Houlihan Lokey, Inc 10-Q for FY2027 Q2
Houlihan Lokey, Inc. (HLI)
10-Q
2026-10-30
For: 2026-09-30
View Original
Added on
October 30, 2026
About this 10-Q
Houlihan Lokey, Inc filed this 10-Q on October 30, 2026, covering the quarter ended September 30, 2026 (FY2027 Q2).
Houlihan Lokey, Inc. reported third-quarter revenues of $692 million, up 5%, and net income attributable of $109 million, down (2)%. Six-month revenues were $1.2 billion, down (5)%, while net income attributable was $187 million, down (11)%. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $692M
- up 4.8% from $660M a year earlier
- Net income
- $109M
- down 1.8% from net income of $111M a year earlier
- Diluted EPS
- $1.64
- up 0.6% from $1.63 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form | |||||
For the quarterly period ended September 30, 2026
OR
For the transition period from __________ to ______________
Commission File Number: 001-37537
| (Exact name of registrant as specified in its charter) | ||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act.
x | Accelerated filer | ¨ | |||||||||
| Non-accelerated filer | ¨ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of October 27, 2026, the registrant had 53,974,184 shares of Class A common stock, $0.001 par value per share, and 15,442,114 shares of Class B common stock, $0.001 par value per share, outstanding.
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
| Page | ||||||||
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| (In millions, except par value) | September 30, 2026 | March 31, 2026 | |||||||||
| Assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Investment securities | |||||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
Unbilled work in progress, net of allowance for credit losses of $ | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities, temporary equity and stockholders' equity | |||||||||||
| Liabilities: | |||||||||||
| Accrued salaries and bonuses | $ | $ | |||||||||
| Accounts payable and accrued expenses | |||||||||||
| Operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 15) | |||||||||||
| Redeemable noncontrolling interest | |||||||||||
| Stockholders' equity: | |||||||||||
Class A common stock, $ | |||||||||||
Class B common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders' equity | |||||||||||
| Total liabilities, temporary equity and stockholders' equity | $ | $ | |||||||||
See accompanying Notes to Consolidated Financial Statements
1
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| (In millions, except per share data) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Employee compensation and benefits | |||||||||||||||||||||||
| Acquisition related compensation and benefits | |||||||||||||||||||||||
| Travel, meals, and entertainment | |||||||||||||||||||||||
| Rent | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Information technology and communications | |||||||||||||||||||||||
| Professional fees | |||||||||||||||||||||||
| Other operating expenses | |||||||||||||||||||||||
| Revaluation of acquisition contingent consideration | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Other (income) expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Income before provision for income taxes | |||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interest | ( | ( | |||||||||||||||||||||
| Net income attributable to Houlihan Lokey, Inc. | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares of common stock outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Fully diluted | |||||||||||||||||||||||
| Earnings per common share (Note 12) | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Fully diluted | $ | $ | $ | $ | |||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements
2
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | |||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||
| Comprehensive (income) loss attributable to noncontrolling interest | ( | ( | |||||||||||||||||||||
| Comprehensive income attributable to Houlihan Lokey, Inc. | $ | $ | $ | $ | |||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements
3
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
Class A Common Stock | Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Shares | $ | Shares | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Balances – July 1, 2026 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense (Note 13) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Conversion of Class B to Class A shares | — | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Other shares repurchased/forfeited | ( | — | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to Houlihan Lokey, Inc. | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balances – September 30, 2026 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Shares | $ | Shares | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Balances – July 1, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense (Note 13) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Conversion of Class B to Class A shares | — | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Other shares repurchased/forfeited | ( | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Net income attributable to Houlihan Lokey, Inc. | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Balances – September 30, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements
4
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
Class A Common Stock | Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Shares | $ | Shares | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Balances – April 1, 2026 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Shares issued | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense (Note 13) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Conversion of Class B to Class A shares | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other shares repurchased/forfeited | ( | — | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Change in redemption value of redeemable noncontrolling interest | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Net income attributable to Houlihan Lokey, Inc. | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Balances – September 30, 2026 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
| (In millions) | Shares | $ | Shares | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Balances – April 1, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Shares issued | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense (Note 13) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Dividends | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Conversion of Class B to Class A shares | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Other shares repurchased/forfeited | ( | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Net income attributable to Houlihan Lokey, Inc. | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balances – September 30, 2025 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
See accompanying Notes to Consolidated Financial Statements
5
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended September 30, | |||||||||||
| (In millions) | 2026 | 2025 | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by/(used in) operating activities: | |||||||||||
| Non-cash lease expense | |||||||||||
| Depreciation and amortization | |||||||||||
| Revaluation of acquisition contingent consideration | |||||||||||
| Compensation expense – equity-based incentive awards (Note 13) | |||||||||||
| Other | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Unbilled work in progress | ( | ||||||||||
| Other assets | ( | ||||||||||
| Accrued salaries and bonuses | ( | ( | |||||||||
| Accounts payable and accrued expenses and other liabilities | ( | ( | |||||||||
| Net cash provided by/(used in) operating activities | ( | ||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of investment securities | ( | ( | |||||||||
| Sales or maturities of investment securities | |||||||||||
| Acquisition of businesses, net of cash acquired | ( | ( | |||||||||
| Capital expenditures | ( | ( | |||||||||
| Net cash provided by/(used in) investing activities | ( | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Dividends paid | ( | ( | |||||||||
| Share repurchases | ( | ( | |||||||||
| Payments to settle employee tax obligations on share-based awards | ( | ( | |||||||||
| Other financing activities | |||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effects of exchange rate changes on cash, cash equivalents, and restricted cash | ( | ||||||||||
| Net decrease in cash, cash equivalents, and restricted cash | ( | ( | |||||||||
| Cash, cash equivalents, and restricted cash – beginning of period | |||||||||||
| Cash, cash equivalents, and restricted cash – end of period | $ | $ | |||||||||
| Supplemental disclosures of non-cash activities: | |||||||||||
| Promissory notes and earnouts issued as consideration for acquisitions | |||||||||||
| Cash paid during the period for: | |||||||||||
| Taxes, net of refunds | |||||||||||
See accompanying Notes to Consolidated Financial Statements
6
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
Note 1 — Background
Houlihan Lokey, Inc. is a Delaware corporation. Unless the context otherwise requires, as used in this Quarterly Report on Form 10-Q, the terms “Houlihan Lokey”, “HL, Inc.”, “the Company”, “we”, “our”, and “us”, refer to Houlihan Lokey, Inc., and, in each case, unless otherwise stated, all of its subsidiaries.
The Company offers financial services and advice to a broad clientele through more than thirty offices worldwide. The Company earns professional fees by providing focused services across the following three business segments:
•Corporate Finance ("CF") provides general financial advisory services and advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions, including financial sponsors, on a wide variety of matters, including buy-side and sell-side M&A transactions, debt and equity financings in both the private and public markets, and other corporate finance transactions. The majority of our CF revenues consists of fees paid upon the successful completion of the transaction or engagement (“Completion Fees”). A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the fees paid at the time an engagement letter is signed (“Retainer Fees”) and, in some cases, fees paid during the course of the engagement (“Progress Fees”).
