EX-99.1 2 q2fy25-ex991.htm EX-99.1 Document
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Houlihan Lokey Reports Second Quarter Fiscal 2025 Financial Results

– Second Quarter Fiscal 2025 Revenues of $575 million –
– Second Quarter Fiscal 2025 Diluted EPS of $1.37 –
– Adjusted Second Quarter Fiscal 2025 Diluted EPS of $1.46 –
– Announces Dividend of $0.57 per Share for Third Quarter Fiscal 2025 –

LOS ANGELES and NEW YORK - October 30, 2024 - Houlihan Lokey, Inc. (NYSE:HLI) (“Houlihan Lokey” or the “Company”) today reported financial results for its second quarter ended September 30, 2024.
For the second quarter ended September 30, 2024, revenues were $575 million, compared with $467 million for the second quarter ended September 30, 2023. Net income was $94 million, or $1.37 per diluted share, for the second quarter ended September 30, 2024, compared with $67 million, or $0.99 per diluted share, for the second quarter ended September 30, 2023. Adjusted net income for the second quarter ended September 30, 2024 was $100 million, or $1.46 per diluted share, compared with $77 million, or $1.11 per diluted share, for the second quarter ended September 30, 2023.
“We are pleased with our second-quarter results, and we enter the second half of the year with momentum across all three of our business lines. While we recognize uncertainties in the macro environment, our outlook for the second half of fiscal 2025 is positive, as we continue to see the benefits of our highly diversified business model,” stated Scott Adelson, Chief Executive Officer of Houlihan Lokey.
Selected Financial Data
(In thousands, except per share data)
U.S. GAAP
Three Months Ended September 30,Six Months Ended September 30,
2024202320242023
Revenues by segment
Corporate Finance$364,028 $281,684 $692,445 $508,735 
Financial Restructuring131,568 114,670 248,990 238,038 
Financial and Valuation Advisory79,361 70,635 147,131 136,045 
Revenues
$574,957 $466,989 $1,088,566 $882,818 
Operating expenses:
Employee compensation and benefits$360,637 $296,542 $690,753 $560,025 
Non-compensation83,651 80,170 171,576 159,169 
Operating income
130,669 90,277 226,237 163,624 
Other income, net(5,419)(3,296)(9,725)(6,301)
Income before provision for income taxes
136,088 93,573 235,962 169,925 
Provision for income taxes42,539 26,542 53,473 41,504 
Net income attributable to Houlihan Lokey, Inc.$93,549 $67,031 $182,489 $128,421 
Diluted earnings per share attributable to Houlihan Lokey, Inc.
$1.37 $0.99 $2.67 $1.89 

Revenues

For the second quarter ended September 30, 2024, revenues were $575 million, compared with $467 million for the second quarter ended September 30, 2023. For the second quarter ended September 30, 2024, Corporate Finance (“CF”) revenues increased 29%, Financial Restructuring (“FR”) revenues increased 15%, and Financial and Valuation Advisory (“FVA”) revenues increased 12%, in each case, when compared with the second quarter ended September 30, 2023.

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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 September 30,
($ in thousands)2024202320242023
Expenses:
Employee compensation and benefits$360,637 $296,542 $353,599 $287,200 
% of Revenues62.7 %63.5 %61.5 %61.5 %
Non-compensation$83,651 $80,170 $80,879 $75,345 
% of Revenues14.5 %17.2 %14.1 %16.1 %
Per full-time employee (1)
$32 $30 $31 $29 
Provision for income taxes$42,539 $26,542 $45,610 $30,329 
% of Pre-tax income31.3 %28.4 %31.3 %28.4 %
*Adjusted figures represent non-GAAP information. See “Non-GAAP Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.
(1)Calculated using the average of the number of full-time employees at the beginning of the reporting period and the end of the reporting period.
U.S. GAAPAdjusted (Non-GAAP) *
Six Months Ended September 30,
($ in thousands)2024202320242023
Expenses:
Employee compensation and benefits$690,753 $560,025 $669,468 $542,933 
% of Revenues63.5 %63.4 %61.5 %61.5 %
Non-compensation$171,576 $159,169 $161,209 $150,989 
% of Revenues15.8 %18.0 %14.8 %17.1 %
Per full-time employee (1)
$65 $60 $61 $57 
Provision for income taxes$53,473 $41,504 $83,849 $55,828 
% of Pre-tax income22.7 %24.4 %31.2 %28.7 %
*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 $361 million for the second quarter ended September 30, 2024, compared with $297 million for the second quarter ended September 30, 2023. Adjusted employee compensation and benefits expenses were $354 million for the second quarter ended September 30, 2024, compared with $287 million for the second quarter ended September 30, 2023. This resulted in an adjusted compensation ratio of 61.5% for both the second quarter ended September 30, 2024 and the second quarter ended September 30, 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 $84 million for the second quarter ended September 30, 2024, compared with $80 million for the second quarter ended September 30, 2023. Adjusted non-compensation expenses were $81 million for the second quarter ended September 30, 2024, compared with $75 million for the second quarter ended September 30, 2023. The increase in GAAP and adjusted non-compensation expenses was primarily a result of an increase in other operating expenses and information technology and communication expenses for the quarter when compared with the same quarter last year.

