Q3 2026 Houlihan Lokey Inc Earnings Call

January 28, 2026

Speaker #1: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Houlihan Lokey's third quarter fiscal year 2026 earnings conference call. At this time, all participants are in a listen-only mode.

Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Houlihan Lokey’s Third Quarter Fiscal Year 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, 28 January 2026. I will now turn the call over to the company.

Speaker #1: A question and answer session will follow the formal presentation. Please note that this conference call is being recorded today. January 28th, 2026. I will now turn the call over to

Speaker #1: the company. Thank

Speaker #2: You, Operator, and hello everyone. By now, everyone should have access to our third quarter fiscal year 2026 earnings release, which can be found on the Houlihan Lokey website at www.hl.com in the Investor Relations section.

Christopher Crain: Thank you, operator, and hello, everyone. By now, everyone should have access to our Q3 fiscal year 2026 earnings release, which can be found on the Houlihan Lokey website at www.hl.com in the Investor Relations section. Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements. These forward-looking statements, which are usually identified by use of words such as will, expect, anticipate, should, or other similar phrases, are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore, you should exercise caution when interpreting and relying on them. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition.

Q3 2026 Houlihan Lokey Inc Earnings Call

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Houlihan Lokey

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Q3 2026 Houlihan Lokey Inc Earnings Call

HLI

Wednesday, January 28th, 2026 at 10:00 PM

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Speaker #2: Before we begin, our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements. These forward-looking statements are usually identified by use of words such as "will," "expect," "anticipate," "should," or other similar phrases are not guarantees of future performance.

Speaker #2: subject to numerous risks and These statements are uncertainties that could cause actual results to differ materially from what we expect, and therefore you should exercise caution when interpreting and relying on them.

Speaker #2: recent SEC filings for a We refer all of you to our more detailed discussion of the risks that could impact our future operating results and financial condition.

Speaker #2: We encourage investors to review our regulatory filings including the Form 10Q for the quarter ended December 2025, when it is filed with the 31, SEC.

Christopher Crain: We encourage investors to review our regulatory filings, including the Form 10-Q for the quarter ended 31 December 2025, when it is filed with the SEC. During today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings release and our investor presentation on the HL.com website. Hosting the call today, we have Scott Adelson, Houlihan Lokey's Chief Executive Officer, and Lindsey Alley, Chief Financial Officer. They will provide some opening remarks, and then we will open the call to questions. With that, I'll turn the call over to Scott.

We encourage investors to review our regulatory filings, including the Form 10-Q for the quarter ended 31st December 2025, when it is filed with the SEC. During today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings release and our investor presentation on the HL.com website. Hosting the call today, we have Scott Adelson, Houlihan Lokey's Chief Executive Officer, and Lindsey Alley, Chief Financial Officer. They will provide some opening remarks, and then we will open the call to questions. With that, I'll turn the call over to Scott.

Speaker #2: call, we will discuss non-GAAP During today's financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

Speaker #2: Measures, to the most directly comparable GAAP measures, are available in our earnings release and our investor presentation on the HL.com website.

Speaker #2: Hosting the call today, we have Scott Adelson, HOULIHAN LOKEY'S Chief Executive Officer, and Lindsey Alley, Chief Financial Officer. They will provide some opening remarks and questions.

Speaker #2: With that, I'll turn the call over to

Speaker #2: Scott.

Scott Adelson: Thank you, Christopher. Welcome everyone to our Q3 fiscal 2026 earnings call. We ended the quarter with revenues of $717 million and adjusted earnings per share of $1.94. Revenues were up 13% and adjusted earnings per share were up 18% compared to the same period last year. We are pleased with our results for the quarter as well as our performance year to date. We continue to benefit from improving investor sentiment, partially fueled by stronger company performance and expectations of declining interest rates, both of which should continue to further the M&A recovery. As a result, private equity activity has accelerated, with an increasing number of portfolio companies choosing to explore liquidity.

Scott Adelson: Thank you, Christopher. Welcome everyone to our Q3 fiscal 2026 earnings call. We ended the quarter with revenues of $717 million and adjusted earnings per share of $1.94. Revenues were up 13% and adjusted earnings per share were up 18% compared to the same period last year. We are pleased with our results for the quarter as well as our performance year-to-date. We continue to benefit from improving investor sentiment, partially fueled by stronger company performance and expectations of declining interest rates, both of which should continue to further the M&A recovery. As a result, private equity activity has accelerated, with an increasing number of portfolio companies choosing to explore liquidity.

Speaker #3: Christopher: Welcome, everyone, to our third earnings call. We ended the quarter with fiscal 2026 Q3 revenues of $717,000 and adjusted earnings per share of $1.94.

Speaker #3: Revenues were up 13% and adjusted earnings per share were up 18% compared to the same period last year. We are pleased with our results for the quarter, as well as our performance year to date.

Speaker #3: We continue to benefit from improving investor sentiment, partially fueled by stronger company performance and expectations of declining interest rates, both of which should continue to further the M&A recovery.

Speaker #3: As a result, private equity activity has accelerated, with an increasing number of portfolio companies choosing to explore liquidity. Looking at each of our businesses, corporate finance produced $474 million of revenue for the quarter, representing a 12% increase over last year's third quarter.

