Houlihan Lokey Files Q1 2025 10-Q

TL;DR

HLI's Q1 2025 10-Q is in - check financials for the latest performance.

AI Summary

Houlihan Lokey, Inc. filed its 10-Q for the period ending June 30, 2024. The filing covers the first fiscal quarter of 2025. Key financial data and operational details for this period are presented, reflecting the company's performance and financial position.

Why It Matters

This filing provides investors with a detailed look at Houlihan Lokey's financial health and operational performance during the first quarter of their fiscal year.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial disclosures.

Key Numbers

• Q1 2025 — Fiscal Quarter (Reporting period)
• 06/30/2024 — End of Reporting Period (Financial reporting date)
• 03/31/2025 — Fiscal Year End (Company's fiscal year end)

Key Players & Entities

• HOULIHAN LOKEY, INC. (company) — Filer
• 20240630 (date) — Period of Report
• 20240806 (date) — Filed as of Date
• 10250 CONSTELLATION BLVD., 5TH FLOOR (address) — Business and Mail Address
• LOS ANGELES (location) — City
• 310.553.8871 (phone_number) — Business Phone

FAQ

Key Financial Figures

• $0.001 — stered Class A Common Stock, par value $0.001 HLI New York Stock Exchange Indicate

Filing Documents

• hli-20240630.htm (10-Q) — 1027KB
• q1fy25-ex191.htm (EX-19.1) — 107KB
• q1fy25-ex311.htm (EX-31.1) — 10KB
• q1fy25-ex312.htm (EX-31.2) — 10KB
• q1fy25-ex321.htm (EX-32.1) — 5KB
• q1fy25-ex322.htm (EX-32.2) — 5KB
• 0001302215-24-000090.txt ( ) — 6748KB
• hli-20240630.xsd (EX-101.SCH) — 48KB
• hli-20240630_cal.xml (EX-101.CAL) — 66KB
• hli-20240630_def.xml (EX-101.DEF) — 212KB
• hli-20240630_lab.xml (EX-101.LAB) — 616KB
• hli-20240630_pre.xml (EX-101.PRE) — 427KB
• hli-20240630_htm.xml (XML) — 917KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements 1 Consolidated Balance Sheets 1 Consolidated Statements of Comprehensive Income 2 Consolidated Statements of Changes in Stockholders' Equity 3 Consolidated Statements of Cash Flows 4

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 23 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 29 Item 4.

Controls and Procedures

Controls and Procedures 31

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 31 Item 1A.

Risk Factors

Risk Factors 31 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 32 Item 3. Defaults Upon Senior Securities 32 Item 4. Mine Safety Disclosures 32 Item 5. Other Information 32 Item 6. Exhibits 33

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements HOULIHAN LOKEY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands, except share data and par value) June 30, 2024 March 31, 2024 Assets Cash and cash equivalents $ 449,697 $ 721,235 Restricted cash 619 619 Investment securities 35,622 38,005 Accounts receivable, net of allowance for credit losses of $ 9,856 and $ 8,767 , respectively 192,587 199,630 Unbilled work in progress, net of allowance for credit losses of $ 6,049 and $ 6,132 , respectively 156,023 192,012 Income taxes receivable 48,179 32,856 Deferred income taxes 80,607 90,064 Property and equipment, net 143,368 136,701 Operating lease right-of-use assets 362,222 344,024 Goodwill 1,175,370 1,127,497 Other intangible assets, net 198,707 197,439 Other assets 99,915 90,677 Total assets $ 2,942,916 $ 3,170,759 Liabilities and stockholders' equity Liabilities: Accrued salaries and bonuses $ 491,048 $ 726,031 Accounts payable and accrued expenses 110,114 114,171 Deferred income 36,647 33,139 Deferred income taxes 7,598 7,505 Operating lease liabilities 435,200 415,412 Other liabilities 32,831 37,751 Total liabilities 1,113,438 1,334,009 Commitments and contingencies (Note 17) Stockholders' equity: Class A common stock, $ 0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 53,053,499 and 52,348,511 shares, respectively 53 52 Class B common stock, $ 0.001 par value. Authorized 1,000,000,000 shares; issued and outstanding 16,456,793 and 16,746,676 shares, respectively 16 17 Additional paid-in capital 691,651 739,870 Retained earnings 1,207,328 1,163,419 Accumulated other comprehensive loss ( 69,570 ) ( 66,608 ) Total stockholders' equity 1,829,478 1,836,750 Total liabilities and stockholders' equity $ 2,942,916 $ 3,170,759 See accompanying Notes to Consolidated Financial Statements 1 HOULIHAN LOKEY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Thre

