Houlihan Lokey (HLI) Q1 2027 earnings summary

Executive summary

• Revenues for the quarter ended June 30, 2026, were $511 million, down 15.5%–16% year-over-year, mainly due to lower Corporate Finance revenues and delayed large transactions amid macro headwinds.

• Net income attributable to the company was $78 million, a 20% decrease compared to the same quarter last year; adjusted net income was $91 million, or $1.35 per diluted share.

• Financial and Valuation Advisory (FVA) performed strongly, with revenues up 13% year-over-year, while Financial Restructuring was stable but saw fewer transactions.

• Ongoing headwinds in Corporate Finance, including instability in the Middle East and technology sector disruptions, impacted results, but backlog and pipeline remain strong.

• A quarterly dividend of $0.70 per share was declared for the second quarter of fiscal 2027.

Financial highlights

• Corporate Finance revenues were $303 million, down 24% year-over-year, with 127 transactions closed and lower average fees.

• Financial Restructuring revenues were $119 million, down 8% year-over-year, with 23 transactions closed and higher average fees per deal.

• FVA revenues rose 13% year-over-year to $89 million, with 1,042 fee events (up 9%).

• Compensation expenses were $328 million (64.3% of revenues); adjusted compensation expenses were $314 million (61.5% of revenues).

• Non-compensation expenses were $105 million; adjusted non-compensation expenses were $100 million.

Outlook and guidance

• Management expects current headwinds to be temporary and not indicative of a cyclical downturn, with no fundamental reset of long-term outlook.

• Strong public market valuations and general economic health support optimism for improved performance later in the year.

• Full-year adjusted compensation expense ratio target remains at 61.5%; non-compensation expense growth expected to be similar to last year.

• Restructuring activity is expected to remain elevated, with potential for further increases if sector challenges persist.