•Financial Restructuring ("FR") provides advice to debtors, creditors, and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; liability management transactions; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The majority of our FR revenues consists of Completion Fees. A FR transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to Retainer Fees and/or Progress Fees.
•Financial and Valuation Advisory ("FVA") primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties. Also, our FVA business segment provides dispute resolution services to clients, for which fees are usually based on the hourly rates of our financial professionals. The majority of our FVA revenues consists of Retainer Fees, Progress Fees and/or Completion Fees.
Note 2 — Basis of Presentation and Consolidation
Basis of Presentation
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP"), pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"), and include all information and footnotes required for interim condensed consolidated financial statements. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for the full fiscal year. The unaudited interim consolidated financial statements and notes to consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2026 (the "2026 Annual Report").
Certain prior year amounts have been reclassified to conform to the current period's presentation. These reclassifications had no impact on net income, stockholders' equity or net cash flows as previously reported.
Unless otherwise noted, amounts are presented in millions. Percentages presented and earnings per common share amounts are calculated from the underlying whole-dollar amounts.
7
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiaries where it has a controlling financial interest. All intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Management estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period, and disclosure of contingent assets and liabilities at the reporting date. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment when appropriate, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Items subject to such estimates and assumptions include, but are not limited to: the allowance for credit losses; the valuation of deferred tax assets, valuation of acquired intangibles and goodwill, accrued expenses, and share based compensation; the allocation of goodwill and other assets across the reporting units (segments); and reserves for income tax uncertainties and other contingencies.
Foreign Currency Transactions
From time to time, we enter into transactions to hedge our exposure to certain foreign currency fluctuations through the use of derivative instruments or other methods. As of September 30, 2026, we had two open foreign currency forward contracts outstanding between the U.S. Dollar and the Pound Sterling with an aggregate notional value of $114 . As of September 30, 2025, we had no open foreign currency forward contracts outstanding. During both the three months ended September 30, 2026 and 2025, the change in fair value of foreign currency forward contracts was immaterial and was included in Other operating expenses.
Fair Value Measurements
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels in accordance with Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurement:
•Level I Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
•Level II Inputs: Other than quoted prices included in Level I inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.
•Level III Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.
The carrying value of cash and cash equivalents, restricted cash, accounts receivable, unbilled work in progress, accounts payable and accrued expenses, and deferred income approximates fair value due to the short maturity of these instruments.
The carrying value of loans to employees included in Other assets approximates fair value due to the variable interest rate borne by those instruments.
Cash and Cash Equivalents, and Restricted Cash
8
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
The following table provides a reconciliation of cash and cash equivalents and restricted cash included within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.
| September 30, 2026 | March 31, 2026 | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Restricted cash (1) | |||||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | |||||||||
(1)Restricted cash included deposits securing letters of credit for leases, cash held in escrow accounts, and collateral to support rent guarantees. Restricted cash is included within Other assets in the Consolidated Balance Sheets.
Recent Accounting Pronouncements
In December 2025, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU clarifies existing interim reporting disclosure requirements by providing a comprehensive list of required interim disclosures and introducing a principle that requires entities to disclose events occurring since the end of the most recent annual reporting period that materially affect the entity. The guidance is effective for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires disaggregated disclosure of certain income statement expenses within the footnotes of the financial statements. The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.
Note 3 — Revenue Recognition
Contract Balances
The change in the Company’s contract assets and liabilities during the period primarily reflects the timing difference between the Company’s performance and the customer’s payment. The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:
| April 1, 2026 | Increase/(Decrease) | September 30, 2026 | |||||||||||||||
Receivables (1) | $ | $ | $ | ||||||||||||||
| Unbilled work in progress, net of allowance for credit losses | ( | ||||||||||||||||
Contract Assets (1) | |||||||||||||||||
Contract Liabilities (2) | |||||||||||||||||
(1)Included within Accounts receivable, net of allowance for credit losses in the Consolidated Balance Sheets.
(2)Represents deferred income which is included within Other liabilities in the Consolidated Balance Sheets.
During the six months ended September 30, 2026, $18 of revenues were recognized that were included in the deferred income balance at the beginning of the period.
Note 4 — Related Party Transactions
Other assets in the accompanying Consolidated Balance Sheets includes loans receivable from certain employees of $25 and $36 as of September 30, 2026 and March 31, 2026, respectively.
9
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
Note 5 — Fair Value Measurements
The following table presents information about the Company's financial assets, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values:
| September 30, 2026 | |||||||||||||||||||||||
| Level I | Level II | Level III | Total | ||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. treasury securities | |||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
| Level I | Level II | Level III | Total | ||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. treasury securities | |||||||||||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | |||||||||||||||||||
The Company had no transfers between fair value levels during the six months ended September 30, 2026.
Note 6 — Investment Securities
The amortized cost and gross unrealized gains (losses) of our investment securities accounted under the fair value method were as follows:
| September 30, 2026 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value | ||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | ( | $ | ||||||||||||||||||
| U.S. treasury securities | |||||||||||||||||||||||
| Total securities with unrealized gains/(losses) | $ | $ | $ | ( | $ | ||||||||||||||||||
| March 31, 2026 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized (Losses) | Fair Value | ||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. treasury securities | |||||||||||||||||||||||
| Total securities with unrealized gains/(losses) | $ | $ | $ | $ | |||||||||||||||||||
Scheduled maturities of the debt securities held by the Company included within the investment securities portfolio were as follows:
| September 30, 2026 | March 31, 2026 | ||||||||||||||||||||||
| Amortized Cost | Estimated Fair Value | Amortized Cost | Estimated Fair Value | ||||||||||||||||||||
| Due within one year | $ | $ | $ | $ | |||||||||||||||||||
| Due within years two through five | |||||||||||||||||||||||
| Total debt within the investment securities portfolio | $ | $ | $ | $ | |||||||||||||||||||
10
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
Note 7 — Allowance for Credit Losses
The following table presents information about the Company's allowance for credit losses:
| Balance as of April 1, 2026 | $ | ||||||||||||||||||||||
| Provision for bad debt, net | ( | ||||||||||||||||||||||
| Recovery/(write-off) of uncollectible accounts, net | ( | ||||||||||||||||||||||
Balance as of September 30, 2026 | $ | ||||||||||||||||||||||
Note 8 — Property and Equipment
Property and equipment, net of accumulated depreciation consists of the following:
| September 30, 2026 | March 31, 2026 | ||||||||||
| Equipment | $ | $ | |||||||||
| Furniture and fixtures | |||||||||||
| Leasehold improvements | |||||||||||
| Computers and software | |||||||||||
| Other | |||||||||||
| Total cost | |||||||||||
| Less: accumulated depreciation | ( | ( | |||||||||
| Total net book value | $ | $ | |||||||||
Note 9 — Goodwill and Other Intangible Assets
The following table provides a reconciliation of Goodwill and Other intangible assets, net reported on the Consolidated Balance Sheets.
| Useful Lives | September 30, 2026 | March 31, 2026 | |||||||||||||||
| Goodwill | Indefinite | $ | $ | ||||||||||||||
| Tradename-Houlihan Lokey | Indefinite | ||||||||||||||||
| Other intangible assets | Varies | ||||||||||||||||
| Total cost | |||||||||||||||||
| Less: accumulated amortization | ( | ( | |||||||||||||||
| Goodwill and Other intangible assets, net | $ | $ | |||||||||||||||
The following table provides a reconciliation of goodwill attributable to the Company’s business segments:
| April 1, 2026 | Change (1) | September 30, 2026 | |||||||||||||||
| Corporate Finance | $ | $ | $ | ||||||||||||||
| Financial Restructuring | |||||||||||||||||
| Financial and Valuation Advisory | |||||||||||||||||
| Goodwill | $ | $ | $ | ||||||||||||||
(1)Change pertains primarily to the acquisition of Intrepid Financial Partners.