Scott Adelson: Looking at each of our businesses, Corporate Finance produced $474 million of revenue for the quarter, representing a 12% increase over last year's third quarter. Both average fee and new business activity continue to move upward. We enter our last fiscal quarter with positive inflection in the activity levels that increase our optimism for our fiscal year 2027. While we have anticipated and reported consistent progress in Corporate Finance throughout the year, our current visibility into both deal activity and backlog gives us more confidence in fiscal 2027 compared to our assessment a quarter ago. Financial Restructuring produced $156 million of revenue for the third quarter, a 19% increase versus the same period last year. We performed better than anticipated during the quarter due to accelerated transaction timelines that moved several of our deals forward into the third quarter.

Looking at each of our businesses, Corporate Finance produced $474 million of revenue for the quarter, representing a 12% increase over last year's third quarter. Both average fee and new business activity continue to move upward. We enter our last fiscal quarter with positive inflection in the activity levels that increase our optimism for our fiscal year 2027. While we have anticipated and reported consistent progress in Corporate Finance throughout the year, our current visibility into both deal activity and backlog gives us more confidence in fiscal 2027 compared to our assessment a quarter ago. Financial Restructuring produced $156 million of revenue for the third quarter, a 19% increase versus the same period last year. We performed better than anticipated during the quarter due to accelerated transaction timelines that moved several of our deals forward into the third quarter.

Speaker #3: Both average fee and new business activity continue to move upward. We enter our last fiscal quarter with positive inflection in the activity levels, which increases our optimism for our fiscal year 2027.

Speaker #3: While we have anticipated and reported consistent progress in corporate finance throughout the year, our current visibility into both deal activity and backlog gives us more confidence in fiscal 2027 compared to our assessment a quarter ago.

Speaker #3: Financial restructuring produced $156,000,000 of revenue for the third quarter, a 19% increase versus the same period last year. We performed better than anticipated during the quarter, due to accelerated transaction timelines, that moved several of our deals forward into the third quarter.

Speaker #3: Accordingly, we expect our third quarter restructuring results to be stronger than our fourth quarter results, reversing our typical seasonal pattern. Looking ahead to fiscal 2027, we expect restructuring to face some revenue pressures as it adjusts to the environment.

Scott Adelson: Accordingly, we expect our third quarter restructuring results to be stronger than our fourth quarter results, reversing our typical seasonal pattern. Looking ahead to fiscal 2027, we expect restructuring to face some revenue pressures as it adjusts to an improving market environment. That said, recent geopolitical events introduce a new variable that could potentially drive restructuring activity levels higher. Financial and Valuation Advisory produced $87 million of revenue for the third quarter, a 6% increase versus the third quarter last year. Like Corporate Finance, this business continues to benefit from an improving M&A climate and continued strong capital markets, with solid new business generation heading into our fourth quarter. We hired six new managing directors in the third quarter, and in early January, we closed the acquisition of the real estate advisory business of Mellum Capital, bolstering our Capital Solutions capabilities.

Accordingly, we expect our third quarter restructuring results to be stronger than our fourth quarter results, reversing our typical seasonal pattern. Looking ahead to fiscal 2027, we expect restructuring to face some revenue pressures as it adjusts to an improving market environment. That said, recent geopolitical events introduce a new variable that could potentially drive restructuring activity levels higher. Financial and Valuation Advisory produced $87 million of revenue for the third quarter, a 6% increase versus the third quarter last year. Like Corporate Finance, this business continues to benefit from an improving M&A climate and continued strong capital markets, with solid new business generation heading into our fourth quarter. We hired six new managing directors in the third quarter, and in early January, we closed the acquisition of the real estate advisory business of Mellum Capital, bolstering our Capital Solutions capabilities.

Speaker #3: That said, recent improving market geopolitical events introduced a new variable that could potentially drive restructuring activity levels higher. Financial and Valuation Advisory produced $87 million of revenue for the third quarter, a 6% increase versus the third quarter last year.

Speaker #3: Like Corporate Finance, this business continues to benefit from an improving M&A climate and continued strong capital markets. With solid new business generation heading into our fourth quarter, we hired six new managing directors in the third quarter.

Speaker #3: And in early January, we closed the acquisition of the real estate advisory business of Mellon Capital, bolstering our capital solutions capabilities. We gained 11 new colleagues between Munich and London, and our new partners are off to a great start.

Scott Adelson: We gained 11 new colleagues between Munich and London, and our new partners are off to a great start. In addition, last week, we announced an agreement for a controlling interest in Audere Partners, a prominent French corporate finance firm. The deal will significantly enhance our footprint in France to around 80 colleagues, making it one of our largest offices in Europe. This transaction is expected to close in our Q4. We are thrilled with these transactions, which reflect our commitment to build our capabilities in the right places, at the right time, and most importantly, with the right partners. Our culture grows even stronger when we welcome new colleagues with the same vision and commitment to our clients' success. These two deals continue to strengthen our business in Europe, which, as we have said before, has the potential to be the size of our US corporate finance business.

We gained 11 new colleagues between Munich and London, and our new partners are off to a great start. In addition, last week, we announced an agreement for a controlling interest in Audere Partners, a prominent French corporate finance firm. The deal will significantly enhance our footprint in France to around 80 colleagues, making it one of our largest offices in Europe. This transaction is expected to close in our Q4. We are thrilled with these transactions, which reflect our commitment to build our capabilities in the right places, at the right time, and most importantly, with the right partners. Our culture grows even stronger when we welcome new colleagues with the same vision and commitment to our clients' success. These two deals continue to strengthen our business in Europe, which, as we have said before, has the potential to be the size of our US corporate finance business.

Speaker #3: In addition, last week, we announced an agreement for a controlling interest in Audere Partners, a prominent French corporate finance firm. The deal will significantly enhance our footprint in France to around 80 colleagues, making it one of our largest offices in Europe.

