Houlihan Lokey(US:HLI)2025-11-04 21:38Financial 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]