11
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
Amortization expense of approximately $3 and $3 was recognized for the three months ended September 30, 2026 and 2025, respectively, and $5 and $12 was recognized for the six months ended September 30, 2026 and 2025, respectively.
The estimated future amortization for finite-lived intangible assets for each of the next five fiscal years and thereafter are as follows:
| Year Ending March 31, | |||||
| Remainder of 2027 | $ | ||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| 2031 and thereafter | |||||
Note 10 — Other Liabilities
On August 23, 2019, the Company entered into a syndicated revolving line of credit with Bank of America, N.A. and certain other financial institutions party thereto, which was amended by the First Amendment to Credit Agreement dated as of August 2, 2022, and further amended by the Second Amendment to Credit Agreement dated as of August 19, 2025 (as amended, the "HLI Line of Credit"). The HLI Line of Credit allows for borrowings of up to $150 (and, subject to certain conditions, provides the Company with an uncommitted expansion option, which, if exercised in full, would provide for a total credit facility of $200 ), and matures on August 19, 2030 (or if such date is not a business day, the immediately preceding business day). Borrowings under the HLI Line of Credit bear interest at a floating rate, which can be either, at the Company's option, (i) a term Secured Overnight Financing Rate ("SOFR") plus a 0.95 % margin per annum or (ii) a base rate, which is the highest of (a) the Federal Funds Rate plus one-half of one percent (0.50 %), (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) a term SOFR rate plus a 1.00 % margin. Commitment fees apply to unused amounts. The HLI Line of Credit contains certain financial covenants and other restrictions, including a financial loan covenant to maintain a consolidated leverage ratio of less than 2.00 to 1.00. As of September 30, 2026 and March 31, 2026, no
Note 11 — Income Taxes
The Company’s provision for income taxes was $49 and $49 for the three months ended September 30, 2026 and 2025, respectively. These represent effective tax rates of 31 % and 30 % for the three months ended September 30, 2026 and 2025, respectively.
The Company’s provision for income taxes was $57 and $49 for the six months ended September 30, 2026 and 2025, respectively. These represent effective tax rates of 23 % and 19 % for the six months ended September 30, 2026 and 2025, respectively. The increase in the Company's effective tax rate was primarily a result of decreased stock-based compensation deductions.
12
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
Note 12 — Earnings Per Common Share
The calculations of basic and diluted earnings per common share attributable to holders of shares of common stock are presented below. The determination of weighted average shares of common stock outstanding includes both the Company's Class A common stock and Class B common stock.
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income attributable to Houlihan Lokey, Inc. | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares of common stock outstanding — basic | |||||||||||||||||||||||
Weighted average number of incremental shares pertaining to unvested restricted stock and issuable in respect of unvested restricted stock units, as calculated using the treasury stock method | |||||||||||||||||||||||
| Weighted average shares of common stock outstanding — diluted | |||||||||||||||||||||||
| Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Note 13 — Employee Benefit Plans
Share-Based Incentive Plans
Awards of restricted shares and restricted stock units (“RSUs”) are made under the Second Amended and Restated Houlihan Lokey, Inc. 2016 Incentive Award Plan (the “Second A&R Plan”), which the Company’s board of directors adopted on July 22, 2026, and which was approved by the Company’s stockholders on, and became effective as of, September 16, 2026. Pursuant to the Second A&R Plan, shares available for issuance are 12.0 .
Prior to the adoption and approval of the Second A&R Plan, awards were made under the Amended and Restated Houlihan Lokey, Inc. 2016 Incentive Award Plan (the “2016 Incentive Plan”), as amended from time to time. Equity-based incentive awards issued under the Second A&R Plan and the 2016 Incentive Plan generally vest over a four-year period.
Excess tax benefits recognized during the three months ended September 30, 2026 and 2025 were immaterial. Excess tax benefits of $14 and $31 were recognized during the six months ended September 30, 2026 and 2025, respectively, as a component of the provision for income taxes.
Activity in equity-classified share awards under the 2016 Incentive Plan during the six months ended September 30, 2026 and 2025 is as follows:
| Unvested Share Awards | Shares | Weighted Average Grant Date Fair Value per Share | ||||||||||||
| Balance, April 1, 2026 | $ | |||||||||||||
| Granted | ||||||||||||||
| Vested | ( | |||||||||||||
| Forfeited/Repurchased | ( | |||||||||||||
| Balance, September 30, 2026 | $ | |||||||||||||
| Balance, April 1, 2025 | $ | |||||||||||||
| Granted | ||||||||||||||
| Vested | ( | |||||||||||||
| Forfeited/Repurchased | ( | |||||||||||||
| Balance, September 30, 2025 | $ | |||||||||||||
13
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
Activity in RSU awards under the 2016 Incentive Plan during the six months ended September 30, 2026 and 2025 is as follows:
| Restricted Stock Units | RSUs | Weighted Average Grant Date Fair Value per RSU | ||||||||||||
| RSUs as of April 1, 2026 | $ | |||||||||||||
| Issued | ||||||||||||||
| Vested | ( | |||||||||||||
| RSUs as of September 30, 2026 | $ | |||||||||||||
| RSUs as of April 1, 2025 | $ | |||||||||||||
| Issued | ||||||||||||||
| Vested | ( | |||||||||||||
| RSUs as of September 30, 2025 | $ | |||||||||||||
Compensation expenses for the Company associated with equity awards granted pursuant to the 2016 Incentive Plan totaled $43 and $47 for the three months ended September 30, 2026 and 2025, respectively, and $87 and $89 for the six months ended September 30, 2026 and 2025, respectively.
As of September 30, 2026 and 2025, there was $421 and $401 , respectively, of total unrecognized compensation cost related to unvested share awards granted under the 2016 Incentive Plan. These costs will be recognized over a weighted average period of approximately 2.0 years and 2.4 years, as of September 30, 2026 and 2025, respectively.
Note 14 — Stockholders' Equity
Dividends
Previously declared dividends related to unvested shares of $11 and $15 were unpaid as of September 30, 2026 and 2025, respectively.
On October 21, 2026, the Company's board of directors declared a quarterly cash dividend of $0.70 per share of Class A and Class B common stock, payable on December 15, 2026, to stockholders of record as of the close of business on December 1, 2026.