Speaker #3: This transaction is expected to close in our fourth quarter. We are thrilled with these transactions, which reflect our commitment to build our capabilities in the right places at the right time and, most importantly, with the right partners.

Speaker #3: Our culture grows even stronger when we welcome new colleagues with the same vision and commitment to our clients' success. These two deals continue to strengthen our business in Europe, which, as we have said before, has the potential to be the size of our U.S.

Speaker #3: corporate finance business. Finally, as we look back at 2025, we are honored once again to be the number one most active M&A investment bank in the world, and also once again the number one most active financial restructuring investment bank in the world.

Scott Adelson: Finally, as we look back at 2025, we are honored once again to be the number one most active M&A investment bank in the world, and also, once again, the number one most active Financial Restructuring investment bank in the world. We congratulate our colleagues around the globe for the dedication that produced these distinctions. As we look beyond our fiscal Q4, our outlook for the future is positive. The expansion of our workforce across geography, industry, and product will continue. Our relentless focus on independent, high-quality advice to our clients will continue, and our drive to create value for our shareholders will continue. We thank our employees for their commitment and our shareholders for their support. With that, I will turn it over to Lindsey.

Finally, as we look back at 2025, we are honored once again to be the number one most active M&A investment bank in the world, and also, once again, the number one most active Financial Restructuring investment bank in the world. We congratulate our colleagues around the globe for the dedication that produced these distinctions. As we look beyond our fiscal Q4, our outlook for the future is positive. The expansion of our workforce across geography, industry, and product will continue. Our relentless focus on independent, high-quality advice to our clients will continue, and our drive to create value for our shareholders will continue. We thank our employees for their commitment and our shareholders for their support. With that, I will turn it over to Lindsey.

Speaker #3: We congratulate our colleagues around the globe for the dedication that produced these distinctions. As we look beyond our fiscal fourth quarter, our outlook for the future is positive.

Speaker #3: The expansion of our workforce across geography, industry, and product will continue. Our relentless focus on independent, high-quality advice to our clients will continue. And our drive to create value for our shareholders will continue.

Speaker #3: We thank our employees for their commitment and our shareholders for their support. And with that, I will turn it over to Lindsey.

Speaker #1: Thank you, Scott. Revenues and corporate finance were $474,000,000 for the quarter. Up 12% compared to the same period last year. It closed $177 transactions this quarter, up from $170,000 in the same period last year, and our average transaction fee on closed deals increased.

Lindsey Alley: Thank you, Scott. Revenues in Corporate Finance were $474 million for the quarter, up 12% compared to the same period last year. We closed 177 transactions this quarter, up from 170 in the same period last year, and our average transaction fee on closed deals increased. Financial Restructuring revenues were $156 million for the quarter, a 19% increase versus the same period last year. We closed 41 transactions this quarter, consistent with the same quarter last year, and our average transaction fee on closed deals increased. We benefited from the closing of several transactions that were expected to close in our fiscal Q4, resulting in our second strongest Q3 ever.

James Alley: Thank you, Scott. Revenues in Corporate Finance were $474 million for the quarter, up 12% compared to the same period last year. We closed 177 transactions this quarter, up from 170 in the same period last year, and our average transaction fee on closed deals increased. Financial Restructuring revenues were $156 million for the quarter, a 19% increase versus the same period last year. We closed 41 transactions this quarter, consistent with the same quarter last year, and our average transaction fee on closed deals increased. We benefited from the closing of several transactions that were expected to close in our fiscal Q4, resulting in our second strongest Q3 ever.

Speaker #1: Financial restructuring revenues were $156,000,000 for the quarter. A 19% increase versus the same period last year. We closed $41 transactions this quarter, consistent with the same quarter last year, and our average transaction fee on closed deals increased.

Speaker #1: We benefited from the closing of several transactions that were expected to close in our fiscal fourth quarter, resulting in our second strongest third quarter ever.

Speaker #1: As a result, we expect that our fourth quarter will look more like the first two quarters of our fiscal year, and won't have the same typical seasonality associated with that quarter.

Lindsey Alley: As a result, we expect that our fourth quarter will look more like the first two quarters of our fiscal year and won't have the same typical seasonality associated with that quarter. For Financial and Valuation Advisory, revenues were $87 million for the quarter, a 6% increase from the same period last year. We had 1,103 Fee Events during the quarter, compared to 1,005 in the same period last year, a 10% increase. Turning to expenses, our adjusted compensation expenses were $441 million for the quarter, versus $390 million for the same period last year. Our only adjustment was $18 million for deferred retention payments related to certain acquisitions. Our Adjusted Compensation Expense Ratio for the third quarter in both fiscal 2026 and 2025 was 61.5%.

As a result, we expect that our fourth quarter will look more like the first two quarters of our fiscal year and won't have the same typical seasonality associated with that quarter. For Financial and Valuation Advisory, revenues were $87 million for the quarter, a 6% increase from the same period last year. We had 1,103 Fee Events during the quarter, compared to 1,005 in the same period last year, a 10% increase. Turning to expenses, our adjusted compensation expenses were $441 million for the quarter, versus $390 million for the same period last year. Our only adjustment was $18 million for deferred retention payments related to certain acquisitions. Our Adjusted Compensation Expense Ratio for the third quarter in both fiscal 2026 and 2025 was 61.5%.

