EX-99.1 2 q3fy25-ex991.htm EX-99.1 Document
hllogoa.jpg
Houlihan Lokey Reports Third Quarter Fiscal 2025 Financial Results

– Third Quarter Fiscal 2025 Revenues of $634 million –
– Third Quarter Fiscal 2025 Diluted EPS of $1.39 –
– Adjusted Third Quarter Fiscal 2025 Diluted EPS of $1.64 –
– Announces Dividend of $0.57 per Share for Fourth Quarter Fiscal 2025 –

LOS ANGELES and NEW YORK - January 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.
Selected Financial Data
(In thousands, except per share data)
U.S. GAAP
Three Months Ended December 31,Nine Months Ended December 31,
2024202320242023
Revenues by segment
Corporate Finance$421,602 $310,512 $1,114,047 $819,247 
Financial Restructuring130,942 128,565 379,932 366,603 
Financial and Valuation Advisory81,884 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-compensation95,355 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 taxes49,816 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.

1
hllogoa.jpg
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. GAAPAdjusted (Non-GAAP) *
Three Months Ended December 31,
($ in thousands)2024202320242023
Expenses:
Employee compensation and benefits$402,971 $324,039 $390,173 $314,345 
% of Revenues63.5 %63.4 %61.5 %61.5 %
Non-compensation$95,355 $90,551 $83,002 $82,129 
% of Revenues15.0 %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 $36,584 
% of Pre-tax income34.3 %31.0 %33.3 %30.3 %
*Adjusted figures represent non-GAAP information. See “Non-GAAP Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.
(1)Calculated using the average of the number of full-time employees at the beginning of the reporting period and the end of the reporting period.
U.S. GAAPAdjusted (Non-GAAP) *
Nine Months Ended December 31,
($ in thousands)2024202320242023
Expenses:
Employee compensation and benefits$1,093,724 $884,064 $1,059,641 $857,278 
% of Revenues63.5 %63.4 %61.5 %61.5 %
Non-compensation$266,931 $249,720 $244,211 $233,118 
% of Revenues15.5 %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 income27.1 %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.

2
hllogoa.jpg
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.


3
hllogoa.jpg
Segment Reporting for the Third Fiscal Quarter

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)2024202320242023
Corporate Finance
Revenues$421,602 $310,512 $1,114,047 $819,247 
# of Managing Directors238 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)2024202320242023
Financial Restructuring
Revenues$130,942 $128,565 $379,932 $366,603 
# of Managing Directors57 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)2024202320242023
Financial and Valuation Advisory
Revenues$81,884 $72,053 $229,015 $208,098 
# of Managing Directors42 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.
4
hllogoa.jpg
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.

For more information, please visit www.HL.com.

5
hllogoa.jpg
Contact Information
Investor Relations
212.331.8225
IR@HL.com		ORMedia Relations
212.331.8223
PR@HL.com

Appendix
Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Statements of Income (Unaudited)
Reconciliation of GAAP to Adjusted Financial Information (Unaudited)

6
hllogoa.jpg
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share data and par value)December 31, 2024March 31, 2024
Assets
Cash and cash equivalents$799,340 $721,235 
Restricted cash1,452 619 
Investment securities103,538 38,005 
Accounts receivable, net of allowance for credit losses166,687 199,630 
Unbilled work in process, net of allowance for credit losses202,716 192,012 
Income taxes receivable— 32,856 
Deferred income taxes83,428 90,064 
Property and equipment, net140,105 136,701 
Operating lease right-of-use assets355,937 344,024 
Goodwill1,280,304 1,127,497 
Other intangible assets, net222,113 197,439 
Other assets120,142 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 expenses123,129 114,171 
Deferred income40,500 33,139 
Income taxes payable5,501 — 
Deferred income taxes7,711 7,505 
Operating lease liabilities433,032 415,412 
Other liabilities66,047 37,751 
Total liabilities1,395,221 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, respectively54 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, respectively16 17 
Additional paid-in capital851,854 739,870 
Retained earnings1,314,974 1,163,419 
Accumulated other comprehensive loss(86,357)(66,608)
Total stockholders’ equity2,080,541 1,836,750 
Total liabilities and stockholders’ equity$3,475,762 $3,170,759 
7
hllogoa.jpg
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)2024202320242023
Revenues$634,428 $511,130 $1,722,994 $1,393,948 
Operating expenses:
Employee compensation and benefits390,173 314,345 1,059,641 857,278 
Acquisition related compensation and benefits12,798 9,694 34,083 26,786 
Travel, meals, and entertainment17,942 17,325 50,024 47,494 
Rent22,259 19,002 56,717 55,418 
Depreciation and amortization9,561 6,657 25,861 20,275 
Information technology and communications16,945 15,443 50,889 43,319 
Professional fees11,744 14,853 29,898 35,269 
Other operating expenses16,904 17,271 53,542 47,945 
Total operating expenses498,326 414,590 1,360,655 1,133,784 
Operating income136,102 96,540 362,339 260,164 
Other income, net(9,016)(6,035)(18,741)(12,336)
Income before provision for income taxes145,118 102,575 381,080 272,500 
Provision for income taxes49,816 31,772 103,289 73,276 
Net income$95,302 $70,803 $277,791 $199,224 
Weighted average shares of common stock outstanding:
Basic65,831,122 64,411,668 65,563,605 64,258,216 
Fully diluted68,760,959 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 

8
hllogoa.jpg
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)2024202320242023
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 taxes48,354 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 awards334,677 968,515 454,494 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.
9