Houlihan Lokey reported financial results for its third fiscal quarter ended December 31, 2025.

Houlihan Lokey, Inc. (NYSE:HLI) ("Houlihan Lokey" or the "Company") today reported financial results for its third quarter ended December 31, 2025.

For the third quarter ended December 31, 2025, revenues were $717 million, compared with $634 million for the third quarter ended December 31, 2024. Net income was $117 million, or $1.70 per diluted share, for the third quarter ended December 31, 2025, compared with $95 million, or $1.39 per diluted share, for the third quarter ended December 31, 2024. Adjusted net income for the third quarter ended December 31, 2025 was $133 million, or $1.94 per diluted share, compared with $114 million, or $1.64 per diluted share, for the third quarter ended December 31, 2024.

"We are pleased with our results for the quarter and our performance year-to-date. We continue to benefit from improving investor sentiment and acceleration in the private equity markets. Most importantly, we continue to broaden and deepen our bench of exceptional talent around the world, most recently with our two transactions in Europe," stated Scott Adelson, Chief Executive Officer of Houlihan Lokey.

Revenues

For the third quarter ended December 31, 2025, revenues were $717 million, compared with $634 million for the third quarter ended December 31, 2024. For the third quarter ended December 31, 2025, Corporate Finance ("CF") revenues increased 12%, Financial Restructuring ("FR") revenues increased 19%, and Financial and Valuation Advisory ("FVA") revenues increased 6%, in each case, when compared with the third quarter ended December 31, 2024.

Expenses

The Company's compensation expenses, non-compensation expenses, and provision for income taxes during the periods presented and described below are on a GAAP and an adjusted basis.

Compensation expenses were $459 million for the third quarter ended December 31, 2025, compared with $403 million for the third quarter ended December 31, 2024. This resulted in a compensation ratio of 64.0% for the third quarter ended December 31, 2025, compared with 63.5% for the third quarter ended December 31, 2024. Adjusted compensation expenses were $441 million for the third quarter ended December 31, 2025, compared with $390 million for the third quarter ended December 31, 2024. This resulted in an adjusted compensation ratio of 61.5% for both the third quarter ended December 31, 2025 and the third quarter ended December 31, 2024. The increase in GAAP and adjusted compensation expenses was a result of an increase in revenues for the quarter when compared with the same quarter last year.

Non-compensation expenses were relatively flat at $98 million for the third quarter ended December 31, 2025, compared with $95 million for the third quarter ended December 31, 2024. Adjusted non-compensation expenses were $94 million for the third quarter ended December 31, 2025, compared with $83 million for the third quarter ended December 31, 2024. The increase in adjusted non-compensation expenses was primarily a result of increases in information technology and communications expense and professional fees.

The provision for income taxes was $53 million, representing an effective tax rate of 31.3% for the third quarter ended December 31, 2025, compared with $50 million, representing an effective tax rate of 34.3% for the third quarter ended December 31, 2024. The adjusted provision for income taxes was $58 million, representing an adjusted effective tax rate of 30.6% for the third quarter ended December 31, 2025, compared with $57 million, representing an adjusted effective tax rate of 33.3% for the third quarter ended December 31, 2024. The decrease in the Company's GAAP and adjusted effective tax rate was primarily a result of decreased state taxes and decreased non-deductible expenses.

Segment Reporting for the Third Fiscal Quarter

Corporate Finance

CF revenues were $474 million for the third quarter ended December 31, 2025, compared with $422 million for the third quarter ended December 31, 2024, representing an increase of 12%. Revenues increased due to an increase in the average transaction fee on closed transactions, which was driven by transaction mix and does not represent a short-term trend in the average fee on closed transactions. Revenues also increased due to an increase in the number of closed transactions during the quarter, which was driven by favorable market conditions.

Financial Restructuring

FR revenues were $156 million for the third quarter ended December 31, 2025, compared with $131 million for the third quarter ended December 31, 2024, representing an increase of 19%. Revenues 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 $87 million for the third quarter ended December 31, 2025, compared with $82 million for the third quarter ended December 31, 2024, representing an increase of 6%. Revenues increased due to an increase in the number of Fee Events, driven by improvements in the M&A markets.

Balance Sheet and Capital Allocation

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 March 15, 2026 to stockholders of record as of the close of business on March 2, 2026. Also in our third quarter, we repurchased approximately 418,000 shares as part of our share repurchase program. As of December 31, 2025, the Company had $1.18 billion of unrestricted cash and cash equivalents and investment securities.

Investor Conference Call and Webcast

The Company will host a conference call and live webcast at 5:00 p.m. Eastern Time on Wednesday, January 28, 2026, to discuss its third quarter fiscal 2026 results. 

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