Speaker #1: For financial and valuation advisory, revenues were $87,000,000 for the quarter, a 6% increase from the same period last year. We had $1,103 fee events during the quarter compared to $1,005 in the same period last year, a 10% increase.

Speaker #1: Turning to expenses, our adjusted compensation expenses were $441,000,000 for the quarter, versus $390,000,000 for the same period last year. Our only adjustment was $18,000,000 for deferred retention payments related to certain acquisitions.

Speaker #1: Our adjusted compensation expense ratio for the third quarter in both fiscal 2026 and 2025 was 61.5%. We expect to maintain our long-term target of 61.5% for the adjusted compensation expense ratio for the balance of the year.

Lindsey Alley: We expect to maintain our long-term target of 61.5% for the adjusted compensation expense ratio for the balance of the year. Our adjusted non-compensation expense ratio for Q3 was 13.1%, consistent with the same period last year. For the quarter, we adjusted out of non-compensation expenses $2.2 million in integration and acquisition-related costs, $1.3 million in non-cash acquisition-related amortization, and $600 thousand pertaining to professional fees associated with streamlining our global organizational structure, also referred to as Project Solo. Looking at year-to-date performance, our adjusted non-compensation expenses increased 11% versus the same year-to-date period last year. We expect the fiscal Q4 year-over-year growth in adjusted non-compensation expenses to be consistent with what we've experienced year to date.

We expect to maintain our long-term target of 61.5% for the adjusted compensation expense ratio for the balance of the year. Our adjusted non-compensation expense ratio for Q3 was 13.1%, consistent with the same period last year. For the quarter, we adjusted out of non-compensation expenses $2.2 million in integration and acquisition-related costs, $1.3 million in non-cash acquisition-related amortization, and $600 thousand pertaining to professional fees associated with streamlining our global organizational structure, also referred to as Project Solo. Looking at year-to-date performance, our adjusted non-compensation expenses increased 11% versus the same year-to-date period last year. We expect the fiscal Q4 year-over-year growth in adjusted non-compensation expenses to be consistent with what we've experienced year to date.

Speaker #1: Our adjusted non-compensation expense ratio for the third quarter was 13.1%, consistent with the same period last year. For the quarter, we adjusted out of non-compensation expenses $2.2 million in integration and acquisition-related costs, $1.3 million in non-cash acquisition-related amortization, and $600,000 pertaining to professional fees associated with streamlining our global organizational structure.

Speaker #1: Also referred to as Project Solo. Looking at year-to-date performance, our adjusted non-compensation expenses increased 11% versus the same year-to-date period last year. We expect the fiscal fourth quarter year-over-year growth in adjusted non-compensation expenses to be consistent with what we have experienced year-to-date.

Speaker #1: Our adjusted effective tax rate for the third quarter was 30.6% compared to 33.3% for the same quarter last year. The decrease was primarily a result of decreased state taxes and decreased non-deductible expenses.

Lindsey Alley: Our adjusted effective tax rate for Q3 was 30.6%, compared to 33.3% for the same quarter last year. The decrease was primarily a result of decreased state taxes, and decreased nondeductible expenses. For the quarter, we adjusted out of our effective tax rate the effects of nondeductible acquisition-related costs. We expect the French transaction to close in the next couple of weeks. This transaction is structured as a combination between our French operations and Audere, and will result in Houlihan Lokey owning 51% of the combined business and the previous shareholders of Audere owning 49%. As with many business combinations, we have created mechanisms that allow us to increase our ownership over time, and under certain circumstances. Turning to the balance sheet, we ended the quarter with approximately $1.2 billion of cash and investments.

Our adjusted effective tax rate for Q3 was 30.6%, compared to 33.3% for the same quarter last year. The decrease was primarily a result of decreased state taxes, and decreased nondeductible expenses. For the quarter, we adjusted out of our effective tax rate the effects of nondeductible acquisition-related costs. We expect the French transaction to close in the next couple of weeks. This transaction is structured as a combination between our French operations and Audere, and will result in Houlihan Lokey owning 51% of the combined business and the previous shareholders of Audere owning 49%. As with many business combinations, we have created mechanisms that allow us to increase our ownership over time, and under certain circumstances. Turning to the balance sheet, we ended the quarter with approximately $1.2 billion of cash and investments.

Speaker #1: For the quarter, we adjusted out of our effective tax rate the effects of non-deductible acquisition-related costs. We expect the French transaction to close in the next couple of weeks.

Speaker #1: This transaction is structured as a combination between our French operations and Audere. And will result in HOULIHAN LOKEY owning 51% of the combined business, and the previous shareholders of Audere owning 49%.

Speaker #1: As with many business combinations, we have created mechanisms that allow us to increase our ownership over time and under certain circumstances. Turning to the balance sheet, we ended the quarter with approximately $1.2 billion of cash and investments.

Speaker #1: Also, in our third quarter, we repurchased approximately $418,000 shares as part of our share repurchase program. We will continue to evaluate balance sheet flexibility for acquisitions versus excess cash for share repurchases.

Lindsey Alley: Also, in our Q3, we repurchased approximately 418,000 shares as part of our share repurchase program. We will continue to evaluate balance sheet flexibility for acquisitions versus excess cash for share repurchases. With that, operator, we can open the line for questions.

Also, in our Q3, we repurchased approximately 418,000 shares as part of our share repurchase program. We will continue to evaluate balance sheet flexibility for acquisitions versus excess cash for share repurchases. With that, operator, we can open the line for questions.

Speaker #1: Operator, we can open the line for questions.

Speaker #1: questions. Thank And with that,

Speaker #2: you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchstone phone, if you are using a speakerphone, please pick up your handset before pressing the keys.