Share Repurchases
In April 2022, the board of directors authorized a share repurchase program for up to $500 of the Company's Class A common stock and Class B common stock. As of September 30, 2026, shares with a value of $130 remained available for purchase under the program.
During the three months ended September 30, 2026, the Company repurchased approximately 0.4 shares of its outstanding Class A common stock at a weighted average price of $125.77 per share, excluding commissions, for an aggregate purchase price of $50 . During the three months ended September 30, 2025, the Company repurchased approximately 0.1 shares of its outstanding Class A common stock at a weighted average price of $202.51 per share, excluding commissions, for an aggregate purchase price of $30 .
During the six months ended September 30, 2026 and 2025, the Company repurchased approximately 0.8 and 0.8 shares, respectively, of Class B common stock, to satisfy $107 and $138 , respectively, of required withholding taxes in connection with the vesting of restricted awards. During the six months ended September 30, 2026, the Company repurchased approximately 0.7 shares of its outstanding Class A common stock at a weighted average price of $134.17 per share, excluding commissions, for an aggregate purchase price of $100 . During the six months ended September 30, 2025, the Company repurchased approximately 0.2 shares of its outstanding Class A common stock at a weighted average price of $191.88 per share, excluding commissions, for an aggregate purchase price of $38 .
14
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
Note 15 — Commitments and Contingencies
The Company has been named in various legal actions arising in the normal course of business. In the opinion of the Company, in consultation with legal counsel, the final resolutions of these matters are not expected to have a material adverse effect on the Company’s financial condition, operations and cash flows.
There have been no material changes outside of the ordinary course of business to our known contractual obligations, which are included in Item 7 of our 2026 Annual Report.
Note 16 — Segment and Geographical Information
The Company’s reportable segments, described in Note 1, were identified based on several primary factors, including: each segment operates under independent management, offers distinct services, and requires specialized expertise for service delivery. Revenues by segment represent fees earned on the various services offered within each segment. Our operating expenses are classified as employee compensation and benefits expense and non-compensation expense; revenue and headcount are the primary drivers of our operating expenses. Our employee compensation and benefits expense consists of base salary, payroll taxes, benefits, annual incentive compensation payable as cash bonus awards, deferred cash bonus awards, and the amortization of equity-based bonus awards. The balance of our operating expenses (non-compensation expense) includes costs for travel, meals and entertainment, rent, depreciation and amortization, information technology and communications, professional fees, and other operating expenses.
Segment profit consists of segment revenues, less (1) direct expenses including employee compensation and benefits, travel, meals and entertainment, professional fees, and bad debt and (2) expenses allocated by headcount such as communications, rent, depreciation and amortization, and office expense. The corporate expense category includes costs not allocated to individual segments, including certain acquisition related charges and share-based payments to corporate employees, as well as expenses of senior management and corporate departmental functions managed on a worldwide basis, including office of the executives, accounting, human capital, marketing, data strategy group, information technology, and legal and compliance.
The following tables present information about revenues, profit and assets by segment and geography. The Company's Chief Operating Decision Maker ("CODM") is its Chief Executive Officer. The CODM oversees the performance of the Company's three reportable segments by analyzing their financial metrics, including revenues by segment and segment profit. The financial metrics the CODM regularly receives do not include asset information, and the CODM does not use segment asset information to assess performance or allocate resources.
15
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues by segment | |||||||||||||||||||||||
| Corporate Finance | $ | $ | $ | $ | |||||||||||||||||||
| Financial Restructuring | |||||||||||||||||||||||
| Financial and Valuation Advisory | |||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
Employee compensation and benefits by segment (1) | |||||||||||||||||||||||
| Corporate Finance | |||||||||||||||||||||||
| Financial Restructuring | |||||||||||||||||||||||
| Financial and Valuation Advisory | |||||||||||||||||||||||
| Non-compensation expense by segment | |||||||||||||||||||||||
| Corporate Finance | |||||||||||||||||||||||
| Financial Restructuring | |||||||||||||||||||||||
| Financial and Valuation Advisory | |||||||||||||||||||||||
| Segment profit | |||||||||||||||||||||||
| Corporate Finance | |||||||||||||||||||||||
| Financial Restructuring | |||||||||||||||||||||||
| Financial and Valuation Advisory | |||||||||||||||||||||||
| Total segment profit | |||||||||||||||||||||||
| Corporate expenses | |||||||||||||||||||||||
| Other (income) expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Income before provision for income taxes | $ | $ | $ | $ | |||||||||||||||||||
(1)We adjust the compensation expense for a business segment in situations where an employee residing in one business segment is performing work in another business segment where the revenues are accrued. Segment profit may vary significantly between periods depending on the levels of collaboration among the different segments.
| September 30, 2026 | March 31, 2026 | ||||||||||
| Assets by segment | |||||||||||
| Corporate Finance | $ | $ | |||||||||
| Financial Restructuring | |||||||||||
| Financial and Valuation Advisory | |||||||||||
| Total segment assets | |||||||||||
| Corporate assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues by geography | |||||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| International | |||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
16
HOULIHAN LOKEY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(In millions, except per share data or as otherwise stated)
| September 30, 2026 | March 31, 2026 | ||||||||||
| Assets by geography | |||||||||||
| United States | $ | $ | |||||||||
| International | |||||||||||
| Total assets | $ | $ | |||||||||
17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
The following discussion should be read together with our consolidated financial statements and the related notes that appear elsewhere in this Quarterly Report on Form 10-Q. We make statements in this discussion that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “intends,” “predicts,” “potential” or “continue,” the negative of these terms or other similar expressions. These forward-looking statements, which are subject to risks, uncertainties, and assumptions about us, may include projections of our future financial performance, based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including but not limited to, the factors listed under the heading “Cautionary Note Regarding Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended March 31, 2026 (the “2026 Annual Report”). Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements speak only as of the date of this filing. You should not rely upon forward-looking statements as a prediction of future events. We are under no duty to, and we do not undertake any obligation to, update or review any of these forward-looking statements after the date of this filing to conform our prior statements to actual results or revised expectations whether as a result of new information, future developments or otherwise.
Key Financial Measures
Revenues
Revenues include fee revenues and reimbursements of expenses. Revenues are generated from our Corporate Finance (“CF”), Financial Restructuring (“FR”), and Financial and Valuation Advisory (“FVA”) business segments and primarily consist of fees for advisory services.
Revenues for all three business segments are recognized upon satisfaction of the performance obligation and may be satisfied over time or at a point in time. The amount and timing of the fees paid vary by the type of engagement. In general, advisory fees are paid at the time an engagement letter is signed (“Retainer Fees”), during the course of the engagement (“Progress Fees”), or upon the successful completion of a transaction or engagement (“Completion Fees”).
CF provides general financial advisory services and advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions, including financial sponsors, on a wide variety of matters, including buy-side and sell-side M&A transactions, debt and equity financings in both the private and public markets, and other corporate finance transactions. The majority of our CF revenues consists of Completion Fees. A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to Retainer Fees and in some cases Progress Fees that may have been received.
FR provides advice to debtors, creditors, and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; liability management transactions; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The majority of our FR revenues consists of Completion Fees. A FR transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees.
