Houlihan Lokey Q3 2026 Houlihan Lokey Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 Houlihan Lokey Inc Earnings Call
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.
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.
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.
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.
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.
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.
Brennan Hawken: Great. Thanks so much for taking my questions.
Speaker #2: Always our questions.
Scott Adelson: Always our pleasure.
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.
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,
James Yaro: Thanks, and thanks for taking the questions and, good afternoon. Just quickly,
Scott Adelson: Hey, James.
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.
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.
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-
James Yaro: As always-
Scott Adelson: Reduce the underweight. Reduce the under weighting would be the better way to say that. No double negatives.
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.
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.
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.
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?
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.
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.
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. That's just on the industry side. 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.
Speaker #3: But it is in every sector. We have really, really meaningful room to grow. And we talk about it. We have around 200 subsectors today.
Speaker #3: And that is not built out all over the world, even remotely. And it is also not 200 is nowhere near saturation of subsectors. So that's just on the industry side.
Speaker #3: 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.
Speaker #3: And that Capital Solutions will continue to have build-out in capability as well around the world. And then obviously we have our other product lines as well.
Scott Adelson: Then, obviously, we have our other product lines as well, and we have geographies. I mean, it is. There's a tremendous amount of white space out there. Our map, our page is quite white.
Then, obviously, we have our other product lines as well, and we have geographies. I mean, it is. There's a tremendous amount of white space out there. Our map, our page is quite white.
Speaker #3: And we have geographies. I mean, there is a tremendous amount of white space out there. Our map, our page, is quite
Devin Ryan: Okay. Well, good to hear. Thanks so much, guys. Appreciate it.
Speaker #6: Okay. Well, good to hear. Thanks so much, guys. Appreciate it.
Devin Ryan: Okay. Well, good to hear. Thanks so much, guys. Appreciate it.
Speaker #2: Thanks. The next question will come from Brendan
Scott Adelson: Thanks.
Scott Adelson: Thanks.
Operator: The next question will come from Brendan O'Brien with Wolfe Research. Please go ahead.
Operator: The next question will come from Brendan O'Brien with Wolfe Research. Please go ahead.
Speaker #1: O'Brien with Wolf Research. Please go ahead.
Speaker #7: Good afternoon, and thanks for taking my questions. I just want to start—hi. I just wanted to follow up on the restructuring outlook.
Brendan O'Brien: Good afternoon, and thanks for taking my questions.
Brendan O'Brien: Good afternoon, and thanks for taking my questions.
Scott Adelson: Hi, Brendan.
Scott Adelson: Hi, Brendan.
Brendan O'Brien: I guess, to start, I just wanted to follow up on the restructuring outlook. You know, I know there's some uncertainty still, but just given the longer lead time for the business, you should have a pretty good baseline for how revenues will track at least early next year. And so I was just hoping you can put some guardrails around how we should be thinking about the magnitude of decline in this business, potentially, just given it does tend to see higher highs, higher floors, as you continue to progress through time.
Brendan O'Brien: I guess, to start, I just wanted to follow up on the restructuring outlook. I know there's some uncertainty still, but just given the longer lead time for the business, you should have a pretty good baseline for how revenues will track at least early next year. I was just hoping you can put some guardrails around how we should be thinking about the magnitude of decline in this business, potentially, just given it does tend to see higher highs, higher floors, as you continue to progress through time.
Speaker #7: I know there's some uncertainty still. But just given the longer lead time for the business, you should have a pretty good baseline for how revenues will track at least early next year.
Speaker #7: And so I was just hoping you can put some guardrails around how we should be thinking about the magnitude of decline in this business potentially, just given it does tend to see higher highs, higher floors as you continue to progress through
Speaker #7: time. Yeah.
Speaker #4: I mean, I'd say we do have decent visibility looking forward in restructuring. We don't generally share that information, but I think it's kind of like—it's kind of like anything else.
Lindsey Alley: Yeah, I mean, I'd say we do have decent visibility looking forward in restructuring. We don't generally share that information, but I think that, you know, it's kind of like anything else with respect to cyclicality. There are going to be ebbs and flows. We didn't know, sitting here before the last peak, what it was gonna look like, and we don't know what the next couple of years is gonna look like, but we're in an ebb period. Having said that, I'd say that we still believe that there are... That is a true global business for us. It is highly diversified, and at any point, whether it's a geography, an industry, or a specific product, could trigger restructuring growth.
James Alley: Yeah, I mean, I'd say we do have decent visibility looking forward in restructuring. We don't generally share that information, but I think that, it's like anything else with respect to cyclicality. There are going to be ebbs and flows. We didn't know, sitting here before the last peak, what it was gonna look like, and we don't know what the next couple of years is gonna look like, but we're in an ebb period. Having said that, I'd say that we still believe that there are... That is a true global business for us. It is highly diversified, and at any point, whether it's a geography, an industry, or a specific product, could trigger restructuring growth.
Speaker #4: With respect to cyclicality, there are going to be ebbs and flows. We didn't know, sitting here before the last peak, what it was going to look like.