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share data or as otherwise stated) Note 1 — Background Houlihan Lokey, Inc. ("Houlihan Lokey," or "HL, Inc." also referred to as the "Company," "we," "our," or "us") is a Delaware corporation that controls the following primary subsidiaries: Houlihan Lokey Capital, Inc., a California corporation ("HL Capital, Inc."), is a wholly owned direct subsidiary of HL, Inc. HL Capital, Inc. is registered as a broker-dealer under Section 15(b) of the Securities Exchange Act of 1934 and a member of Financial Industry Regulatory Authority, Inc. Houlihan Lokey Financial Advisors, Inc., a California corporation ("HL FA, Inc."), is a wholly owned direct subsidiary of HL, Inc. Houlihan Lokey UK Limited, a private limited company registered in England ("HL UK Ltd."), is an indirect subsidiary of HL, Inc. HL UK Ltd. is regulated by the Financial Conduct Authority in the United Kingdom ("U.K."). The Company offers financial services and financial advice to a broad clientele through more than thirty offices in the United States of America, South America, Europe, the Middle East, and the Asia-Pacific region. The Company earns professional fees by providing focused services across the following three business segments: Corporate Finance ("CF") provides general financial advisory services and advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions, including financial sponsors, on a wide variety of matters, including buy-side and sell-side M&A transactions, debt and equity financings in both the private and public markets, and other corporate finance transactions. The majority of our CF revenues consists of fees paid upon the successful completion of the transaction or engagement ("Completion Fees"). A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the f

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) (In thousands, except share data or as otherwise stated) Note 2 — Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP"), pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"), and include all information and footnotes required for consolidated financial statement presentation. The results of operations for the three months ended June 30, 2024 are not necessarily indicative of the results of operations to be expected for the fiscal year ending March 31, 2025. The unaudited interim consolidated financial statements and notes to consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the "2024 Annual Report"). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries where it has a controlling financial interest. All intercompany balances and transactions have been eliminated. The Company carries its investments in unconsolidated entities over which it has significant influence but does not control using the equity method, and includes its ownership share of the income and losses in Other income, net in the Consolidated Statements of Comprehensive Income. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Management estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period, and disclosure of contingent assets and liabilities at the reporting date. These estimates and ass

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) (In thousands, except share data or as otherwise stated) Revenues from CF engagements primarily consist of fees generated in connection with advisory services related to mergers and acquisitions, capital markets, and other corporate finance transactions. Completion Fees from these engagements are recognized at a point in time when the related transaction has been effectively closed. At that time, the Company has transferred control of the promised service and the customer obtains control. CF contracts generally contain a variety of promised services that may be capable of being distinct, but they are not distinct within the context of the engagement as the various services are inputs to the combined output of successfully brokering a specific transaction. Completion Fees, Retainer Fees, and Progress Fees from these engagements are considered variable and constrained until the corresponding transaction has been effectively closed as they are contingent upon a future event, which includes factors outside of our control (e.g., completion of a transaction or regulatory approval). Revenues from FR engagements primarily consist of fees generated in connection with advisory services to debtors, creditors and other parties-in-interest involving recapitalization or deleveraging transactions implemented both through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. Retainer Fees and Progress Fees from restructuring engagements are recognized over time using a time elapsed measure of progress as our clients simultaneously receive and consume the benefits of those services as they are provided. Completion Fees from these engagements are recognized at a point in time when the related transaction has been effectively closed. At that time, the Company has transferred control of the prom

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) (In thousands, except share data or as otherwise stated) Fair Value Measurements The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels in accordance with Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurement : Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. For Level 3 investments in which pricing inputs are unobservable and limited market activity exists, management's determination of fair value is based upon the best information available, and may incorporate management's own assumptions or involve a significant degree of judgment. The following methods and assumptions were used by the Company in estimating fair value disclosures: Corporate debt securities: All fair value measurements are obtained from a third-party pricing service and are not adjusted by management. U.S. treasury securities: Fair values f

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