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Business Wire
07-05-2025
- Business
- Business Wire
Houlihan Lokey Reports Fiscal Year and Fourth Quarter 2025 Financial Results
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 $520 million for the fourth quarter ended March 31, 2024. For the fourth quarter ended March 31, 2025, CF revenues increased 44%, FR revenues increased 6%, and FVA revenues increased 15% when compared with the fourth quarter ended March 31, 2024. Expenses The Company's employee compensation and benefits expenses, non-compensation expenses, and provision for income taxes during the periods presented and described below are on a GAAP and an adjusted basis. * Adjusted figures represent non-GAAP information. See 'Non-GAAP Financial Measures' and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers. (1) Calculated using the average of the number of full-time employees at the beginning of the reporting period and the end of the reporting period. Expand U.S. GAAP Adjusted (Non-GAAP) * Three Months Ended March 31, ($ 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 % Expand * 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. Expand 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. Expand 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 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 Expand 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 Expand 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 Expand (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. Expand
Yahoo
31-01-2025
- Business
- Yahoo
Houlihan Lokey Inc (HLI) Q3 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic ...
Revenue: $634 million, up 24% year-over-year. Adjusted Earnings Per Share (EPS): $1.64, up 34% year-over-year. Corporate Finance Revenue: $422 million, a 36% increase year-over-year. Financial Restructuring Revenue: $131 million, a 2% increase year-over-year. Financial and Valuation Advisory Revenue: $82 million, a 14% increase year-over-year. Adjusted Compensation Expenses: $390 million, up from $314 million year-over-year. Adjusted Compensation Expense Ratio: 61.5% for both fiscal 2025 and 2024. Adjusted Non-Compensation Expenses: $83 million, slightly up from $82 million year-over-year. Adjusted Non-Compensation Expense Ratio: 13.1%, down from 16.1% year-over-year. Adjusted Other Income and Expense: $9 million, up from $6 million year-over-year. Adjusted Effective Tax Rate: 33.3%, up from 30.3% year-over-year. Unrestricted Cash and Equivalents: Approximately $903 million at quarter end. Warning! GuruFocus has detected 8 Warning Signs with HLI. Release Date: January 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Houlihan Lokey Inc (NYSE:HLI) reported a 24% increase in revenues and a 34% increase in adjusted earnings per share compared to the same period last year. Corporate finance revenues grew by 36% year-over-year, with improvements in key metrics such as close rates and transaction volume. The company successfully closed its acquisition of Waller Helms, contributing positively to the quarter's results. Houlihan Lokey Inc (NYSE:HLI) added 17 new Managing Directors, enhancing its leadership team and capabilities. The company maintains a positive outlook for fiscal 2026, driven by improving M&A market sentiment and increased private equity activity. The average transaction fee in corporate finance decreased due to transaction mix, despite an increase in the number of transactions. Financial restructuring revenues only increased by 2% compared to the same period last year, indicating slower growth in this segment. Adjusted compensation expenses rose significantly to $390 million, up from $314 million in the same quarter last year. The adjusted effective tax rate increased to 33.3% from 30.3% in the same quarter last year, primarily due to timing issues. Despite improvements, transaction velocity has not yet returned to pre-pandemic levels, indicating a gradual recovery. Q: Can you provide historical context for the strengthening corporate finance environment and potential revenue growth? A: Scott Adelson, CEO: The corporate finance environment is improving as anticipated, with strong restructuring remaining elevated. Growth has been consistent, with revenues increasing by about 24% each quarter compared to the previous year. This trend is expected to continue without significant acceleration. Q: How should we think