Speaker #4: And we don't know what the next couple of years is going to look like. But we're in an ebb period. Having said that, I'd say that we still believe that there is a true global business for us.
Speaker #4: It is highly diversified. And at any point, whether it's a geography, an industry, or a specific product, could trigger restructuring growth. And so we're quite comfortable with our position in restructuring over the next 10 to 20 years.
Lindsey Alley: And so we're quite comfortable with our position in restructuring over the next 10 to 20 years. We're just in an ebb period right now, and what the sort of ebb looks like, I think, is anyone's guess. But we're certainly not sitting here concerned about the magnitude of the decline. We don't think about it that way.
We're quite comfortable with our position in restructuring over the next 10-20 years. We're just in an ebb period right now, and what the sort of ebb looks like, I think, is anyone's guess. We're certainly not sitting here concerned about the magnitude of the decline. We don't think about it that way.
Speaker #4: We're just in an ebb period right now. And what the sort of ebb looks like, I think, is anyone's guess. But I don't—we're certainly not sitting here concerned about the magnitude of the decline; we don't think about it that way.
Speaker #6: Helpful color. Thank you for taking the question. And I guess for my follow-up, just wanted to touch on capital return. Understand your preference for maintaining enough cash to do acquisitions as you executed this quarter.
Alex Bond: ... Helpful color. Thank you for taking the question. I guess for my follow-up, just wanted to touch on capital return. You know, understand your preference for, you know, maintaining enough cash to do acquisitions as you executed this quarter. But just given revenue should only accelerate from here, and you already have a fairly strong cash, cash position, at least pre-paying out these deals, I just wanna get an update as to how you're thinking about capital management at this juncture, and also if we can get an update on what your acquisition pipeline looks like at the moment.
Brendan O'Brien: ... Helpful color. Thank you for taking the question. I guess for my follow-up, just wanted to touch on capital return. Understand your preference for, maintaining enough cash to do acquisitions as you executed this quarter. Just given revenue should only accelerate from here, and you already have a fairly strong cash, cash position, at least pre-paying out these deals, I just wanna get an update as to how you're thinking about capital management at this juncture, and also if we can get an update on what your acquisition pipeline looks like at the moment.
Speaker #6: But just given revenue should only accelerate from here and you already have a fairly strong cash position, at least prepaying out these deals, I just want to get an update as to how you're thinking about capital management at this juncture.
Speaker #6: And also if we can get an update on what your acquisition pipeline looks like at the
Speaker #6: moment. So I'll let Scott handle the
Lindsey Alley: So I'll let Scott handle the acquisition pipeline. I think with respect to capital deployment, it really hasn't changed. We have, as I think everyone knows, for the last couple quarters, we have started to repurchase some shares. I think we will continue, so long as the economy continues to perform well, we will continue to take a look at whether or not it makes sense to repurchase shares going forward, in relatively smaller increments. The reason we do it that way is 'cause our pipeline, which Scott will talk about, is quite strong, and we wanna remain flexible in terms of being able to do acquisitions for, for cash.
James Alley: I'll let Scott handle the acquisition pipeline. I think with respect to capital deployment, it really hasn't changed. We have, as I think everyone knows, for the last couple quarters, we have started to repurchase some shares. I think we will continue, so long as the economy continues to perform well, we will continue to take a look at whether or not it makes sense to repurchase shares going forward, in relatively smaller increments. The reason we do it that way is 'cause our pipeline, which Scott will talk about, is quite strong, and we wanna remain flexible in terms of being able to do acquisitions for, for cash.
Speaker #4: acquisition pipeline. I think with respect to capital deployment, it really hasn't changed. We have, as I think everyone knows, after the last couple of quarters, we have started to repurchase some shares.
Speaker #4: I think we will continue so long as the economy continues to perform well. We will continue to take a look at whether or not it makes sense to repurchase shares going forward.
Speaker #4: And relatively smaller increments. And the reason we do it that way is because our pipeline, which Scott will talk about, is quite strong. And we want to remain flexible in terms of being able to do acquisitions for cash.
Speaker #4: And so, we've said before, our strong preference is to put money to work—excess cash to work—through strategic acquisitions that make sense for us.
Lindsey Alley: So, you know, we've said before, our strong preference is to put money to work, excess cash to work through strategic acquisitions that make sense for us, followed by dividends and share repurchases, and that really hasn't changed for us. And Scott will talk a little bit-
We've said before, our strong preference is to put money to work, excess cash to work through strategic acquisitions that make sense for us, followed by dividends and share repurchases, and that really hasn't changed for us. Scott will talk a little bit-
Speaker #4: Followed by dividends and share repurchases. And that really hasn't changed for us. And Scott will talk a little
Speaker #4: bit about the pipeline. Happy to do
Scott Adelson: Yeah
Scott Adelson: Yeah
Lindsey Alley: ... about the pipeline.
James Alley: ... about the pipeline.
Scott Adelson: Happy to do that. As I said before, we've been very fortunate. Our pipeline is very strong. I think these two deals are an indication, but they are backed up by a number of other opportunities that are coming through the pipe, and I wish probably even more than all of you do, that I could time them all perfectly to roll quarter by quarter. I don't get the right to do that, but they are lined up, and it's fair to say we have more than we have planned to do over time.
