HOULIHAN LOKEY, INC. has recently released its 10-Q report. The company is an investment banking firm that provides merger and acquisition advice, capital markets services, restructuring and liability management work, and financial and valuation advisory services. It operates through three segments: Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory, serving corporations, financial sponsors, and government agencies from its Los Angeles headquarters.
In Item 2, management said revenues for the three months ended June 30, 2026 fell to $511 million from $605 million a year earlier, a decline of 16%. Operating income decreased to $78 million from $90 million, while net income attributable to Houlihan Lokey fell to $78 million from $98 million.
The revenue decline was led by Corporate Finance, where revenue dropped 24% to $303 million from $398 million. Management tied that decline to a lower average transaction fee on closed deals, which it said reflected transaction mix rather than a short-term trend. Segment profit in Corporate Finance fell 30% to $89 million from $127 million.
Financial Restructuring revenue slipped 8% to $119 million from $128 million, mainly because fewer transactions closed during the quarter. That was partly offset by a higher average fee on closed transactions. Segment profit in the unit edged down to $42 million from $43 million.
Financial and Valuation Advisory was the only segment to post growth, with revenue rising 13% to $89 million from $79 million. Management said the increase came from more fee events, supported by stronger market demand across its service lines. Segment profit increased 34% to $23 million from $18 million.
Total operating expenses declined 16% to $433 million from $515 million. Compensation expense fell to $328 million from $393 million, and non-compensation expense dropped to $105 million from $122 million. The compensation ratio was 64.3%, compared with 64.9% in the prior-year quarter.
Other income, net was unchanged at $8 million. The company recorded an income tax provision of $8 million, compared with essentially no tax provision in the prior-year quarter, and said the higher effective tax rate reflected lower stock-based compensation deductions.
At the segment level, Corporate Finance had 260 managing directors, up from 244; Financial Restructuring had 58, unchanged; and Financial and Valuation Advisory had 47, up from 45. Closed transactions were 127 in Corporate Finance, 23 in Financial Restructuring, and 1,042 fee events in Financial and Valuation Advisory. Following these announcements, the company's shares moved -2.22%, and are now trading at a price of $125.49. Check out the company's full 10-Q submission here.