Operator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause for just a moment to assemble our roster. The first question today will come from Brennan Hawken with BMO Capital Markets. Please go ahead.

Speaker #2: If at any time your question has been addressed, and you would like to withdraw your question, please press star, then two. At this time, we will pause for just a moment to assemble our roster.

Speaker #2: And the first question today will come from Brennan Hawking with BMO Capital Markets. Please go ahead.

Speaker #2: ahead.

Speaker #3: Hey, good afternoon, Scott. Good

Brennan Hawken: Hey, good afternoon, Scott. Good afternoon, Lindsey. I hope you guys are doing well. Would love to drill down on the outlook for restructuring. So, loud and clear on the seasonality, not gonna see the similar typical strength in the fiscal Q4. But more importantly, you know, the outlook, you guys have been early on in saying the activity was slowing, as the capital markets activity and corp fin has improved. Sounds like that remains the case. Can you maybe help us bridge the gap in between increasing concerns around the private credit markets, you know, the press attention on some of those issues recently, and then the outlook for the restructuring activity to slow?

Brennan Hawken: Hey, good afternoon, Scott. Good afternoon, Lindsey. I hope you guys are doing well. Would love to drill down on the outlook for restructuring. Loud and clear on the seasonality, not gonna see the similar typical strength in the fiscal Q4. More importantly, you know, the outlook, you guys have been early on in saying the activity was slowing, as the capital markets activity and corp fin has improved. Sounds like that remains the case. Can you maybe help us bridge the gap in between increasing concerns around the private credit markets, the press attention on some of those issues recently, and then the outlook for the restructuring activity to slow?

Speaker #3: Afternoon, Lindsey. I hope you guys are doing well. Would love to throw down on the outlook for a structure. So the loud and clear on the seasonality is not going to see the similar typical strength in the fiscal fourth quarter.

Speaker #3: But more importantly, the outlook—you guys have been early on in saying the activity was slowing. As the capital markets activity and corp chain has improved, it sounds like that remains the case.

Speaker #3: Can you maybe help us bridge the gap in between increasing concerns around the private credit markets? The press attention on some of those issues recently, and then the outlook for the restructuring activity to slow?

Speaker #2: Yeah, happy to do that. If you look at structurally, what we've been saying is that the market is getting better for M&A. Capital is very plentiful; interest rates are likely declining.

Scott Adelson: ... Yeah, happy to do that, Ben. If you look at structurally, what we've been saying is that the market is getting better for M&A, capital is very plentiful, interest rates are likely declining, and you put those all together, you're likely to see declining activity levels in restructuring, just structural. Don't disagree with you that there are always, all over the world, pockets of opportunities, whether that is in industries, whether that's in geographies, whether that is due to geopolitical events, that creates opportunity for restructuring. The visibility of that in what we're talking about, it's not clear enough that it is showing up in consistent new opportunities.

Speaker #2: And you put those all together, you're likely to see declining activity levels in restructuring, just structural. Don't disagree with you that there are always, all over the world, pockets of opportunities—whether that is in industries, whether that's in geographies, whether that is due to geopolitical events.

Speaker #2: The creates opportunity for restructuring. The visibility of that in what we're talking about, it's not clear enough that it is showing up in consistent new opportunities.

Speaker #2: I don't disagree with you at all that there is a very good chance that a number of those elements that we just discussed—some of them will occur, whether it be in a sector or geography—that will cause new opportunities to

Scott Adelson: I don't disagree with you at all that there is a very good chance that a number of those elements that we just discussed, some of them will occur, whether it be in a sector or geography, that will cause new opportunities to arise.

I don't disagree with you at all that there is a very good chance that a number of those elements that we just discussed, some of them will occur, whether it be in a sector or geography, that will cause new opportunities to arise.

Speaker #2: arise. Okay.

Brennan Hawken: Okay, got it. Thanks for that. And then Corporate Finance. So the revenues picked up a bit quarter-over-quarter, but not as much as we typically see in the December quarter. So curious about the expectations for the end of the fiscal year on the Corporate Finance side. I believe your commentary on not-- the lack of seasonality was focused on restructuring. So just wanna make sure I heard that right. And then it also sounds like the outlook is improving for next fiscal year. You know, could you maybe help us understand what-- if there's, like, a comparable period that we should think about when we're considering magnitude of potential growth that seems to be shaping up here as we think about next fiscal year?

Brennan Hawken: Okay, got it. Thanks for that. Then Corporate Finance. The revenues picked up a bit quarter-over-quarter, but not as much as we typically see in the December quarte Curious about the expectations for the end of the fiscal year on the Corporate Finance side. I believe your commentary on not-- the lack of seasonality was focused on restructuring. Just wanna make sure I heard that right. Then it also sounds like the outlook is improving for next fiscal year. Could you maybe help us understand what-- if there's, like, a comparable period that we should think about when we're considering magnitude of potential growth that seems to be shaping up here as we think about next fiscal year?

Speaker #3: Got it. Thanks for that. And then corporate finance. So, the revenues picked up a bit quarter over quarter, but not as much as we typically see in the December quarter.

Speaker #3: So, curious about the expectations for the end of the fiscal year on the corporate finance side. I believe your commentary on the lack of seasonality was focused on restructuring.

Speaker #3: So I just want to make sure I heard that right. And then it also sounds like the outlook is improving for next fiscal year.

Speaker #3: Could you maybe help us understand if there's a comparable period that we should think about when we're considering the magnitude of potential growth that seems to be shaping up here as we think about next fiscal year?

