HLI — Houlihan Lokey, Inc.

Summary of HLI Q3 2026 Earnings Call

1. Key Financial Results and Metrics:

• Revenues: $717 million, up 13% year-over-year.
• Adjusted Earnings Per Share (EPS): $1.94, an 18% increase compared to the same period last year.
• Corporate Finance Revenue: $474 million, a 12% increase; 177 transactions closed, up from 170.
• Financial Restructuring Revenue: $156 million, a 19% increase; 41 transactions closed, consistent with last year.
• Financial and Valuation Advisory Revenue: $87 million, a 6% increase; 1,103 fee events, up 10% year-over-year.
• Adjusted Compensation Expense Ratio: 61.5%, consistent with the previous year.

2. Strategic Updates and Business Highlights:

• Acquisitions: Closed acquisition of Mellon Capital's real estate advisory business and announced a controlling interest in O'Dare Partners, enhancing European presence.
• Workforce Expansion: Hired six new managing directors, strengthening capabilities across regions.
• Market Position: Recognized as the most active M&A investment bank globally and in financial restructuring.
• Geographic Focus: Significant growth in Europe, with plans to expand further, particularly in France.

3. Forward Guidance and Outlook:

• Corporate Finance: Positive outlook for fiscal 2027, driven by improving M&A activity and investor sentiment.
• Financial Restructuring: Anticipates revenue pressures in fiscal 2027 due to an improving market environment but acknowledges potential geopolitical events that could increase restructuring activity.
• Capital Solutions: Early stages of growth, with a strong pipeline of opportunities across various sectors.

4. Bad News, Challenges, or Points of Concern:

• Restructuring Activity: Expected to face revenue pressures as the market improves, with visibility into new opportunities remaining unclear.
• Geopolitical Risks: Ongoing geopolitical events may create uncertainty, impacting deal flow and restructuring needs.
• Market Competition: While HLI is gaining market share, competition remains strong, particularly in large-cap M&A.

5. Notable Q&A Insights:

• Restructuring Outlook: Management acknowledged that while M&A activity is improving, there are concerns about the private credit market, which could impact restructuring.
• Corporate Finance Growth: The company expects continued strength in corporate finance, with Q4 performance likely to mirror earlier quarters rather than typical seasonal patterns.
• Sector-Specific Opportunities: Management expressed confidence in broad-based growth opportunities across sectors, particularly in Europe, and emphasized the importance of their differentiated product offerings.
• Capital Management: The firm remains focused on strategic acquisitions while also considering share repurchases, indicating a balanced approach to capital deployment.

This summary encapsulates HLI's performance and strategic direction as of Q3 2026, highlighting both achievements and challenges faced in the current market environment.