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The provision for income taxes was $43 million, representing an effective tax rate of 31.3% for the second quarter ended September 30, 2024, compared with $27 million, representing an effective tax rate of 28.4% for the second quarter ended September 30, 2023. The increase in the Company’s GAAP tax rate was primarily a result of increased state taxes and increased taxes due to foreign operations. The adjusted provision for income taxes was $46 million, representing an adjusted effective tax rate of 31.3% for the second quarter ended September 30, 2024, compared with $30 million, representing an adjusted effective tax rate of 28.4% for the second quarter ended September 30, 2023.

Segment Reporting for the Second Fiscal Quarter

Corporate Finance
CF revenues were $364 million for the second quarter ended September 30, 2024, compared with $282 million for the second quarter ended September 30, 2023, representing an increase of 29%. Revenues increased primarily due to an increase in the average transaction fee on closed transactions, which was driven by transaction mix, and does not represent a trend in the average transaction fee on closed transactions.
Three Months Ended September 30,Six Months Ended September 30,
($ in thousands)2024202320242023
Corporate Finance
Revenues$364,028 $281,684 $692,445 $508,735 
# of Managing Directors224 211 224 211 
# of Closed transactions (1)
131 117 247 212 

Financial Restructuring
FR revenues increased 15% to $132 million for the second quarter ended September 30, 2024, compared with $115 million for the second quarter ended September 30, 2023. Revenues increased primarily due to an increase in the average transaction fee on closed transactions, which was driven by transaction mix, and does not represent a trend in the average transaction fee on closed transactions.
Three Months Ended September 30,Six Months Ended September 30,
($ in thousands)2024202320242023
Financial Restructuring
Revenues$131,568 $114,670 $248,990 $238,038 
# of Managing Directors58 60 58 60 
# of Closed transactions (1)
33 31 66 61 

Financial and Valuation Advisory
FVA revenues increased 12% to $79 million for the second quarter ended September 30, 2024, compared with $71 million for the second quarter ended September 30, 2023. Revenues increased due to an increase in the number of Fee Events and an increase in the average fee per Fee Event, driven by improvements in the M&A markets, which impacted one or more of the service lines within our FVA business.
Three Months Ended September 30,Six Months Ended September 30,
($ in thousands)2024202320242023
Financial and Valuation Advisory
Revenues$79,361 $70,635 $147,131 $136,045 
# of Managing Directors41 40 41 40 
# of Fee Events (1)
903 852 1,316 1,255 
(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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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 December 15, 2024 to stockholders of record as of the close of business on December 2, 2024. As of September 30, 2024, the Company had $748 million of cash and cash equivalents and investment securities, and $33 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 Wednesday, October 30, 2024, to discuss its second 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 October 30, 2024 through November 6, 2024, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the passcode 10193284. 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.

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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)

