HOULIHAN LOKEY, INC. has recently released its 10-Q report. The company is an investment banking firm that advises on mergers and acquisitions, capital markets, financial restructurings, liability management, and valuation-related matters. Its work is organized into 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 the quarter’s results should be read alongside the financial statements and noted that its discussion includes forward-looking statements tied to assumptions, risks, and uncertainties. The company said revenues are recognized when performance obligations are satisfied and that advisory fees generally come in the form of retainers, progress fees, or completion fees, depending on the engagement. It also said operating expenses are driven mainly by revenue and headcount, with compensation as the largest cost category.
For the three months ended June 30, 2026, Houlihan Lokey reported revenues of $511 million, down 16% from $605 million a year earlier. Operating expenses fell 16% to $433 million from $515 million, leaving operating income at $78 million, down 13% from $90 million. Net income attributable to Houlihan Lokey was $78 million, compared with $98 million in the prior-year quarter, a decline of 20%.
Compensation expense dropped to $328 million from $393 million, while non-compensation expense fell to $105 million from $122 million. The company’s compensation ratio was 64.3%, compared with 64.9% a year earlier. Other income, net was unchanged at $8 million, and the income tax provision rose to $8 million from $0, reflecting a 10% effective tax rate versus 1% last year.
By segment, Corporate Finance generated $303 million of revenue, down 24% from $398 million, and segment profit fell 30% to $89 million from $127 million. Financial Restructuring brought in $119 million, down 8% from $128 million, with segment profit slipping to $42 million from $43 million. Financial and Valuation Advisory revenue increased 13% to $89 million from $79 million, and segment profit rose to $23 million from $18 million.
The company said the decline in Corporate Finance revenue was driven by a lower average transaction fee on closed deals, tied to transaction mix. In Financial Restructuring, lower transaction volume was the main reason for the revenue decline, partly offset by a higher average fee per closed transaction. In Financial and Valuation Advisory, the increase came from more Fee Events, which the company said reflected stronger market demand across service lines.
At quarter-end, Houlihan Lokey had 260 Managing Directors in Corporate Finance, 58 in Financial Restructuring, and 47 in Financial and Valuation Advisory. It recorded 127 closed transactions in Corporate Finance, 23 in Financial Restructuring, and 1,042 Fee Events in Financial and Valuation Advisory. As a result of these announcements, the company's shares have moved -2.22% on the market, and are now trading at a price of $125.49. If you want to know more, read the company's complete 10-Q report here.