Speaker #2: So yes, you heard that correctly. That was in relation to restructuring, not the corporate finance. Corporate finance is continuing to get stronger and stronger as I said in my prepared statements.

Scott Adelson: So, yes, you heard that correctly, though that was in relation to restructuring, not to Corporate Finance. Corporate Finance is continuing to get stronger and stronger. As I said in my prepared statements, the M&A activity is absolutely increasing, and even more so on the Private Equity side than we have seen in recent history. And we expect that to continue and have good visibility that that is gonna continue for a while.

Scott Adelson: Yes, you heard that correctly, though that was in relation to restructuring, not to Corporate Finance. Corporate Finance is continuing to get stronger and stronger. As I said in my prepared statements, the M&A activity is absolutely increasing, and even more so on the Private Equity side than we have seen in recent history. And we expect that to continue and have good visibility that that is gonna continue for a while.

Speaker #2: The M&A activity is absolutely increasing, and even more so on the private equity side than we have seen in recent history. And we expect that to continue and have good visibility that that is going to continue for a

Speaker #2: While—and yeah, I mean, with respect to

Lindsey Alley: And yeah, I mean, with respect to Q4, you know, corporate finance has seen quite solid growth year to date, and that's probably not a bad proxy for Q4. And I'd say that, as Scott said, you know, the activity levels, which are revenues six months from now, nine months from now, continue to give us comfort in our fiscal 2027 estimates and how everyone's thinking about the business.

James Alley: Yeah, I mean, with respect to Q4, you know, corporate finance has seen quite solid growth year to date, and that's probably not a bad proxy for Q4. I'd say that, as Scott said, the activity levels, which are revenues six months from now, nine months from now, continue to give us comfort in our fiscal 2027 estimates and how everyone's thinking about the business.

Speaker #4: Q4, corporate finance has seen quite solid growth year to date. And that's probably not a bad proxy for Q4. And I'd say that as Scott said, the activity levels, which are revenues six months from now, nine months from now, continue to give us comfort in our fiscal 27 estimates.

Speaker #4: And how everyone's thinking about the

Speaker #4: business.

Speaker #3: Great. Thanks so much for taking my

Brennan Hawken: Great. Thanks so much for taking my questions.

Speaker #2: Always our questions.

Scott Adelson: Always our pleasure.

Speaker #2: Pleasure. The next question will come from James.

Operator: The next question will come from James Yaro with Goldman Sachs. Please go ahead.

Speaker #1: Yarrow with Goldman Sachs. Please go ahead.

Speaker #5: Thanks. And thanks for taking the questions. Good afternoon. Just quickly—hey guys—just quickly on corporate finance, I just want to dig in a little bit on the US versus non-US outlook.

James Yaro: Thanks, and thanks for taking the questions and, good afternoon. Just quickly,

Scott Adelson: Hey, James.

James Yaro: Hey, guys. Just quickly on Corporate Finance, I just wanted to dig in a little bit, on the US versus non-US outlook. And obviously, I understand that you have a little bit more idiosyncratic growth in Europe, given, you know, for example, the two acquisitions you just announced, and, you know, scaling from a lower base there. But maybe you could just talk a little bit about, compare and contrast the growth potential of those two regions.

James Yaro: Hey, guys. Just quickly on Corporate Finance, I just wanted to dig in a little bit, on the US versus non-US outlook. Obviously, I understand that you have a little bit more idiosyncratic growth in Europe, given, you know, for example, the two acquisitions you just announced, and scaling from a lower base there. But maybe you could just talk a little bit about, compare and contrast the growth potential of those two regions.

Speaker #5: And obviously, I understand that you have a little bit more idiosyncratic growth in Europe, given for example, the two acquisitions you just announced. And scaling from a lower base there.

Speaker #5: But maybe you could just talk a little bit about, compare and contrast, the growth potential of those two regions. Yeah, happy to do that.

Scott Adelson: Yeah, happy to. Obviously, the US continues to be both for us and for the market overall, the largest region, and that, therefore, is still the most important market. Having said that, our European business is growing incredibly well. We really believe we are offering a truly differentiated product in Europe, and it, the market, is rewarding us for that, and we continue to feel very good about the traction that we're getting in Europe.

Speaker #5: Obviously, the US continues to be bold for us and for the market overall. The largest region. And that, therefore, is still the most important market, having said that in our European business is growing incredibly well.

Speaker #5: We really believe we are offering a truly differentiated product in Europe. And the market is rewarding us for that. And we continue to feel very good about the traction that we're getting in Europe.

Speaker #5: Great. And so maybe tying that in with the acquisitions, I'd just love to get your sense if you take a step back on just the overall strategy for Europe and how these two acquisitions fit into completing the mosaic for your European

James Yaro: Great. So maybe tying that in with the acquisitions, you know, I'd just love to get your sense, if you take a step back, on just, you know, the overall strategy for Europe and how these two acquisitions fit into completing the mosaic for your European business.

James Yaro: Great maybe tying that in with the acquisitions, I'd just love to get your sense, if you take a step back, on just, the overall strategy for Europe and how these two acquisitions fit into completing the mosaic for your European business.

Speaker #5: business. Yeah.

Scott Adelson: Yeah, happy to do that. I mean, I think that, obviously, we have had a presence in France for a period of time, but it was a very relatively small business relative to a number of other countries in Europe. At the same time, it's one of the most important markets in Europe. It's not lost on us that it is the headquarters of a couple of our sizable competitors, and we had to wait until we found the right partners to really aggressively grow that business, and we feel incredibly good with the decision we've made.