FVA primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties. Also, our FVA business segment provides dispute resolution services to clients, for which fees are usually based on the hourly rates of our financial professionals. The majority of our FVA revenues consists of Retainer Fees, Progress Fees and/or Completion Fees.
18
Operating Expenses
Our operating expenses are classified as compensation expenses and non-compensation expenses; revenue and headcount are the primary drivers of our operating expenses. Reimbursements of certain out-of-pocket deal expenses are recorded on a gross basis and are therefore included in both Revenues and Operating expenses in the Consolidated Statements of Income.
Compensation Expenses. Our compensation expenses are comprised of employee compensation and benefits and acquisition related compensation and benefits expenses. Compensation expenses account for the majority of our operating expenses, and are determined by management based on revenues earned, headcount, the competitiveness of the prevailing labor market, and anticipated compensation expectations of our employees. These factors may fluctuate, and as a result, our compensation expenses may fluctuate materially in any particular period. Accordingly, the amount of compensation expenses recognized in any particular period may not be consistent with prior periods or indicative of future periods. In connection with certain acquisitions, certain employees may be entitled to deferred consideration, primarily in the form of retention payments, should certain service and/or performance conditions be met in the future. As a result of these conditions, such deferred consideration would be expensed as compensation in current and future periods and has been accrued as liabilities on the Consolidated Balance Sheets as of September 30, 2026 and March 31, 2026.
Employee compensation and benefits consist of base salary, payroll taxes, benefits, annual incentive compensation payable as cash bonus awards, deferred cash bonus awards, and the amortization of equity-based bonus awards. Base salary and benefits are paid ratably throughout the year. Equity awards are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which typically occurs in the first quarter of each fiscal year; accordingly, expenses are amortized over the stated vesting period. In most circumstances, the unvested portion of these awards is subject to forfeiture should the employee depart from the Company, and in certain cases if certain financial metrics are not met. Cash bonuses, which are accrued monthly, are discretionary and dependent upon a number of factors including the Company's performance, and are generally paid in the first quarter of each fiscal year with respect to prior year performance. Generally, a portion of the cash bonus is deferred and paid in the third quarter of the fiscal year in which the bonus is awarded.
We refer to the ratio of our compensation expenses to our revenues as our “Compensation Ratio.”
Non-Compensation Expenses. The balance of our operating expenses includes costs for travel, meals and entertainment, rent, depreciation and amortization, information technology and communications, professional fees, other operating expenses, and gains and/or losses associated with changes in the fair value of earnout liabilities. We refer to all of these expenses as non-compensation expenses. A portion of our non-compensation expenses fluctuates in response to changes in headcount.
Other (Income) Expense, Net
Other (income) expense, net primarily includes interest income and gains earned on investment securities, cash and cash equivalents, employee loans, and commercial paper.
Results of Consolidated Operations
The following is a discussion of our results of operations for the three and six months ended September 30, 2026 and 2025.
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||||||||||||||
($ in millions) | 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||
| Revenues | $ | 692 | $ | 660 | 5 | % | $ | 1,203 | $ | 1,265 | (5) | % | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Compensation | 441 | 423 | 4 | % | 769 | 816 | (6) | % | |||||||||||||||||||||||||||
| Non-compensation | 97 | 86 | 14 | % | 202 | 208 | (3) | % | |||||||||||||||||||||||||||
| Total operating expenses | 538 | 509 | 6 | % | 971 | 1,024 | (5) | % | |||||||||||||||||||||||||||
| Operating income | 154 | 151 | 2 | % | 232 | 241 | (4) | % | |||||||||||||||||||||||||||
| Other (income) expense, net | (5) | (9) | (42) | % | (13) | (17) | (22) | % | |||||||||||||||||||||||||||
| Income before provision for income taxes | 159 | 160 | — | % | 245 | 258 | (5) | % | |||||||||||||||||||||||||||
| Provision for income taxes | 49 | 49 | 1 | % | 57 | 49 | 17 | % | |||||||||||||||||||||||||||
| Net income | 110 | 111 | (1) | % | 188 | 209 | (10) | % | |||||||||||||||||||||||||||
| Net income attributable to noncontrolling interest | (1) | — | NM | (1) | — | NM | |||||||||||||||||||||||||||||
| Net income attributable to Houlihan Lokey, Inc. | $ | 109 | $ | 111 | (2) | % | $ | 187 | $ | 209 | (11) | % | |||||||||||||||||||||||
19
Three Months Ended September 30, 2026 versus September 30, 2025
Revenues were $692 million for the three months ended September 30, 2026, compared with $660 million for the three months ended September 30, 2025, representing an increase of 5%. The increase in revenues was primarily driven by higher revenues from our CF segment, as described in further detail below.
Compensation expenses were $441 million for the three months ended September 30, 2026, compared with $423 million for the three months ended September 30, 2025, representing an increase of 4%. The increase in compensation expenses was primarily a result of an increase in revenues for the quarter when compared with the same quarter last year. The Compensation Ratio was 63.7% for the three months ended September 30, 2026, compared with 64.2% for the three months ended September 30, 2025.
Non-compensation expenses were $97 million for the three months ended September 30, 2026, compared with $86 million for the three months ended September 30, 2025, representing an increase of 14%. The increase in non-compensation expenses was primarily a result of increases in rent expense and other operating expenses when compared with the same quarter last year.
Other (income) expense, net was $(5) million for the three months ended September 30, 2026, compared with $(9) million for the three months ended September 30, 2025. Other (income) expense, net decreased primarily due to lower cash balances and lower returns on our investments.
The provision for income taxes for the three months ended September 30, 2026 was $49 million, which reflected an effective tax rate of 31%. The provision for income taxes for the three months ended September 30, 2025 was $49 million, which reflected an effective tax rate of 30%.
Six Months Ended September 30, 2026 versus September 30, 2025
Revenues were $1.2 billion for the six months ended September 30, 2026, compared with $1.3 billion for the six months ended September 30, 2025, representing a decrease of (5)%. The decrease in revenues was primarily driven by lower revenues from our CF segment, as described in further detail below.
Compensation expenses were $769 million for the six months ended September 30, 2026, compared with $816 million for the six months ended September 30, 2025, representing a decrease of (6)%. The decrease in compensation expenses was primarily a result of lower revenues for the period when compared with the same period last year. The Compensation Ratio was 63.9% for the six months ended September 30, 2026, compared with 64.5% for the six months ended September 30, 2025.
Non-compensation expenses remained relatively flat at $202 million for the six months ended September 30, 2026, compared with $208 million for the six months ended September 30, 2025.
Other (income) expense, net decreased to $(13) million for the six months ended September 30, 2026, compared with $(17) million for the six months ended September 30, 2025, primarily due to lower cash balances and lower returns on our investments.
The provision for income taxes for the six months ended September 30, 2026 was $57 million, which reflected an effective tax rate of 23%. The provision for income taxes for the six months ended September 30, 2025 was $49 million, which reflected an effective tax rate of 19%. The increase in the Company's tax rate was primarily a result of decreased stock-based compensation deductions.
