Houlihan Lokey (HLI) investor relations material

Executive summary

• Revenues for the first quarter of fiscal 2027 were $511 million, down from $605 million year-over-year, with adjusted EPS of $1.35, reflecting a challenging environment in Corporate Finance due to macro headwinds and delays in large transactions.

• Financial and Valuation Advisory performed strongly, growing 13% year-over-year, while Financial Restructuring was in line with expectations; Corporate Finance revenues declined significantly.

• Delays in deal closings, especially for larger fee transactions, were attributed to persistent macro uncertainties, including the Middle East conflict and software sector disruptions.

• Despite near-term challenges, record levels in new business activity and backlog provide confidence in medium-term growth.

• A quarterly dividend of $0.70 per share was declared for the second quarter of fiscal 2027.

Financial highlights

• Revenues decreased 15.5% year-over-year to $511 million; Corporate Finance revenues were $303 million, down 24% year-over-year, with 127 transactions closed and lower average fees.

• Financial Restructuring revenues were $119 million, with 23 transactions closed (down 34% year-over-year), but higher average fees per deal.

• Financial and Valuation Advisory revenues grew 13% year-over-year to $89 million, with 1,042 fee events (up 9%).

• Adjusted compensation expense ratio held steady at 61.5% for the quarter; adjusted non-compensation expenses rose 6% to $100 million.

• Net income attributable to the company was $78 million, or $1.15 per diluted share, and adjusted net income was $91 million, or $1.35 per diluted share.

Outlook and guidance

• Management expects current headwinds to be temporary and not indicative of a cyclical downturn.

• Backlog, pipeline, and new mandate activity remain robust, supporting confidence in medium-term growth despite near-term volatility.

• Restructuring activity expected to remain elevated for the year, with potential upside if sector stress persists.

• Strong public market valuations and general economic health support optimism for improved performance later in the year.

• Adjusted effective tax rate for fiscal 2027 is projected between 26% and 28%.