Speaker #3: Happy to do that. I mean, I think that obviously we have had a presence in France for a period of time. But it was a very relatively small business, relative to a number of other countries in Europe.

Speaker #3: And at the same time, it's one of the most important markets in Europe. It's not lost on us that it is the headquarters of a couple of our sizable competitors.

Speaker #3: And we had to wait until we found the right partners to really aggressively grow that business. And we feel incredibly good with the decision we've made.

Speaker #4: And I'd say that the acquisition of France obviously brings, or the combination with France brings, revenues along with it. But it also lifts kind of all the boats in Europe.

Lindsey Alley: And I'd say that the acquisition of France obviously brings, or the combination of France brings, revenues along with it, but it also lifts kind of all the boats in Europe. I mean, it being underweighted in that country had an impact across the UK and Europe for us. And I'd say that now that we have a solution, everyone is gonna benefit from it in the Houlihan Lokey umbrella and EMEA.

James Alley: I'd say that the acquisition of France obviously brings, or the combination of France brings, revenues along with it, but it also lifts kind of all the boats in Europe. It being underweighted in that country had an impact across the UK and Europe for us. I'd say that now that we have a solution, everyone is gonna benefit from it in the Houlihan Lokey umbrella and EMEA.

Speaker #4: I mean, being underweighted in that country had an impact across the UK and Europe for us. And I'd say that now that we have a solution, everyone is going to benefit from it in the whole analog umbrella in EMEA.

Scott Adelson: I agree with that completely. And then on the other side, within Capital Solutions, as we have said before, we're probably underweighted on the real estate side, and this is an effort to really continue to grow that underweighting on the real estate side.

Speaker #2: I agree with that completely. And then on the other side, within Capital Solutions, as we have said before, we're probably underweighted on the real estate side.

Scott Adelson: I agree with that completely. Then on the other side, within Capital Solutions, as we have said before, we're probably underweighted on the real estate side, and this is an effort to really continue to grow that underweighting on the real estate side.

Speaker #2: And this is an effort to really continue to grow that underweighting on the real estate

Speaker #2: side. We do stay As always. underweight. Reduce the underweighting would be the better way to say that. No double negatives.

James Yaro: As always-

Scott Adelson: Reduce the underweight. Reduce the under weighting would be the better way to say that. No double negatives.

Speaker #5: Okay. That's perfect. As always, super clear and helpful. Thank you so much.

James Yaro: Okay, that's perfect. As always, super clear and helpful. Thank you so much.

Speaker #2: Great. Thanks, James.

Scott Adelson: Great. Thanks, James.

Speaker #1: The next question will come from Devin Ryan with Citizens. Please go

Operator: ... The next question will come from Devin Ryan with Citizens. Please go ahead.

Speaker #1: ahead.

Speaker #6: Great. Hi, Scott. Hi,

Devin Ryan: Great. Hi, Scott. Hi, Lindsey. How are you?

Speaker #6: How are you?

Speaker #4: Hey, Lindsay.

Lindsey Alley: Hey, Devin.

James Alley: Hey, Devin.

Speaker #4: Devin.

Speaker #2: Thanks, Devin.

Scott Adelson: Hey, thanks, Devin.

Devin Ryan: Wanna ask a question just on sponsor engagement, and, you know, nice to hear, you know, some of the improvement you're seeing. And just would be good to get a little bit of a better sense of kind of the rate of change that you're seeing with sponsors. And obviously, you know, a lot of pressure, I think, on sponsors to return capital. Obviously, still record dry powder to deploy. So, you know, are you seeing kind of a steady build there, or is it something maybe better than that, just given kind of those pressures? And is it broad-based across verticals, or is it targeted to certain verticals? Just love a little more context on kind of the trajectory that you're seeing there. Thanks.

Speaker #6: I want to ask a question just on sponsor engagement. And nice to hear some of the improvement you're seeing. And just would be good to get a little bit of a better sense of kind of the rate of change that you're seeing with sponsors.

Devin Ryan: Wanna ask a question just on sponsor engagement, and, nice to hear, some of the improvement you're seeing. Just would be good to get a little bit of a better sense o the rate of change that you're seeing with sponsors. Obviously, you know, a lot of pressure, I think, on sponsors to return capital. Obviously, still record dry powder to deploy. are you seeing a steady build there, or is it something maybe better than that, just given those pressures? Is it broad-based across verticals, or is it targeted to certain verticals? Just love a little more context on kind of the trajectory that you're seeing there. Thanks.

Speaker #6: And obviously, a lot of pressure, I think, on sponsors to return capital. Obviously, still record-dry powder to deploy. So are you seeing kind of a steady build there?

Speaker #6: Or is it something maybe better than that, just given kind of those pressures? And is it broad-based across verticals, or is it targeted to certain areas of the trajectory that you're seeing there?

Speaker #6: verticals? Just love a little more context on kind

Speaker #6: Thanks. Yeah.

Scott Adelson: Yeah, happy to do that. I mean, what we've been saying for a while is it's been getting better quarter by quarter, and that has been very consistent, with some bumps along the road, usually due to external factors, geopolitical mostly, that have caused that. And really, for the last couple of quarters, we've really been saying it's been picking up quite a bit, and it's really been after the beginning of the year, continuing to pick up even more. And so it's at an accelerating rate, is what it feels like for new opportunities.