20
Business Segments
The following table presents revenues and profit from our business segments. The revenues by segment represent each segment’s revenues, and the profit by segment represents profit for each segment before corporate expenses, other (income) expense, net, and income taxes.
| Three Months Ended September 30, | Six Months Ended September 30, | ||||||||||||||||||||||||||||||||||
($ in millions) | 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||
| Revenues by segment | |||||||||||||||||||||||||||||||||||
| Corporate Finance | $ | 481 | $ | 439 | 10 | % | $ | 784 | $ | 837 | (6) | % | |||||||||||||||||||||||
| Financial Restructuring | 118 | 134 | (12) | % | 237 | 262 | (10) | % | |||||||||||||||||||||||||||
| Financial and Valuation Advisory | 93 | 87 | 7 | % | 182 | 166 | 10 | % | |||||||||||||||||||||||||||
| Revenues | $ | 692 | $ | 660 | 5 | % | $ | 1,203 | $ | 1,265 | (5) | % | |||||||||||||||||||||||
Segment profit (1) | |||||||||||||||||||||||||||||||||||
| Corporate Finance | $ | 170 | $ | 147 | 15 | % | $ | 259 | $ | 274 | (5) | % | |||||||||||||||||||||||
| Financial Restructuring | 40 | 50 | (20) | % | 82 | 93 | (12) | % | |||||||||||||||||||||||||||
| Financial and Valuation Advisory | 29 | 25 | 12 | % | 52 | 43 | 21 | % | |||||||||||||||||||||||||||
| Total segment profit | 239 | 222 | 7 | % | 393 | 410 | (4) | % | |||||||||||||||||||||||||||
Corporate expenses (2) | 85 | 71 | 18 | % | 161 | 169 | (5) | % | |||||||||||||||||||||||||||
| Other (income) expense, net | (5) | (9) | (42) | % | (13) | (17) | (22) | % | |||||||||||||||||||||||||||
| Income before provision for income taxes | $ | 159 | $ | 160 | — | % | $ | 245 | $ | 258 | (5) | % | |||||||||||||||||||||||
Segment metrics | |||||||||||||||||||||||||||||||||||
Number of Managing Directors (3) | |||||||||||||||||||||||||||||||||||
| Corporate Finance | 267 | 242 | 10 | % | 267 | 242 | 10 | % | |||||||||||||||||||||||||||
| Financial Restructuring | 57 | 58 | (2) | % | 57 | 58 | (2) | % | |||||||||||||||||||||||||||
| Financial and Valuation Advisory | 46 | 45 | 2 | % | 46 | 45 | 2 | % | |||||||||||||||||||||||||||
Number of closed transactions/Fee Events (4) | |||||||||||||||||||||||||||||||||||
| Corporate Finance | 142 | 171 | (17) | % | 269 | 296 | (9) | % | |||||||||||||||||||||||||||
| Financial Restructuring | 27 | 37 | (27) | % | 50 | 72 | (31) | % | |||||||||||||||||||||||||||
| Financial and Valuation Advisory | 1,071 | 1,075 | — | % | 1,554 | 1,517 | 2 | % | |||||||||||||||||||||||||||
(1)We adjust the compensation expense for a business segment in situations where an employee residing in one business segment is performing work in another business segment where the revenues are accrued. Segment profit may vary significantly between periods depending on the levels of collaboration among the different segments.
(2)Corporate expenses include costs not allocated to individual segments, including certain acquisition related charges and share-based payments to corporate employees, as well as expenses of senior management and corporate departmental functions managed on a worldwide basis, including office of the executives, accounting, human capital, marketing, data strategy group, information technology, and legal and compliance.
(3)As of the end of the respective reporting periods.
(4)Fee Events applicable to FVA only; a Fee Event includes any engagement that involves revenue activity during the measurement period with a revenue minimum of one thousand dollars. References to closed transactions should be understood to be the same as transactions that are “effectively closed” as described in our 2026 Annual Report.
Corporate Finance
Three Months Ended September 30, 2026 versus September 30, 2025
Revenues for CF were $481 million for the three months ended September 30, 2026, compared with $439 million for the three months ended September 30, 2025, representing an increase of 10%. Revenues increased due to an increase in the average transaction fee on closed transactions, which was driven by transaction mix and improved market conditions for M&A and capital markets transactions. This increase was partially offset by a decline in the number of closed transactions, which we believe does not represent a trend.
Segment profit for CF was $170 million for the three months ended September 30, 2026, compared with $147 million for the three months ended September 30, 2025, an increase of 15%. Profitability increased primarily as a result of an increase in revenues when compared to the same quarter last year.
21
Six Months Ended September 30, 2026 versus September 30, 2025
Revenues for CF were $784 million for the six months ended September 30, 2026, compared with $837 million for the six months ended September 30, 2025, representing a decrease of (6)%. Revenues decreased due to a decline in the number of transactions closed, which we believe does not represent a trend.
Segment profit for CF was $259 million for the six months ended September 30, 2026, compared with $274 million for the six months ended September 30, 2025, a decrease of (5)%. Profitability decreased primarily as a result of a decrease in revenues when compared to the same period last year.
Financial Restructuring
Three Months Ended September 30, 2026 versus September 30, 2025
Revenues for FR were $118 million for the three months ended September 30, 2026, compared with $134 million for the three months ended September 30, 2025, representing a decrease of (12)%. Revenues decreased primarily due to a decrease in the number of closed transactions, driven by timing of transaction closings. This was partially offset by an increase in the average transaction fee on closed transactions, driven by transaction mix, which we believe does not represent a trend.
Segment profit for FR was $40 million for the three months ended September 30, 2026, compared with $50 million for the three months ended September 30, 2025, a decrease of (20)%. Profitability decreased primarily as a result of a decrease in revenues and higher compensation expenses as a percentage of revenues when compared to the same quarter last year.
Six Months Ended September 30, 2026 versus September 30, 2025
Revenues for FR were $237 million for the six months ended September 30, 2026, compared with $262 million for the six months ended September 30, 2025, representing a decrease of (10)%. Revenues decreased primarily due to a decrease in the number of closed transactions, driven by timing of transaction closings. This was partially offset by an increase in the average transaction fee on closed transactions, driven by transaction mix, which we believe does not represent a trend.
Segment profit for FR was $82 million for the six months ended September 30, 2026, compared with $93 million for the six months ended September 30, 2025, a decrease of (12)%. Profitability decreased primarily as a result of a decrease in revenues when compared to the same period last year.
Financial and Valuation Advisory
Three Months Ended September 30, 2026 versus September 30, 2025
Revenues for FVA were $93 million for the three months ended September 30, 2026, compared with $87 million for the three months ended September 30, 2025, representing an increase of 7%. Revenues increased due to growth in our non-cyclical businesses.
Segment profit for FVA was $29 million for the three months ended September 30, 2026, compared with $25 million for the three months ended September 30, 2025, an increase of 12%. Profitability increased primarily as a result of an increase in revenues and lower compensation expenses as a percentage of revenues, partially offset by higher non-compensation expenses as a percentage of revenues when compared to the same quarter last year.
