Core Insights - Stephen Pollock has joined Houlihan Lokey's Capital Solutions Group as a Managing Director in Equity Capital Solutions [1] Company Overview - Houlihan Lokey's Capital Solutions Group is expanding its leadership team with the addition of Stephen Pollock [1] - Pollock will be based in New York, indicating a strategic focus on the East Coast market [1]

Financial Performance - Revenues for Q3 2025 were $659.5 million, a 15% increase from $575.0 million in Q3 2024[94] - Net income for Q3 2025 was $111.8 million, a 19% increase from $93.5 million in Q3 2024[94] - Revenues for the six months ended September 30, 2025, were $1.26 billion, a 16% increase from $1.09 billion in the same period of 2024[99] - Net income for the six months ended September 30, 2025, was $209.3 million, a 15% increase from $182.5 million in 2024[128] - Total revenues for the six months ended September 30, 2025, were $1,264.8 million, representing a 16% increase compared to $1,088.6 million for the same period in 2024[1] Operating Expenses - Total operating expenses for Q3 2025 were $508.1 million, up 14% from $444.3 million in Q3 2024[96] - Total operating expenses for the six months ended September 30, 2025, were $1,023.7 million, up 19% from $863.2 million in the same period of 2024[100] - Compensation expenses in Q3 2025 were $423.2 million, reflecting a 17% increase compared to $360.6 million in Q3 2024[96] - Compensation expenses for the six months ended September 30, 2025, were $816.0 million, an 18% increase from $690.8 million in the same period of 2024[100] - Corporate expenses increased by 21% to $71.5 million for the three months ended September 30, 2025, compared to $59.3 million for the same period in 2024[119] Profitability Metrics - The Compensation Ratio for Q3 2025 was 64.2%, compared to 62.7% in Q3 2024[96] - Total segment profit for the six months ended September 30, 2025, was $410.6 million, an 18% increase compared to $347.2 million for the same period in 2024[1] - Segment profit for Corporate Finance rose by 34% to $147.3 million for the three months ended September 30, 2025, compared to $109.7 million for the same period in 2024[108] - Segment profit for Financial Restructuring decreased by 18% to $50.1 million for the three months ended September 30, 2025, compared to $60.9 million for the same period in 2024[112] - Segment profit for Financial and Valuation Advisory increased by 31% to $25.4 million for the three months ended September 30, 2025, compared to $19.4 million for the same period in 2024[116] Tax and Other Income - The effective tax rate for Q3 2025 was 30.2%, down from 31.3% in Q3 2024[98] - Other (income) expense, net for Q3 2025 was $(8.7) million, compared to $(5.4) million in Q3 2024, primarily due to higher interest income[97] Cash Flow and Investments - Operating cash flows provided $193.4 million, down 14% from $224.7 million in the same period of 2024[129][130] - Investing activities resulted in a net outflow of $4.6 million, significantly reduced by 94% compared to $71.3 million in 2024[129][130] - Financing activities showed a net outflow of $268.8 million, an increase of 34% from $200.6 million in 2024, primarily due to employee tax obligations and dividends[129][130] - Cash, cash equivalents, and restricted cash at the end of the period totaled $928.4 million, a 34% increase from $692.9 million in 2024[128] Foreign Currency Impact - The company experienced an 80% increase in the effects of exchange rate changes on cash, from $18.2 million in 2024 to $32.8 million in 2025[128] - The net impact of foreign currency fluctuations on other comprehensive income was $34.3 million for the six months ended September 30, 2025, compared to $28.4 million in 2024[139] - A hypothetical 10% depreciation in the U.S. Dollar would have resulted in an increase in other comprehensive income of approximately $103 million for the six months ended September 30, 2025[139] - The company had no open foreign currency forward contracts as of September 30, 2025, compared to two contracts with a notional value of $37.0 million in 2024[141] Accounting Policies - There were no significant changes to critical accounting policies and estimates during the reporting period[133]

Group 1 - Houlihan Lokey, Inc. has announced the appointment of Marco Voci as a Managing Director in the global Consumer Group [1] - Marco Voci will focus on the active lifestyle, branded consumer products, and luxury goods sectors across Europe, the Middle East, and Africa (EMEA) [1] - He will collaborate closely with Alexander Grünwald, Managing Director and Global Co-Head of the Consumer Group, who leads the firm's Luxury Goods team [1]

