HLI — Houlihan Lokey, Inc.

Summary of HLI Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenues: $659 million, up 15% year-over-year.
• Adjusted Earnings Per Share (EPS): $1.84, a 26% increase compared to the same period last year.
• Corporate Finance Revenues: $439 million, a 21% increase; 171 transactions completed, up from 131.
• Financial Restructuring Revenues: $134 million, a 2% increase; 37 transactions completed, up from 33.
• Financial and Valuation Advisory Revenues: $87 million, a 10% increase; 1,075 fee events, up from 903.
• Adjusted Compensation Expenses: $406 million, up from $354 million; adjusted compensation expense ratio maintained at 61.5%.
• Unrestricted Cash and Investment Securities: Approximately $1.1 billion.

2. Strategic Updates and Business Highlights

• The company is benefiting from a stable macro environment and improved market conditions, particularly in M&A activity.
• Corporate Finance is experiencing strong growth, with increasing deal-making appetite and a robust backlog.
• The non-U.S. business, particularly in EMEA and Asia Pacific, showed solid growth, contributing positively to overall performance.
• The company has made strategic hires and is actively pursuing acquisitions to bolster its talent pool and market presence.

3. Forward Guidance and Outlook

• The outlook for the second half of fiscal 2026 is positive, with expectations for continued year-over-year growth if current market conditions persist.
• Corporate Finance is anticipated to perform strongly in Q4, deviating from typical seasonal patterns.
• The company expects to maintain its adjusted compensation expense ratio at 61.5% for the remainder of the year.

4. Bad News, Challenges, or Points of Concern

• There are signs of slowing new business activity in Financial Restructuring, although the backlog remains strong.
• The company noted that easing interest rates and improving macro conditions could dampen restructuring activity.
• Concerns about geopolitical uncertainties and macroeconomic risks were acknowledged, although they have not materially impacted business operations.

5. Notable Q&A Insights

• Management confirmed that while there is a slowdown in the pace of new restructuring business, a robust backlog supports continued strength in that segment.
• Corporate finance activity is improving, with sponsors returning to the market, indicating a positive trend for deal-making.
• The productivity of non-U.S. bankers is lagging compared to U.S. counterparts, but growth in EMEA and Asia Pacific is encouraging.
• There is no significant impact from recent macroeconomic headlines on client sentiment or deal flow, with clients showing resilience amid uncertainty.
• Share repurchases are primarily driven by employee compensation needs and the availability of excess cash, rather than stock performance.

Overall, Houlihan Lokey's Q2 2026 results reflect strong growth across key business segments, with a positive outlook for the remainder of the fiscal year, despite some emerging challenges in restructuring and macroeconomic uncertainties.