Six Months Ended September 30, 2026 versus September 30, 2025
Revenues for FVA were $182 million for the six months ended September 30, 2026, compared with $166 million for the six months ended September 30, 2025, representing an increase of 10%. Revenues increased due to growth in our cyclical and non-cyclical businesses.
Segment profit for FVA was $52 million for the six months ended September 30, 2026, compared with $43 million for the six months ended September 30, 2025, an increase of 21%. Profitability increased primarily as a result of an increase in revenues and lower compensation expenses as a percentage of revenues when compared to the same period last year.
22
Corporate Expenses
Three Months Ended September 30, 2026 versus September 30, 2025
Corporate expenses were $85 million for the three months ended September 30, 2026, compared with $71 million for the three months ended September 30, 2025, an increase of 18%. Corporate expenses increased primarily as a result of an increase in other operating expenses and higher compensation expenses when compared with the same quarter last year.
Six Months Ended September 30, 2026 versus September 30, 2025
Corporate expenses were $161 million for the six months ended September 30, 2026, compared with $169 million for the six months ended September 30, 2025, a decrease of (5)%. Corporate expenses decreased primarily as a result of a decrease in revaluation of acquisition contingent consideration and a decrease in depreciation and amortization, partially offset by an increase in other operating expenses, when compared with the same period last year.
Liquidity and Capital Resources
Our current assets are primarily comprised of cash and cash equivalents, investment securities, accounts receivable, and unbilled work in progress related to fees earned from providing advisory services. Our current liabilities are primarily comprised of accrued salaries and bonuses and accounts payable and accrued expenses.
Our cash and cash equivalents include cash held at banks. We maintain moderate levels of cash on hand in support of regulatory requirements for our registered broker-dealer. As of September 30, 2026 and March 31, 2026, we had $622 million and $860 million of cash and cash equivalents in foreign subsidiaries, respectively. Our excess cash may be invested in short-term investments, including treasury securities, commercial paper, certificates of deposit, and investment grade corporate debt securities. Please refer to Note 6 for further detail.
As of September 30, 2026 and March 31, 2026, our cash and cash equivalents and investment securities were as follows:
($ in millions) | September 30, 2026 | March 31, 2026 | |||||||||
| Cash and cash equivalents | $ | 837 | $ | 1,189 | |||||||
| Investment securities | 51 | 170 | |||||||||
| Total Cash and cash equivalents and Investment securities | $ | 888 | $ | 1,359 | |||||||
Our liquidity is highly dependent upon cash receipts from clients that are generally dependent upon the successful completion of transactions as well as the timing of receivables collections, which typically occur within 60 days of billing. As of September 30, 2026, Accounts receivable, net of allowance for credit losses was $285 million. As of September 30, 2026, Unbilled work in progress, net of allowance for credit losses was $267 million.
On August 23, 2019, the Company entered into a syndicated revolving line of credit with Bank of America, N.A. and certain other financial institutions party thereto, which was amended by the First Amendment to Credit Agreement dated as of August 2, 2022, and further amended by the Second Amendment to Credit Agreement dated as of August 19, 2025 (as amended, the "HLI Line of Credit"). The HLI Line of Credit allows for borrowings of up to $150 million (and, subject to certain conditions, provides the Company with an uncommitted expansion option, which, if exercised in full, would provide for a total credit facility of $200 million), and matures on August 19, 2030 (or if such date is not a business day, the immediately preceding business day). Borrowings under the HLI Line of Credit bear interest at a floating rate, which can be either, at the Company's option, (i) a term Secured Overnight Financing Rate ("SOFR") plus a 0.95% margin per annum or (ii) a base rate, which is the highest of (a) the Federal Funds Rate plus one-half of one percent (0.50%), (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) a term SOFR rate plus a 1.00% margin. Commitment fees apply to unused amounts. The HLI Line of Credit contains certain financial covenants and other restrictions, including a financial loan covenant to maintain a consolidated leverage ratio of less than 2.00 to 1.00. As of September 30, 2026, we were, and expect to continue to be, in compliance with such covenants. As of September 30, 2026 and March 31, 2026, no principal was outstanding under the HLI Line of Credit.
The majority of the Company's payment obligations and commitments pertain to routine operating leases. The Company also has various obligations, including notes payable and contingent consideration issued in connection with businesses previously acquired.
23
Cash Flows
Our operating cash flows are primarily influenced by the amount and timing of receipt of advisory fees and the payment of operating expenses, including payments of incentive compensation to our employees. We pay a significant portion of our incentive compensation during the first and third quarters of each fiscal year. A summary of our operating, investing, and financing cash flows is as follows:
| Six Months Ended September 30, | |||||||||||||||||
($ in millions) | 2026 | 2025 | Change | ||||||||||||||
| Operating activities: | |||||||||||||||||
| Net income | $ | 188 | $ | 209 | (10) | % | |||||||||||
| Non-cash charges | 125 | 153 | (19) | % | |||||||||||||
| Other operating activities | (397) | (169) | 135 | % | |||||||||||||
| Net cash provided by/(used in) operating activities | (84) | 193 | (143) | % | |||||||||||||
| Net cash provided by/(used in) investing activities | 51 | (5) | NM | ||||||||||||||
| Net cash used in financing activities | (314) | (269) | 17 | % | |||||||||||||
| Effects of exchange rate changes on cash, cash equivalents, and restricted cash | (4) | 33 | (113) | % | |||||||||||||
| Net decrease in cash, cash equivalents, and restricted cash | (351) | (48) | 645 | % | |||||||||||||
| Cash, cash equivalents, and restricted cash — beginning of period | 1,193 | 976 | 22 | % | |||||||||||||
| Cash, cash equivalents, and restricted cash — end of period | $ | 842 | $ | 928 | (9) | % | |||||||||||
Six Months Ended September 30, 2026
Operating activities resulted in a net outflow of $(84) million, primarily attributable to cash bonus payments in May 2026, partially offset by net income. Investing activities resulted in a net inflow of $51 million, primarily attributable to sales or maturities of investment securities, partially offset by cash consideration transferred in connection with business acquisitions and cash paid for capital expenditures. Financing activities resulted in a net outflow of $(314) million, primarily attributable to dividends paid, payments made to settle employee tax obligations on share-based awards, and share repurchases.
Six Months Ended September 30, 2025
Operating activities resulted in a net inflow of $193 million, primarily attributable to net income, partially offset by cash bonus payments in May 2025. Investing activities resulted in a net outflow of $(5) million, primarily attributable to purchases of investment securities and cash paid for capital expenditures, partially offset by sales or maturities of investment securities. Financing activities resulted in a net outflow of $(269) million, primarily attributable to payments made to settle employee tax obligations on share-based awards, dividends paid, and share repurchases.
Contractual Obligations
There have been no material changes outside of the ordinary course of business to our known contractual obligations, which are included in Item 7 of our 2026 Annual Report.
Critical Accounting Policies and Estimates
The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period for which they are determined to be necessary.
During the six months ended September 30, 2026, there were no significant changes to our critical accounting policies and estimates. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Part II, Item 7 of our 2026 Annual Report, for a more complete discussion of our critical accounting policies and estimates.