Core Insights - JP Morgan and Houlihan Lokey ranked first in two league tables for M&A activity in the consumer sector during the first nine months of the year, according to GlobalData [1] - Morgan Stanley led in transaction value, advising on deals worth a cumulative $30.56 billion, while Houlihan Lokey advised on the highest number of deals, totaling 22 [1][2] - In the first nine months of 2024, Houlihan Lokey advised on 25 transactions, maintaining its leadership position in deal volume despite a year-on-year decline in the total number of deals [3] Transaction Details - Morgan Stanley was involved in Keurig Dr Pepper's acquisition of JDE Peet's for €15.7 billion ($18.36 billion) and the subsequent split of the combined business [2] - Houlihan Lokey's advisory work primarily focused on food transactions, including Kraft Heinz's asset sale in Italy [2] Competitor Rankings - Bank of America ranked second in deal value, advising on transactions worth $28.51 billion, followed by Lazard with $27.83 billion from 12 deals, JP Morgan with $11.08 billion, and Goldman Sachs with $10.82 billion [4] - In terms of deal volume, Spayne Lindsay led with 16 transactions, followed by Rothschild & Co. with 14, Deloitte with 13, and both Bank of America and Lazard with 12 [4] Data Source and Methodology - GlobalData's league tables are based on real-time tracking of company and advisory firm websites, with a team of analysts gathering detailed information on each deal [5]

Core Insights - Houlihan Lokey has become one of Wall Street's busiest investment banks by deal volume, with CEO Scott Adelson highlighting the firm's unexpected growth and success in the investment banking sector [1][4]. Company Overview - Scott Adelson, who has been with Houlihan Lokey since 1987, was appointed CEO last year after serving as copresident and global cohead of corporate finance [3]. - The firm has evolved from its initial focus on restructuring and bankruptcy to handling a diverse range of transactions, including advising on the sale of Color Wow to L'Oréal [4]. Financial Performance - In the second quarter of the 2026 fiscal year, Houlihan Lokey reported revenues of $659 million, a 15% increase compared to the same quarter last year [6]. - Corporate finance revenues reached nearly $439 million, up 17% year-over-year, while financial and valuation advisory services generated $87 million, reflecting a nearly 10% increase [6]. Market Position - Houlihan Lokey is recognized as the top M&A advisor by volume in 2025, having successfully navigated a competitive landscape by hiring senior dealmakers while rivals have reduced their workforce [8]. - The firm has focused on the middle-market segment, typically involving deals valued around $1 billion and under, where it has seen significant deal flow despite larger banks handling higher-value transactions [5]. Industry Trends - The investment banking sector is experiencing a rebound in dealmaking activity, attributed to a steadier rate environment, lighter regulation, and optimism surrounding AI and technology [7]. - Adelson emphasizes that the current capital market conditions are favorable, with abundant capital leading to increased confidence in dealmaking [7].

Core Insights - The article discusses the rise of "directs" in private equity, a model where investors select individual companies rather than investing in pooled funds, driven by the increasing wealth of family offices [2][6][31] - Matt Swain, CEO of Triago, has been pivotal in transforming the directs sector into a significant business, raising substantial capital and attracting attention from major investment firms [5][12][30] Company Overview - Triago, under Swain's leadership, has become a leader in the directs space, raising $3 billion in equity capital for 35 deals, which supported over $10 billion in purchases [12][30] - Houlihan Lokey, a mid-tier investment bank, acquired Triago and has since leveraged its resources to enhance the directs model, aiming to expand into new areas like continuation vehicles and co-investments [23][24][30] Market Dynamics - The directs market is projected to grow significantly, with estimates suggesting it could reach around $200 billion this year, a substantial increase from previous years [6][30] - Institutional investors, including pension funds, are beginning to show interest in directs, indicating a potential shift in investment strategies towards more direct equity investments [31][32] Investment Strategy - The directs model offers higher potential returns compared to traditional private equity, with investors seeking returns of 3x or more, contrasting with the typical 2x returns from conventional PE funds [13][31] - Directs sponsors typically do not charge fees unless they achieve significant returns, aligning their interests closely with those of their investors [14][19] Competitive Landscape - While the directs model is gaining traction, it still faces challenges in achieving mass adoption among traditional private equity investors, who prefer pooled investments for quicker capital deployment [7][31] - The success of the directs model has attracted competition, which could lead to increased prices and reduced profit margins for existing players [7][30] Future Outlook - Swain envisions a future where directs will revolutionize private equity, making it more liquid and accessible, akin to public markets [31][32] - The increasing interest from large pension funds in directs co-investments indicates a growing acceptance of this model within institutional investment strategies [32]

