
136,307
$
87,763
$
434,435
$
310,423
Fully diluted shares outstanding
Fully diluted shares outstanding (GAAP)
69,183,454
68,492,023
68,658,347
68,159,390
Plus: Impact of unvested GCA retention and deferred share awards
282,498
755,020
406,479
1,034,118
Fully diluted shares outstanding (adjusted)
69,465,952
69,247,043
69,064,826
69,193,508
Diluted EPS attributable to Houlihan Lokey, Inc. (GAAP)
$
1.76
$
1.18
$
5.82
$
4.11
Diluted EPS attributable to Houlihan Lokey, Inc. (adjusted)
$
1.96
$
1.27
$
6.29
$
4.49
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(1)
The aggregate of adjustments from employee compensation and benefits and non-compensation expenses.
(2)
Reflects the tax impact of utilizing the adjusted effective tax rate on the non-tax adjustments identified above.
(3)
Consists of all adjustments identified above net of the associated tax impact.
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