Houlihan Lokey (HLI) Q2 2025 earnings summary

Executive summary

• Revenues for the quarter ended September 30, 2024, reached $575 million, up 23% year-over-year, with adjusted EPS of $1.46 and net income up 40% to $94 million, reflecting strong performance across all business lines.

• Operating income rose 45% to $130.7 million, driven by higher transaction fees and improved segment profitability, especially in Corporate Finance and Financial Restructuring.

• All three business lines—Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory—showed strong momentum and growth.

• Recent acquisitions, including Prytania Solutions, Waller Helms, and Triago Advisors, are expected to enhance capabilities and sector coverage.

• Management expressed confidence entering the second half of FY2025, citing momentum and a robust balance sheet.

Financial highlights

• Corporate Finance revenues were $364 million, up 29% year-over-year, with 131 transactions closed and segment profit up 21% to $109.7 million.

• Financial Restructuring revenues were $132 million, up 15% year-over-year, with 33 transactions closed and segment profit up 87% to $60.9 million.

• Financial and Valuation Advisory revenues were $79 million, up 12% year-over-year, with 903 fee events and segment profit flat at $19.4 million.

• Adjusted compensation expenses were $354 million (61.5% ratio), and adjusted non-compensation expenses were $81 million (14.1% ratio).

• Cash and cash equivalents plus investment securities totaled $748 million as of September 30, 2024.

Outlook and guidance

• Positive outlook for the second half of fiscal 2025, with continued momentum in M&A, capital markets, and restructuring.

• Restructuring activity expected to remain elevated into fiscal 2026.

• No significant impact anticipated from U.S. election or public market reopening on core middle-market business.

• Management remains focused on disciplined capital allocation, talent investment, and service expansion.