about the seasonality in corporate finance, especially in the March quarter? A: J. Lindsey Alley, CFO: Historically, our fiscal year shows a 46% revenue in the first half and 54% in the second half. We expect similar seasonality this year, although macroeconomic pressures could influence this. Q: What is the outlook for restructuring given the current interest rate environment? A: Scott Adelson, CEO: Restructuring is performing better than expected due to elevated interest rates. While exact numbers are hard to predict, the environment remains favorable for continued restructuring activity. Q: How does the improving M&A environment affect your hiring and acquisition strategy? A: Scott Adelson, CEO: We continue to find opportunities to acquire talent and companies, regardless of market conditions. The improving environment supports our strategy to grow through acquisitions and hiring. Q: How does the current administration's policies impact M&A activity, particularly in the mid-market? A: Scott Adelson, CEO: A more receptive M&A environment is beneficial overall. While we are less impacted by regulatory changes than large-cap transactions, the general increase in M&A activity is positive for our business. Q: Is Houlihan Lokey planning to be more active in acquisitions given the favorable market conditions? A: Scott Adelson, CEO: We are continuously in dialogue with potential acquisition targets. While market conditions are favorable, the timing of deals depends more on individual circumstances than market factors. Q: Are you seeing different levels of client engagement across regions? A: Scott Adelson, CEO: Engagement is increasing across all regions, with both private equity and strategic clients showing more activity. While some regions may pick up faster, the overall trend is positive globally. Q: How is the increase in deal size and fees impacting corporate finance growth? A: Scott Adelson, CEO: We focus on the mid-cap space, and deal sizes and fees have been steadily increasing. This trend is expected to continue, contributing to corporate finance growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Associated Press
28-01-2025
- Business
- Associated Press
Houlihan Lokey Reports Third Quarter Fiscal 2025 Financial Results
LOS ANGELES & NEW YORK--(BUSINESS WIRE)--Jan 28, 2025-- Houlihan Lokey, Inc. (NYSE:HLI) ('Houlihan Lokey' or the 'Company') today reported financial results for its third quarter ended December 31, 2024. For the third quarter ended December 31, 2024, revenues were $634 million, compared with $511 million for the third quarter ended December 31, 2023. Net income was $95 million, or $1.39 per diluted share, for the third quarter ended December 31, 2024, compared with $71 million, or $1.04 per diluted share, for the third quarter ended December 31, 2023. Adjusted net income for the third quarter ended December 31, 2024 was $114 million, or $1.64 per diluted share, compared with $84 million, or $1.22 per diluted share, for the third quarter ended December 31, 2023. 'We are pleased with our results for the third quarter as well as our performance year to date, as we continue to see momentum across our business lines. Given the stronger macro environment, we remain optimistic about the balance of this fiscal year, and our outlook for fiscal 2026 is positive,' stated Scott Adelson, Chief Executive Officer of Houlihan Lokey. (In thousands, except per share data) U.S. GAAP Three Months Ended December 31, Nine Months Ended December 31, 2024 2023 2024 2023 Revenues by segment Corporate Finance $ 421,602 $ 310,512 $ 1,114,047 $ 819,247 Financial Restructuring 130,942 128,565 379,932 366,603 Financial and Valuation Advisory 81,884 72,053 229,015 208,098 Revenues $ 634,428 $ 511,130 $ 1,722,994 $ 1,393,948 Operating expenses: Employee compensation and benefits $ 402,971 $ 324,039 $ 1,093,724 $ 884,064 Non-compensation 95,355 90,551 266,931 249,720 Operating income 136,102 96,540 362,339 260,164 Other income, net (9,016 ) (6,035 ) (18,741 ) (12,336 ) Income before provision for income taxes 145,118 102,575 381,080 272,500 Provision for income taxes 49,816 31,772 103,289 73,276 Net income attributable to Houlihan Lokey, Inc. $ 95,302 $ 70,803 $ 277,791 $ 199,224 Diluted earnings per share attributable to Houlihan Lokey, Inc. $ 1.39 $ 1.04 $ 4.05 $ 2.93 Revenues For the third quarter ended December 31, 2024, revenues were $634 million, compared with $511 million for the third quarter ended December 31, 2023. For the third quarter ended December 31, 2024, Corporate Finance ('CF') revenues increased 36%, Financial Restructuring ('FR') revenues increased 2%, and Financial and Valuation Advisory ('FVA') revenues increased 14%, in each case, when compared with the third quarter ended December 31, 2023. Expenses The Company's employee compensation and benefits expenses, non-compensation expenses, and provision for income taxes during the periods presented and described below are on a GAAP and an adjusted basis. U.S. GAAP Adjusted (Non-GAAP) * Three Months Ended December 31, ($ in thousands) 2024 2023 2024 2023 Expenses: Employee compensation and benefits $ 402,971 $ 324,039 $ 390,173 $ 314,345 % of Revenues 63.5 % 63.4 % 61.5 % 61.5 % Non-compensation $ 95,355 $ 90,551 $ 83,002 $ 82,129 % of Revenues 15.0 % 17.7 % 13.1 % 16.1 % Per full-time employee (1) $ 35 $ 34 $ 31 $ 31 Provision for income taxes $ 49,816 $ 31,772 $ 56,734 $ 36,584 % of Pre-tax income 34.3 % 31.0 % 33.3 % 30.3 % * 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. U.S. GAAP Adjusted (Non-GAAP) * Nine Months Ended December 31, ($ in thousands) 2024 2023 2024 2023 Expenses: Employee compensation and benefits $ 1,093,724 $ 884,064 $ 1,059,641 $ 857,278 % of Revenues 63.5 % 63.4 % 61.5 % 61.5 % Non-compensation $ 266,931 $ 249,720 $ 244,211 $ 233,118 % of Revenues 15.5 % 17.9 % 14.2 % 16.7 % Per full-time employee (1) $ 101 $ 95 $ 92 $ 88 Provision for income taxes $ 103,289 $ 73,276 $ 140,583 $ 92,412 % of Pre-tax income 27.1 % 26.9 % 32.0 % 29.3 % * 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. Employee compensation and benefits expenses were $403 million for the third quarter ended December 31, 2024, compared with $324 million for the third quarter ended December 31, 2023. Adjusted employee compensation and benefits expenses were $390 million for the third quarter ended December 31, 2024, compared with $314 million for the third quarter ended December 31, 2023. This resulted in an adjusted compensation ratio of 61.5% for both the third quarter ended December 31, 2024 and the third quarter ended December 31, 2023. The increase in GAAP and adjusted employee compensation and benefits expenses was a result of an increase in revenues for the quarter when compared with the same quarter last year. Non-compensation expenses were $95 million for the third quarter ended December 31, 2024, compared with $91 million for the third quarter ended December 31, 2023. The increase in GAAP non-compensation expenses was primarily a result of an increase in rent expense and depreciation and amortization expense, partially offset by a decrease in professional fees. Adjusted non-compensation expenses were relatively flat at $83 million for the third quarter ended December 31, 2024, compared with $82 million for the third quarter ended December 31, 2023. The provision for income taxes was $50 million, representing an effective tax rate of 34.3% for the third quarter ended December 31, 2024, compared with $32 million, representing an effective tax rate of 31.0% for the third quarter ended December 31, 2023. The adjusted provision for income taxes was $57 million, representing an adjusted effective tax rate of 33.3% for the third quarter ended December 31, 2024, compared with $37 million, representing an adjusted effective tax rate of 30.3% for the third quarter ended December 31, 2023. The increase in the Company's GAAP and adjusted effective tax rates during the third quarter ended December 31, 2024, relative to the third quarter ended December 31, 2023, was primarily a result of increased state taxes and non-deductible expenses. Corporate Finance CF revenues were $422 million for the third quarter ended December 31, 2024, compared with $311 million for the third quarter ended December 31, 2023, representing an increase of 36%. Revenues increased due to an increase in the number of closed transactions during the quarter, which was driven by favorable market conditions for M&A and capital markets transactions. This increase was partially offset by a decrease in the average transaction fee on closed transactions, which was driven by transaction mix, and does not represent a trend in the average fee on closed transactions. Three Months Ended December 31, Nine Months Ended December 31, ($ in thousands) 2024 2023 2024 2023 Corporate Finance Revenues $ 421,602 $ 310,512 $ 1,114,047 $ 819,247 # of Managing Directors 238 219 238 219 # of Closed transactions (1) 170 117 417 329 Financial Restructuring FR revenues were $131 million for the third quarter ended December 31, 2024, compared with $129 million for the third quarter ended December 31, 2023, representing an increase of 2%. Revenues increased due to an increase in the number of closed transactions during the quarter, which was driven by favorable market conditions for restructuring transactions. This increase was partially offset by a decrease in the average transaction fee on closed transactions, which was driven by transaction mix and does not represent a trend in the average fee on closed transactions. Three Months Ended December 31, Nine Months Ended December 31, ($ in thousands) 2024 2023 2024 2023 Financial Restructuring Revenues $ 130,942 $ 128,565 $ 379,932 $ 366,603 # of Managing Directors 57 52 57 52 # of Closed transactions (1) 41 30 107 91 Financial and Valuation Advisory FVA revenues were $82 million for the third quarter ended December 31, 2024, compared with $72 million for the third quarter ended December 31, 2023, representing an increase of 14%. Revenues increased due to an increase in the number of Fee Events and an increase in the average fee per Fee Event, driven by improvements in the M&A markets, which impacted one or more of the service lines within our FVA business. Three Months Ended December 31, Nine Months Ended December 31, ($ in thousands) 2024 2023 2024 2023 Financial and Valuation Advisory Revenues $ 81,884 $ 72,053 $ 229,015 $ 208,098 # of Managing Directors 42 41 42 41 # of Fee Events (1) 1,005 926 1,804 1,704 (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. Balance Sheet and Capital Allocation The Board of Directors of the Company declared a regular quarterly cash dividend of $0.57 per share of Class A and Class B common stock. The dividend will be payable on March 15, 2025 to stockholders of record as of the close of business on March 3, 2025. As of December 31, 2024, the Company had $903 million of cash and cash equivalents and investment securities, and $66 million of other liabilities. Investor Conference Call and Webcast The Company will host a conference call and live webcast at 5:00 p.m. Eastern Time on Tuesday, January 28, 2025, to discuss its third quarter fiscal 2025 results. The number to call is 1-844-825-9789 (domestic) or 1-412-317-5180 (international). A live webcast will be available in the Investor Relations section of the Company's website. A replay of the conference call will be available from January 28, 2025 through February 4, 2025, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the passcode 10195795. 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 markets, 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, the No. 1 M&A advisor for the past nine consecutive years in the U.S., the No. 1 global restructuring advisor for the past ten consecutive 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. Appendix HOULIHAN LOKEY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) ( In thousands, except share data and par value) December 31, 2024 March 31, 2024 Assets Cash and cash equivalents $ 799,340 $ 721,235 Restricted cash 1,452 619 Investment securities 103,538 38,005 Accounts receivable, net of allowance for credit losses 166,687 199,630 Unbilled work in process, net of allowance for credit losses 202,716 192,012 Income taxes receivable — 32,856 Deferred income taxes 83,428 90,064 Property and equipment, net 140,105 136,701 Operating lease right-of-use assets 355,937 344,024 Goodwill 1,280,304 1,127,497 Other intangible assets, net 222,113 197,439 Other assets 120,142 90,677 Total assets $ 3,475,762 $ 3,170,759 Liabilities and stockholders' equity Liabilities: Accrued salaries and bonuses $ 719,301 $ 726,031 Accounts payable and accrued expenses 123,129 114,171 Deferred income 40,500 33,139 Income taxes payable 5,501 — Deferred income taxes 7,711 7,505 Operating lease liabilities 433,032 415,412 Other liabilities 66,047 37,751 Total liabilities 1,395,221 1,334,009 Stockholders' equity: Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 54,015,734 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 16,129,101 and 16,746,676 shares, respectively 16 17 Additional paid-in capital 851,854 739,870 Retained earnings 1,314,974 1,163,419 Accumulated other comprehensive loss (86,357 ) (66,608 ) Total stockholders' equity 2,080,541 1,836,750 Total liabilities and stockholders' equity $ 3,475,762 $ 3,170,759 HOULIHAN LOKEY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Three Months Ended December 31, Nine Months Ended December 31, (In thousands, except share and per share data) 2024 2023 2024 2023 Revenues $ 634,428 $ 511,130 $ 1,722,994 $ 1,393,948 Operating expenses: Employee compensation and benefits 390,173 314,345 1,059,641 857,278 Acquisition related compensation and benefits 12,798 9,694 34,083 26,786 Travel, meals, and entertainment 17,942 17,325 50,024 47,494 Rent 22,259 19,002 56,717 55,418 Depreciation and amortization 9,561 6,657 25,861 20,275 Information technology and communications 16,945 15,443 50,889 43,319 Professional fees 11,744 14,853 29,898 35,269 Other operating expenses 16,904 17,271 53,542 47,945 Total operating expenses 498,326 414,590 1,360,655 1,133,784 Operating income 136,102 96,540 362,339 260,164 Other income, net (9,016 ) (6,035 ) (18,741 ) (12,336 ) Income before provision for income taxes 145,118 102,575 381,080 272,500 Provision for income taxes 49,816 31,772 103,289 73,276 Net income $ 95,302 $ 70,803 $ 277,791 $ 199,224 Weighted average shares of common stock outstanding: Basic 65,831,122 64,411,668 65,563,605 64,258,216 Fully diluted 68,760,959 67,886,301 68,558,325 67,896,302 Earnings per share attributable to Houlihan Lokey, Inc. Basic $ 1.45 $ 1.10 $ 4.24 $ 3.10 Fully diluted $ 1.39 $ 1.04 $ 4.05 $ 2.93 HOULIHAN LOKEY, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO ADJUSTED FINANCIAL INFORMATION (UNAUDITED) Three Months Ended December 31, Nine Months Ended December 31, (In thousands, except share and per share data) 2024 2023 2024 2023 Revenues $ 634,428 $ 511,130 $ 1,722,994 $ 1,393,948 Employee compensation and benefits expenses Employee compensation and benefits expenses (GAAP) $ 402,971 $ 324,039 $ 1,093,724 $ 884,064 Less: Acquisition related compensation and benefits (12,798 ) (9,694 ) (34,083 ) (26,786 ) Employee compensation and benefits expenses (adjusted) 390,173 314,345 1,059,641 857,278 Non-compensation expenses Non-compensation expenses (GAAP) $ 95,355 $ 90,551 $ 266,931 $ 249,720 Less: Acquisition related legal structure reorganization (3,619 ) (2,603 ) (4,824 ) (2,603 ) Less: Integration and acquisition related costs (4,668 ) (4,259 ) (8,222 ) (5,724 ) Less: Acquisition amortization (4,066 ) (1,560 ) (9,674 ) (8,275 ) Non-compensation expenses (adjusted) 83,002 82,129 244,211 233,118 Operating income Operating income (GAAP) $ 136,102 $ 96,540 $ 362,339 $ 260,164 Plus: Adjustments (1) 25,151 18,116 56,803 43,388 Operating income (adjusted) 161,253 114,656 419,142 303,552 Other income, net Other income, net (GAAP) $ (9,016 ) $ (6,035 ) $ (18,741 ) $ (12,336 ) Plus/(less): Change in acquisition earnout liability fair value — — (828 ) 816 Other income, net (adjusted) (9,016 ) (6,035 ) (19,569 ) (11,520 ) Provision for income taxes Provision for income taxes (GAAP) $ 49,816 $ 31,772 $ 103,289 $ 73,276 Plus: Impact of the excess tax benefit for stock vesting — — 21,921 7,299 Less: Reversal of deferred tax asset — — (1,690 ) — Less: Non-deductible acquisition related costs (1,462 ) (679 ) (1,462 ) (679 ) Adjusted provision for income taxes 48,354 31,093 122,058 79,896 Plus: Resulting tax impact (2) 8,380 5,491 18,525 12,516 Provision for income taxes (adjusted) 56,734 36,584 140,583 92,412 Net income Net income (GAAP) $ 95,302 $ 70,803 $ 277,791 $ 199,224 Plus/(less): Adjustments (3) 18,233 13,304 20,337 23,436 Net income (adjusted) $ 113,535 $ 84,107 298,128 222,660 Fully diluted shares outstanding Fully diluted shares outstanding (GAAP) 68,760,959 67,886,301 68,558,325 67,896,302 Plus: Impact of unvested GCA retention and deferred share awards 334,677 968,515 454,494 1,148,657 Fully diluted shares outstanding (adjusted) 69,095,636 68,854,816 69,012,819 69,044,959 Diluted EPS attributable to Houlihan Lokey, Inc. (GAAP) $ 1.39 $ 1.04 $ 4.05 $ 2.93 Diluted EPS attributable to Houlihan Lokey, Inc. (adjusted) $ 1.64 $ 1.22 $ 4.32 $ 3.22 (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. View source version on CONTACT: Investor Relations 212.331.8225 [email protected] OR Media Relations 212.331.8223 [email protected] KEYWORD: CALIFORNIA NEW YORK UNITED STATES NORTH AMERICA INDUSTRY KEYWORD: BANKING PROFESSIONAL SERVICES FINANCE SOURCE: Houlihan Lokey, Inc. Copyright Business Wire 2025.