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share data and par value)September 30, 2024March 31, 2024
Assets
Cash and cash equivalents$691,410 $721,235 
Restricted cash1,452 619 
Investment securities56,829 38,005 
Accounts receivable, net of allowance for credit losses219,133 199,630 
Unbilled work in process, net of allowance for credit losses138,293 192,012 
Income taxes receivable21,832 32,856 
Deferred income taxes87,020 90,064 
Property and equipment, net148,729 136,701 
Operating lease right-of-use assets359,739 344,024 
Goodwill1,177,757 1,127,497 
Other intangible assets, net196,641 197,439 
Other assets113,916 90,677 
Total assets$3,212,751 $3,170,759 
Liabilities and stockholders' equity
Liabilities:
Accrued salaries and bonuses$641,370 $726,031 
Accounts payable and accrued expenses104,661 114,171 
Deferred income37,956 33,139 
Deferred income taxes7,575 7,505 
Operating lease liabilities431,222 415,412 
Other liabilities32,880 37,751 
Total liabilities1,255,664 1,334,009 
Stockholders' equity:
Class A common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 53,403,939 and 52,348,511 shares, respectively53 52 
Class B common stock, $0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 16,082,738 and 16,746,676 shares, respectively16 17 
Additional paid-in capital735,277 739,870 
Retained earnings1,259,950 1,163,419 
Accumulated other comprehensive loss(38,209)(66,608)
Total stockholders’ equity1,957,087 1,836,750 
Total liabilities and stockholders’ equity$3,212,751 $3,170,759 
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HOULIHAN LOKEY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except share and per share data)2024202320242023
Revenues$574,957 $466,989 $1,088,566 $882,818 
Operating expenses:
Employee compensation and benefits353,599 287,200 669,468 542,933 
Acquisition related compensation and benefits7,038 9,342 21,285 17,092 
Travel, meals, and entertainment13,570 14,151 32,082 30,169 
Rent15,174 19,013 34,458 36,416 
Depreciation and amortization7,444 7,086 16,300 13,618 
Information technology and communications17,755 14,328 33,944 27,876 
Professional fees9,677 10,859 18,154 20,416 
Other operating expenses20,031 14,733 36,638 30,674 
Total operating expenses444,288 376,712 862,329 719,194 
Operating income130,669 90,277 226,237 163,624 
Other income, net(5,419)(3,296)(9,725)(6,301)
Income before provision for income taxes136,088 93,573 235,962 169,925 
Provision for income taxes42,539 26,542 53,473 41,504 
Net income$93,549 $67,031 $182,489 $128,421 
Weighted average shares of common stock outstanding:
Basic65,822,690 64,551,353 65,429,115 64,180,642 
Fully diluted68,422,600 67,867,381 68,450,866 67,881,623 
Earnings per share attributable to Houlihan Lokey, Inc.
Basic$1.42 $1.04 $2.79 $2.00 
Fully diluted$1.37 $0.99 $2.67 $1.89 

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO ADJUSTED FINANCIAL INFORMATION
(UNAUDITED)
Three Months Ended September 30,Six Months Ended September 30,
(In thousands, except share and per share data)2024202320242023
Revenues$574,957 $466,989 $1,088,566 $882,818 
Employee compensation and benefits expenses
Employee compensation and benefits expenses (GAAP)$360,637 $296,542 $690,753 $560,025 
Less: Acquisition related compensation and benefits(7,038)(9,342)(21,285)(17,092)
Employee compensation and benefits expenses (adjusted)353,599 287,200 669,468 542,933 
Non-compensation expenses
Non-compensation expenses (GAAP)$83,651 $80,170 $171,576 $159,169 
Less: Acquisition related legal structure reorganization(705)— (1,205)— 
Less: Integration and acquisition related costs— (1,465)(3,554)(1,465)
Less: Acquisition amortization(2,067)(3,360)(5,608)(6,715)
Non-compensation expenses (adjusted)80,879 75,345 161,209 150,989 
Operating income
Operating income (GAAP)$130,669 $90,277 $226,237 $163,624 
Plus: Adjustments (1)
9,810 14,167 31,652 25,272 
Operating income (adjusted)140,479 104,444 257,889 188,896 
Other income, net
Other income, net (GAAP)$(5,419)$(3,296)$(9,725)$(6,301)
Plus: Change in acquisition earnout liability fair value— 816 (828)816 
Other income, net (adjusted)(5,419)(2,480)(10,553)(5,485)
Provision for income taxes
Provision for income taxes (GAAP)$42,539 $26,542 $53,473 $41,504 
Plus: Impact of the excess tax benefit for stock vesting— — 21,921 7,299 
Less: Reversal of deferred tax asset— — (1,690)— 
Adjusted provision for income taxes42,539 26,542 73,704 48,803 
Plus: Resulting tax impact (2)
3,071 3,787 10,145 7,025 
Provision for income taxes (adjusted)45,610 30,329 83,849 55,828 
Net income
Net income (GAAP)$93,549 $67,031 $182,489 $128,421 
Plus/(less): Adjustments (3)
6,739 9,564 2,104 10,132 
Net income (adjusted)$100,288 $76,595 184,593 138,553 
Fully diluted shares outstanding
Fully diluted shares outstanding (GAAP)68,422,600 67,867,381 68,450,866 67,881,623 
Plus: Impact of unvested GCA retention and deferred share awards458,865 1,132,423 532,840 1,257,446 
Fully diluted shares outstanding (adjusted)68,881,465 68,999,804 68,983,706 69,139,069 
Diluted EPS attributable to Houlihan Lokey, Inc. (GAAP)$1.37 $0.99 $2.67 $1.89 
Diluted EPS attributable to Houlihan Lokey, Inc. (adjusted)$1.46 $1.11 $2.68 $2.00 
(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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