Core Insights - Houlihan Lokey (HLI) reported revenue of $659.45 million for the quarter ended September 2025, marking a year-over-year increase of 14.7% and exceeding the Zacks Consensus Estimate of $654.33 million by 0.78% [1] - The company's EPS for the same period was $1.84, up from $1.46 a year ago, and also surpassed the consensus EPS estimate of $1.69 by 8.88% [1] Financial Performance Metrics - The number of managing directors in Corporate Finance was 242, below the average estimate of 251 by two analysts [4] - The number of managing directors in Financial and Valuation Advisory matched the average estimate of 45 [4] - The number of managing directors in Financial Restructuring was 58, slightly below the average estimate of 59 [4] - Revenue from Corporate Finance was $438.66 million, slightly above the average estimate of $437.22 million [4] - Revenue from Financial Advisory Services was $86.99 million, exceeding the average estimate of $84.42 million [4] - Revenue from Financial Restructuring was $133.8 million, also above the average estimate of $132.69 million [4] Stock Performance - Shares of Houlihan Lokey have returned -1.2% over the past month, while the Zacks S&P 500 composite has changed by +3.6% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Performance - Revenues for the second quarter of fiscal 2026 were $659 million, a 14.6% increase from $575 million in the same quarter of fiscal 2025[2] - Diluted EPS for the second quarter of fiscal 2026 was $1.63, compared to $1.37 for the same quarter last year, representing an increase of 19%[2] - Adjusted diluted EPS for the second quarter of fiscal 2026 was $1.84, up from $1.46 in the prior year, reflecting a 26% increase[2] - Revenues for the three months ended September 30, 2025, increased to $659,452,000, up 14.7% from $574,957,000 in the same period of 2024[30] - Net income for the six months ended September 30, 2025, was $209,314,000, representing a 14.7% increase compared to $182,489,000 for the same period in 2024[30] - Adjusted net income for the three months ended September 30, 2025, was $126,765,000, compared to $100,288,000 in 2024, reflecting a 26.4% increase[31] - Operating income for the three months ended September 30, 2025, was $151,341,000, an increase of 15.8% from $130,669,000 in the same period of 2024[30] - Earnings per share (fully diluted) for the three months ended September 30, 2025, was $1.63, compared to $1.37 in 2024, marking an increase of 19.0%[30] Revenue Breakdown - Corporate Finance revenues increased by 21% to $439 million, driven by a higher number of closed transactions[13] - Financial Restructuring revenues rose by 2% to $134 million, attributed to favorable market conditions for restructuring transactions[15] - Financial and Valuation Advisory revenues grew by 10% to $87 million, supported by an increase in Fee Events in the M&A markets[17] Expenses and Liabilities - Compensation expenses for the second quarter were $423 million, representing 64.2% of revenues, up from 62.7% in the prior year[10] - The company reported an increase in employee compensation and benefits to $405,562,000 for the three months ended September 30, 2025, up from $353,599,000 in 2024, reflecting a 14.7% rise[30] - Total liabilities decreased to $1,546,473,000 as of September 30, 2025, from $1,644,831,000 as of March 31, 2025, indicating a reduction of approximately 5.9%[28] Cash and Assets - As of September 30, 2025, the company had $1.11 billion in unrestricted cash and cash equivalents[20] - Total assets as of September 30, 2025, were $3,793,365,000, a slight decrease from $3,819,708,000 as of March 31, 2025[28] - Goodwill increased to $1,292,121,000 as of September 30, 2025, from $1,284,589,000 as of March 31, 2025, showing a growth of 0.6%[28] Dividends and Tax - The effective tax rate for the second quarter was 30.2%, compared to 31.3% in the same quarter last year[12] - The company declared a quarterly cash dividend of $0.60 per share, payable on December 15, 2025[20] Market Position - The company has been recognized as the No. 1 investment bank for all global M&A transactions for the past two years, highlighting its strong market position[24]

Core Insights - Houlihan Lokey (HLI) reported quarterly earnings of $1.84 per share, exceeding the Zacks Consensus Estimate of $1.69 per share, and showing an increase from $1.46 per share a year ago, resulting in an earnings surprise of +8.88% [1] - The company achieved revenues of $659.45 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.78% and up from $574.96 million year-over-year [2] - Houlihan Lokey has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The sustainability of Houlihan Lokey's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.87, with projected revenues of $714.37 million, and for the current fiscal year, the EPS estimate is $7.64 on revenues of $2.7 billion [7] Industry Context - The Financial - Miscellaneous Services industry, to which Houlihan Lokey belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook for stocks in this sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5][6]