Houlihan Lokey (HLI) Q2 2025 earnings summary

Executive summary

• Revenues for the quarter ended September 30, 2024, reached $575 million, up 23% year-over-year, with adjusted EPS of $1.46 and net income up 40% to $94 million, reflecting strong performance across all business lines.

• All three business lines—Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory—showed strong momentum and growth, benefiting from improved M&A markets and robust restructuring activity.

• Operating income rose 45% to $130.7 million, driven by higher transaction fees and improved segment profitability.

• Cash flow from operations was $224.7 million for the six months ended September 30, 2024, supporting continued investment and shareholder returns.

• Management expressed confidence entering the second half of FY2025, citing momentum across all business lines and a diversified business model.

Financial highlights

• Corporate Finance revenues were $364 million, up 29% year-over-year, with 131 transactions closed.

• Financial Restructuring revenues were $132 million, up 15% year-over-year, with 33 transactions closed.

• Financial and Valuation Advisory revenues were $79 million, up 12% year-over-year, with 903 fee events.

• Adjusted compensation expenses were $354 million, with a compensation expense ratio of 61.5%.

• Cash and cash equivalents plus investment securities totaled $748 million as of September 30, 2024.

Outlook and guidance

• Management maintains a positive outlook for the second half of FY2025, expecting continued momentum across all business lines, but remains cautious due to macroeconomic and geopolitical risks.

• Corporate Finance expected to benefit from ongoing improvements in M&A markets, though transaction timelines remain longer than historical norms.

• Financial Restructuring activity anticipated to remain elevated into fiscal 2026.