– First Quarter Fiscal 2025 Revenues of $514 million –

– First Quarter Fiscal 2025 Diluted EPS of $1.30 –

– Adjusted First Quarter Fiscal 2025 Diluted EPS of $1.22 –

– Announces Dividend of $0.57 per Share for Second Quarter Fiscal 2025 –

LOS ANGELES and NEW YORK - July 30, 2024 - Houlihan Lokey, Inc. (NYSE:HLI) (“Houlihan Lokey” or the “Company”) today reported financial results for its first quarter ended June 30, 2024.

For the first quarter ended June 30, 2024, revenues were $514 million, compared with $416 million for the first quarter ended June 30, 2023. Net income was $89 million, or $1.30 per diluted share, for the first quarter ended June 30, 2024, compared with $61 million, or $0.90 per diluted share, for the first quarter ended June 30, 2023. Adjusted net income for the first quarter ended June 30, 2024 was $84 million, or $1.22 per diluted share, compared with $62 million, or $0.89 per diluted share, for the first quarter ended June 30, 2023.

“Our first quarter fiscal 2025 benefited primarily from improving M&A activity, with revenues up 24% versus the first quarter last year. Our Corporate Finance business had its strongest first quarter ever; our Financial Restructuring business had its second-strongest first quarter; and our Financial and Valuation Advisory business is seeing increased momentum in line with the market recovery. Although macro uncertainties still exist, we are optimistic about this fiscal year given continued improvements in M&A and capital markets activity,” stated Scott Adelson, Chief Executive Officer of Houlihan Lokey.

For the first quarter ended June 30, 2024, revenues were $514 million, compared with $416 million for the first quarter ended June 30, 2023. For the first quarter ended June 30, 2024, Corporate Finance (“CF”) revenues increased 45%, Financial Restructuring (“FR”) revenues decreased (5)%, and Financial and Valuation Advisory (“FVA”) revenues increased 4% when compared with the first quarter ended June 30, 2023.

The Company’s employee compensation and benefits expenses, non-compensation expenses, and provision for income taxes during the periods presented and described below are on a GAAP and an adjusted basis.

*Adjusted figures represent non-GAAP information. See “Non-GAAP Financial Measures” and the tables at the end of this release for an explanation of the adjustments and reconciliations to the comparable GAAP numbers.

(1)Calculated using the average of the number of full-time employees at the beginning of the reporting period and the end of the reporting period.

Employee compensation and benefits expenses were $330 million for the first quarter ended June 30, 2024, compared with $263 million for the first quarter ended June 30, 2023. Adjusted employee compensation and benefits expenses were $316 million for the first quarter ended June 30, 2024, compared with $256 million for the first quarter ended June 30, 2023. This resulted in an adjusted compensation ratio of 61.5% for both the first quarter ended June 30, 2024 and June 30, 2023. The increase in GAAP and adjusted employee compensation and benefits expenses was primarily a result of an increase in revenues for the quarter when compared with the same quarter last year.

Non-compensation expenses were $88 million for the first quarter ended June 30, 2024, compared with $79 million for the first quarter ended June 30, 2023. Adjusted non-compensation expenses were $80 million for the first quarter ended June 30, 2024, compared with $76 million for the first quarter ended June 30, 2023. The increase in GAAP and adjusted non-compensation expenses was primarily a result of increases in information technology and communications expenses and in travel, meals, and entertainment expenses.

The provision for income taxes was $11 million, representing an effective tax rate of 10.9%, for the first quarter ended June 30, 2024, compared with $15 million, representing an effective tax rate of 19.6%, for the first quarter ended June 30, 2023. The decrease in the Company's tax rate during the quarter ended June 30, 2024 relative to the quarter ended June 30, 2023 was primarily a result of increased stock compensation deductions. The adjusted provision for income taxes was $38 million, representing an adjusted effective tax rate of 31.2% for the first quarter ended June 30, 2024, compared with $25 million, representing an adjusted effective tax rate of 29.2% for the first quarter ended June 30, 2023.