Scott Adelson: Yeah, happy to do that. I mean, what we've been saying for a while is it's been getting better quarter by quarter, and that has been very consistent, with some bumps along the road, usually due to external factors, geopolitical mostly, that have caused that. Really, for the last couple of quarters, we've really been saying it's been picking up quite a bit, and it's really been after the beginning of the year, continuing to pick up even more. It's at an accelerating rate, is what it feels like for new opportunities.

Speaker #5: Happy to do that. I mean, what we've been saying for a while is it's been getting better quarter by quarter. And that has been very consistent, with some bumps along the road—usually due to external factors, geopolitical mostly—that have caused that.

Speaker #5: And really, for the last couple of quarters, we've really been saying it's been picking up quite a bit. And it's really been after the beginning of the year, continuing to pick up even more.

Speaker #5: And so, it's at an accelerating rate, is what it feels like, for new opportunities.

Speaker #4: And we've said this to individuals on either investor calls or analyst calls. But there's a couple of major inflection points during the calendar year in the middle market.

Lindsey Alley: And we've said this to individuals on, you know, either investor calls or analyst calls, but you know, there's a couple of major inflection points during the calendar year in the middle market. One of them is after Labor Day, and one of them is after New Year's. And both of those periods of time were quite solid and strong for us and probably exceeded expectations. And I think that's a little bit why you're hearing the commentary that we're saying when we talk about activity levels increasing.

James Alley: We've said this to individuals on, you know, either investor calls or analyst calls, but you know, there's a couple of major inflection points during the calendar year in the middle market. One of them is after Labor Day, and one of them is after New Year's. Both of those periods of time were quite solid and strong for us and probably exceeded expectations. I think that's a little bit why you're hearing the commentary that we're saying when we talk about activity levels increasing.

Speaker #4: One of them is after Labor Day, and one of them is after New Year's. Both of those periods of time were quite solid and strong for us.

Speaker #4: And probably exceeded expectations. And I think that's a little bit why you're hearing the commentary that we're saying when we talk about activity levels increasing.

Speaker #3: And in terms of your really broad and across sectors, I would say that, if anything, it's the sectors' standpoint—the ones that had underperformed have come back even stronger.

Scott Adelson: And in terms of your question of, of sectors, it is really broad and across sectors. And I would say that if anything, it's the sectors that, from an increase standpoint, the ones that had underperformed have come back even stronger, but it is very much cross-support.

Scott Adelson: In terms of your question of, of sectors, it is really broad and across sectors. I would say that if anything, it's the sectors that, from an increase standpoint, the ones that had underperformed have come back even stronger, but it is very much cross-support.

Speaker #3: But it is very much across the board.

Speaker #6: Got it. Okay, I appreciate that. And then I just want to come back to a follow-up on some of the discussion you were just having in these questions.

Devin Ryan: Got it. Okay, I appreciate that. And then just wanna come back to, kind of a follow-up of some of the discussion you were just having in those questions. As we kinda think about some of the investments the firm has made over the past, you know, 5, 6 years, I mean, you've obviously, you've built out quite a bit outside the US, a lot of kind of sector-specific M&A, beefing up Capital Solutions. So kind of the capabilities are broader, they're deeper. When you think about kind of the white space at the firm today, where do you still see the biggest opportunities? Like, if I look at a heat map from external data, which I know is not perfect, it looks like maybe there's a little bit of room in healthcare and energy, just for example.

Devin Ryan: Got it. Okay, I appreciate that. Then just wanna come back to, a follow-up of some of the discussion you were just having in those questions. As we think about some of the investments the firm has made over the past, five, six years, I mean, you've obviously, you've built out quite a bit outside the US, a lot of sector-specific M&A, beefing up Capital Solutions. The capabilities are broader, they're deeper. When you think about kind of the white space at the firm today, where do you still see the biggest opportunities? Like, if I look at a heat map from external data, which I know is not perfect, it looks like maybe there's a little bit of room in healthcare and energy, just for example.

Speaker #6: As we kind of think about some of the investments the firm has made over the past five, six years, I mean, you've obviously built out quite a bit outside the US.

Speaker #6: A lot of kind of sector-specific M&A. Beefing up Capital Solutions. So kind of the capabilities are broader. They're deeper. When you think about kind of the white space at the firm today, where do you still see the biggest opportunities?

Speaker #6: If I look at a heat map from external data, which I know is not perfect, it looks like maybe there's a little bit of room in healthcare and energy.

Speaker #6: Just, for example. But would love to just hear from you kind of where you feel like there's And where you could just maybe add a little bit of resource and get some nice network effects on that.

Devin Ryan: But would love to just hear from you kind of where you feel like there's still, you know, nice white space and where you could just maybe add a little bit of resource and get, you know, some nice network effects on that.

Would love to just hear from you where you feel like there's still, nice white space and where you could just maybe add a little bit of resource and get, some nice network effects on that.

Speaker #3: Yeah. I mean, I am a very strong believer that it is everywhere. We have so much opportunity. I know that you want me to be more specific than that.

Scott Adelson: Yeah. I mean, I am a very strong believer that it is everywhere. We have so much opportunity. I know that's you want me to be more specific than that, but it is, in every sector, we have really, really meaningful room to grow, and it we talk about it. We have around 200 sub-sectors today, and that is not built out all over the world, even remotely, and it is also not. 200 is nowhere near saturation of sub-sectors. So that's just on the industry side. And then, obviously, on the product side, you're seeing us continue to build out with the example of what we've done in Germany and the UK, and the Capital Solutions will continue to have build out in capabilities well around the world.

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