Houlihan Lokey (HLI) Q3 2025 earnings summary

Executive summary

• Revenues for the quarter ended December 31, 2024, reached $634.4 million, up 24% year-over-year, with net income of $95.3 million and adjusted EPS of $1.64, up 34% from the prior year period.

• All three business lines—Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory—showed positive momentum, benefiting from improved M&A and financing markets and stable macroeconomic conditions.

• Operating income rose 41% year-over-year to $136.1 million, with adjusted operating income at $161 million.

• The company declared a quarterly dividend of $0.57 per share, payable March 15, 2025.

• Management remains optimistic for the remainder of fiscal 2025 and into fiscal 2026, citing a stronger macro environment and increased market confidence post-U.S. election.

Financial highlights

• Corporate Finance revenue was $422 million, up 36% year-over-year, with 170 transactions closed; Financial Restructuring revenue was $131 million, up 2%, with 41 transactions; Financial and Valuation Advisory revenue was $82 million, up 14%, with 1,005 fee events.

• Adjusted compensation expenses were $390 million (61.5% ratio), and adjusted non-compensation expenses were $83 million (13.1% ratio).

• Cash and cash equivalents plus investment securities totaled $903 million at quarter end.

• Adjusted other income was $9 million, up from $6 million, mainly due to higher interest income.

• Adjusted effective tax rate was 33.3%, up from 30.3% last year, expected to settle between 31% and 32% for the full year.

Outlook and guidance

• Management expects continued strong performance, supported by robust M&A and capital markets activity, and remains optimistic for fiscal 2026.

• Seasonality is expected to remain consistent with historical patterns, with a stronger second half of the fiscal year.

• Adjusted non-compensation expense growth for Q4 is expected to be in the high single digits year-over-year.