CF revenues were $328 million for the first quarter ended June 30, 2024, compared with $227 million for the first quarter ended June 30, 2023, representing a increase of 45%. Revenues increased due to an increase in the number of closed transactions during the quarter, driven by favorable market conditions for M&A and capital markets transactions. Revenues also increased due to an increase in the average transaction fee on closed transactions. The increase in the average transaction fee on closed transactions was driven by transaction mix, and does not represent a trend in the average transaction fee on closed transactions.

FR revenues decreased (5)% to $117 million for the first quarter ended June 30, 2024, compared with $123 million for the first quarter ended June 30, 2023. Revenues decreased primarily due to a decrease in the average transaction fee on closed transactions and lower retainer fees relative to the same quarter last year, partially offset by an increase in the number of closed transactions. The decrease in average transaction fee on closed transactions was driven by transaction mix, and does not represent a trend in the average transaction fee on closed transactions.

FVA revenues increased 4% to $68 million for the first quarter ended June 30, 2024, compared with $65 million for the first quarter ended June 30, 2023. Revenues increased primarily due to a increase in the number of Fee Events. The increase in the number of Fee Events was driven by expanding our scope of work for existing clients for one or more of the service lines within our FVA business.

(1)A Fee Event includes any engagement that involves revenue activity during the measurement period based on a revenue minimum of one thousand dollars. References in this press release to closed transactions should be understood to be the same as transactions that are “effectively closed” as described in our periodic reports on Forms 10-K and 10-Q.

The Board of Directors of the Company declared a regular quarterly cash dividend of $0.57 per share of Class A and Class B common stock. The dividend will be payable on September 15, 2024, to stockholders of record as of the close of business on September 3, 2024.

As of June 30, 2024, the Company had $485 million of cash and cash equivalents and investment securities, and $33 million of other liabilities.

The Company will host a conference call and live webcast at 5:00 p.m. Eastern Time on Tuesday, July 30, 2024, to discuss its first quarter fiscal 2025 results. The number to call is 1-877-407-4018 (domestic) or 1-201-689-8471 (international). A live webcast will be available in the Investor Relations section of the Company’s website. A replay of the conference call will be available from July 30, 2024 through August 6, 2024, by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering the passcode 13747525. A replay of the webcast will be archived and available on the Company’s website.

This press release contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects,” and similar expressions that do not relate to historical matters. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond the Company’s control and could materially affect actual results, performance, or achievements. For a further description of such factors, you should read the Company’s filings with the Securities and Exchange Commission. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. The Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Adjusted net income, total and on a per share basis, and certain adjusted items used to determine adjusted net income, are presented and discussed in this earnings press release and are non-GAAP measures that management believes, when presented together with comparable GAAP measures, are useful to investors in understanding the Company’s operating results. The adjusted items included in this earnings press release as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these adjusted amounts are not a measurement of financial performance or liquidity under GAAP and should not be considered as an alternative to the Company’s financial information determined under GAAP. For a description of the Company’s use of these adjusted items and a reconciliation with comparable GAAP items, see the section of this press release titled “Reconciliation of GAAP to Adjusted Financial Information.” Please refer to our financial statements, prepared in accordance with GAAP, for purposes of evaluating our financial condition, results of operations, and cash flows.

Houlihan Lokey, Inc. (NYSE:HLI) is a global investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, and financial and valuation advisory. Houlihan Lokey serves corporations, institutions, and governments worldwide with offices in the Americas, Europe, the Middle East, and the Asia-Pacific region. Independent advice and intellectual rigor are hallmarks of the firm’s commitment to client success across its advisory services. The firm is the No. 1 investment bank for all global M&A transactions, the No. 1 M&A advisor for the past nine consecutive years in the U.S., the No. 1 global restructuring advisor for the past ten consecutive years, and the No. 1 global M&A fairness opinion advisor over the past 25 years, all based on number of transactions and according to data provided by LSEG.

For more information, please visit www.HL.com.

Condensed Consolidated Balance Sheets (Unaudited)

Condensed Consolidated Statements of Income (Unaudited)

Reconciliation of GAAP to Adjusted Financial Information (Unaudited)

(1)The aggregate of adjustments from employee compensation and benefits and non-compensation expenses.

(2)Reflects the tax impact of utilizing the adjusted effective tax rate on the non-tax adjustments identified above.

(3)Consists of all adjustments identified above net of the associated tax impact.