Houlihan Lokey Revenue Rises as M&A Advisory Strengthens, Restructuring Slips

Houlihan Lokey said on Wednesday that its M&A advisory business picked up speed in its fiscal second quarter, lifting total revenue even as fewer restructuring deals crossed the finish line.

The Los Angeles-based investment bank reported revenue of $692 million for the quarter ended Sept. 30, up from $660 million a year earlier, according to the earnings release it filed with an 8-K on Wednesday. Net income attributable to the company was $109 million, or $1.64 per diluted share, compared with $111 million, or $1.63 a share, a year ago.

Adjusted net income was $124 million, or $1.85 per diluted share, versus $127 million, or $1.84 a share, in the prior-year quarter.

A better backdrop for deals

"Improving market conditions resulted in a stronger second quarter," CEO Scott Adelson said in the release. "While we remain cautious due to the volatility of external factors, we expect to see solid performance across our businesses for the remainder of the year."

The quarter marked a turn from a softer start to the fiscal year. For the six months ended Sept. 30, revenue was $1.203 billion, compared with $1.265 billion a year earlier, and diluted EPS was $2.78 versus $3.04.

Corporate Finance leads

Corporate Finance, the firm's largest segment, grew revenue 10% to $481 million from $439 million. The company attributed the gain to a higher average fee on closed transactions, driven by deal mix and improved conditions for M&A and capital markets work.

That came despite fewer closed deals. Corporate Finance closed 142 transactions in the quarter, down from 171 a year earlier, a decline the company said it does not believe represents a trend. The segment's managing director headcount rose to 267 from 242.

Financial Restructuring revenue fell 12% to $118 million from $134 million, as closed transactions dropped to 27 from 37. Houlihan Lokey blamed the timing of closings, partly offset by a higher average fee.

Financial and Valuation Advisory revenue rose 7% to $93 million, which the company credited to growth in its non-cyclical businesses.

Costs and margins

Compensation expenses rose to $441 million from $423 million, but the compensation ratio eased to 63.7% of revenue from 64.2%. On an adjusted basis, the compensation ratio held at 61.5%.

Non-compensation expenses climbed to $97 million from $86 million, which the company tied mainly to higher rent and other operating costs. The effective tax rate was 30.6%, versus 30.2% a year earlier.

Dividend and buybacks

The board declared a regular quarterly cash dividend of $0.70 per share, payable Dec. 15 to holders of record on Dec. 1. Houlihan Lokey also repurchased 397,000 shares during the quarter under its buyback program.

The company ended September with $888 million of cash, cash equivalents and investment securities.

Sources

1. Houlihan Lokey Form 8-K with second-quarter fiscal 2027 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0001302215-26-000071)

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