Recent Accounting Developments
For information on recently issued accounting developments and their impact or potential impact on our consolidated financial statements, see Note 2 to our unaudited consolidated financial statements in this Form 10-Q.
24
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market Risk and Credit Risk
There has been no material change in our exposure to market risk from that described in Part II, Item 7A of our 2026 Annual Report.
Risks Related to Cash and Short-Term Investments
There has been no material change in our exposure to risks related to our cash and short-term investments from that described in Part II, Item 7A of our 2026 Annual Report.
Exchange Rate Risk
The exchange rate of the U.S. Dollar relative to the currencies in the non-U.S. countries in which we operate may have an effect on the reported value of our non-U.S. Dollar denominated or non-U.S.-based assets and liabilities and, therefore, may be reflected as a change in other comprehensive income, net of tax. Our non-U.S. assets and liabilities that are sensitive to exchange rates consist primarily of trade payables and receivables, work in progress, and cash. For the three months ended September 30, 2026 and 2025, the net impact of the fluctuation of foreign currencies in other comprehensive income within the Consolidated Statements of Comprehensive Income was $1 million and $(14) million, respectively. For the six months ended September 30, 2026 and 2025, the net impact of the fluctuation of foreign currencies in other comprehensive income within the Consolidated Statements of Comprehensive Income was $(1) million and $34 million, respectively. A hypothetical 10% depreciation in the U.S. Dollar relative to the functional currencies of our foreign subsidiaries as of September 30, 2026, would have resulted in an increase in our other comprehensive income, net of tax, of approximately $118 million for the six months ended September 30, 2026.
For additional discussion on our exchange rate risk, refer to Part II, Item 7A of our 2026 Annual Report. Additionally, refer to Note 2 for disclosures regarding foreign currency forward contracts which we may use from time to time to hedge our foreign currency exposures.
Item 4. Controls and Procedures
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management, including the chief executive officer and chief financial officer, recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2026.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control over financial reporting performed during the fiscal quarter ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. There has been no material change in the nature of our legal proceedings from the descriptions contained in our 2026 Annual Report.
25
Item 1A. Risk Factors
There have been no material changes to the risk factors disclosed in our 2026 Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There have been no sales of unregistered equity securities during the quarter ended September 30, 2026.
Purchases of Equity Securities
The following table summarizes all of the repurchases of Houlihan Lokey, Inc. equity securities during the quarter ended September 30, 2026:
| Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||||||||||||||
July 1, 2026 - July 31, 2026 (2) | 27,443 | $ | 57.77 | — | $ | 180,135,606 | ||||||||||||||||||||
August 1, 2026 - August 31, 2026 (3) | 397,603 | 125.77 | 397,442 | 130,147,600 | ||||||||||||||||||||||
| September 1, 2026 - September 30, 2026 | — | — | — | 130,147,600 | ||||||||||||||||||||||
| Total | 425,046 | $ | 121.38 | 397,442 | $ | 130,147,600 | ||||||||||||||||||||
(1)The shares of Class A common stock repurchased through this program have been retired. On May 12, 2022, the Company announced that the Company's board of directors had authorized a share repurchase program, which provides for share repurchases of up to $500 million of the Company's Class A common stock and Class B common stock. This share repurchase program does not expire.
(2)Total Number of Shares Purchased includes: (i) 578 unvested shares of Class B common stock at an average price per share of $137.96, which were withheld from employees to satisfy tax withholding obligations resulting from the vesting of certain restricted stock awards, and (ii) 26,865 restricted shares of Class B common stock at an average price per share of $56.05, which were repurchased from a former employee upon termination of employment pursuant to the Company’s repurchase right under a restricted stock award granted in connection with a prior business acquisition.
(3)Total Number of Shares Purchased includes 161 unvested shares of Class B common stock at an average price per share of $125.98, which were withheld from employees to satisfy tax withholding obligations resulting from the vesting of certain restricted stock awards.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(c) During the fiscal quarter ended September 30, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).
26
Item 6. Exhibits
Incorporated by Reference | ||||||||||||||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed / Furnished Herewith | ||||||||||||||||||||||||||||||||
Second Amended and Restated Certificate of Incorporation of Houlihan Lokey, Inc., dated September 21, 2023. | 8-K | 001-37537 | 3.1 | 9/22/23 | ||||||||||||||||||||||||||||||||||
Amended and Restated Bylaws of the Company, dated July 26, 2023. | 8-K | 001-37537 | 3.1 | 8/1/23 | ||||||||||||||||||||||||||||||||||
| Amended and Restated Voting Trust Agreement, dated as of December 30, 2025, by and among the Company and the Trustees. | 8-K | 001-37537 | 9.1 | 12/30/25 | ||||||||||||||||||||||||||||||||||
10.1† | Second Amended and Restated Houlihan Lokey, Inc. 2016 Incentive Award Plan. | 8-K | 001-37537 | 10.1 | 9/22/26 | |||||||||||||||||||||||||||||||||
| Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer. | * | |||||||||||||||||||||||||||||||||||||
| Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer. | * | |||||||||||||||||||||||||||||||||||||
| Section 1350 Certification of Chief Executive Officer. | ** | |||||||||||||||||||||||||||||||||||||
| Section 1350 Certification of Chief Financial Officer. | ** | |||||||||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | * | ||||||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | * | ||||||||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | * | ||||||||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | * | ||||||||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | * | ||||||||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | * | ||||||||||||||||||||||||||||||||||||
| 104.1 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | * | ||||||||||||||||||||||||||||||||||||
* | Filed herewith. | |||||||
** | Furnished herewith. | |||||||
| † | Indicates a management contract or compensation plan or arrangement. | |||||||
27
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HOULIHAN LOKEY, INC. | |||||||||||
| Date: | October 30, 2026 | /s/ SCOTT J. ADELSON | |||||||||
| Scott J. Adelson | |||||||||||
| Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
| Date: | October 30, 2026 | /s/ J. LINDSEY ALLEY | |||||||||
| J. Lindsey Alley | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial and Accounting Officer) | |||||||||||
28
Exhibit 31.1
CERTIFICATIONS
I, Scott J. Adelson, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q for the period ending September 30, 2026 of Houlihan Lokey, Inc. as filed with the Securities and Exchange Commission on the date hereof;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | October 30, 2026 | /s/ SCOTT J. ADELSON | ||||||
| Scott J. Adelson | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 31.2
CERTIFICATIONS
I, J. Lindsey Alley, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q for the period ending September 30, 2026 of Houlihan Lokey, Inc. as filed with the Securities and Exchange Commission on the date hereof;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | October 30, 2026 | /s/ J. LINDSEY ALLEY | ||||||
| J. Lindsey Alley | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Scott J. Adelson, Chief Executive Officer and Director of Houlihan Lokey, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1)The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: | October 30, 2026 | /s/ SCOTT J. ADELSON | ||||||
| Scott J. Adelson | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, J. Lindsey Alley, Chief Financial Officer of Houlihan Lokey, Inc. (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
(1)The Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: | October 30, 2026 | /s/ J. LINDSEY ALLEY | ||||||
| J. Lindsey Alley | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial and Accounting Officer) | ||||||||