Houlihan Lokey (HLI) investor relations material

Executive summary

• Revenues for Q2 FY2026 reached $659 million, up 15% year-over-year, with adjusted EPS of $1.84, and net income of $112 million, reflecting strong business momentum and improved market conditions.

• Adjusted pre-tax income grew at a 17% CAGR over five years, with adjusted pre-tax margins consistently above 23%.

• Maintained market leadership in M&A, restructuring, and fairness opinion advisory, ranking No. 1 globally in deal count across multiple sectors in 2024.

• Diversified business model across clients, industries, geographies, and professionals, reducing revenue and earnings volatility.

• Operating income for Q2 FY2026 was $151 million, up from $131 million in Q2 FY2025.

Financial highlights

• Corporate Finance revenues were $439 million, up 21% year-over-year, with 171 transactions closed; Financial Restructuring revenues were $134 million, up 2%, and Financial and Valuation Advisory revenues were $87 million, up 10%.

• Six-month revenues reached $1.26 billion, up 16% year-over-year, and six-month net income was $209.3 million, a 15% increase.

• Compensation expenses for Q2 FY2026 were $423 million (64.2% of revenues), with adjusted compensation at $406 million (61.5% of revenues); non-compensation expenses were $85 million, with adjusted non-compensation at $82 million.

• Adjusted effective tax rate was 29.7%, down from 31.3% year-over-year.

• Unrestricted cash and investment securities totaled $1.11 billion at quarter-end.

Outlook and guidance

• Management expressed optimism for continued momentum in the second half of the year, supported by a strong backlog and favorable market conditions for M&A and capital solutions.

• Expects robust restructuring activity due to ongoing credit market instability and complex balance sheets.

• Sees significant room for market share gains in the global mid-cap M&A space.