Scott Adelson: Happy to do that. As I said before, we've been very fortunate. Our pipeline is very strong. I think these two deals are an indication, but they are backed up by a number of other opportunities that are coming through the pipe, and I wish probably even more than all of you do, that I could time them all perfectly to roll quarter by quarter. I don't get the right to do that, but they are lined up, and it's fair to say we have more than we have planned to do over time.
Speaker #6: fortunate. Our pipeline that. I said before, we've been very is very strong. I think these two deals are an indication. But they are backed up by a number of other opportunities that are coming through the pipe.
Speaker #6: Wish probably even more than all of you—and I do—that I could time them all perfectly to roll quarter by quarter. I don't get the right to do that.
Speaker #6: But they are lined up. And it's fair to say we have more that we have planned to do over time. Great. Thank you for taking my questions.
Alex Bond: Great. Thank you for taking my questions.
Brendan O'Brien: Great. Thank you for taking my questions.
Speaker #6: Our pleasure.
Scott Adelson: Our pleasure.
Scott Adelson: Our pleasure.
Speaker #1: The next question will come from Ryan Kenney with Morgan Stanley. Please go ahead.
Operator: The next question will come from Ryan Kenney with Morgan Stanley. Please go ahead.
Operator: The next question will come from Ryan Kenney with Morgan Stanley. Please go ahead.
Speaker #8: Hi. Thanks for taking my questions. Wondering if you could give some more color on the non-comp expenses. It looks like IT and communication spend, and professional fees have been a bit elevated.
Ryan Kenny: Hi, thanks for taking my questions. Wondering if you could give some more color on the non-comp expenses. It looks like IT and communication spend, and professional fees have been a bit elevated, so anything that we should think about in terms of puts and takes in non-comp in the quarter and as we look forward into fiscal 2027?
Ryan Kenny: Hi, thanks for taking my questions. Wondering if you could give some more color on the non-comp expenses. It looks like IT and communication spend, and professional fees have been a bit elevated, so anything that we should think about in terms of puts and takes in non-comp in the quarter and as we look forward into fiscal 2027?
Speaker #8: So anything that we should think about in terms of puts and takes in non-comp in the quarter and as we look forward into fiscal
Speaker #8: '27? I'd say no
Lindsey Alley: I'd say no puts and takes specifically in the quarter to mention. It just a little bit higher than certainly the first couple quarters in terms of growth. I'd say for Q4, you know, the year-to-date growth for non-comp is probably a decent proxy to what the Q4 is gonna look like. Probably a little bit higher than expected in terms of rent, particularly in Europe and particularly around the acquisitions. You're seeing a little bit of that. But other than that, not much to mention. And I'd say year-to-date, as a proxy for Q4 growth, is probably how I'd think about it.
James Alley: I'd say no puts and takes specifically in the quarter to mention. It just a little bit higher than certainly the first couple quarters in terms of growth. I'd say for Q4, the year-to-date growth for non-comp is probably a decent proxy to what the Q4 is gonna look like. Probably a little bit higher than expected in terms of rent, particularly in Europe and particularly around the acquisitions. You're seeing a little bit of that. Other than that, not much to mention. I'd say year-to-date, as a proxy for Q4 growth, is probably how I'd think about it.
Speaker #4: mention. It just a little puts and takes specifically in the quarter to bit higher. Then certainly the first couple of quarters in terms of growth.
Speaker #4: I'd say for Q4, the year-to-date growth for non-comp is probably a decent proxy for what Q4 is going to look like. Probably a little bit higher than expected in terms of rent, particularly in Europe, and particularly around the acquisitions. You're seeing a little bit of that.
Speaker #4: But other than that, not much to mention. And I'd say year-to-date as a proxy for Q4 growth is probably how I'd think about it.
Speaker #4: But other than that, not much to mention. And I'd say year-to-date as a proxy for Q4 growth is probably how I'd think about it.
Speaker #8: Got it. Thanks.
Ryan Kenny: Got it. Thanks.
Ryan Kenny: Got it. Thanks.
Lindsey Alley: And then-
Speaker #4: And then fiscal '27, same as I've mentioned before, kind of high single digits. Which is kind of how we're thinking about non-comp.
Ryan Kenny: And then-
Lindsey Alley: Fiscal 2027, you know, same as I've mentioned before, kind of high single digits, which is kind of how we're thinking about non-comp.
James Alley: Fiscal 2027, same as I've mentioned before, kind of high single digits, which is how we're thinking about non-comp.
Ryan Kenny: All right, great. And then, you announced the DataBank product in November. Can you give more color on what the strategy is with DataBank, and is it something that you're charging for? And how should we expect that, in general, your data strategy will evolve over time?
Ryan Kenny: All right, great. Then, you announced the DataBank product in November. Can you give more color on what the strategy is with DataBank, and is it something that you're charging for? How should we expect that, in general, your data strategy will evolve over time?
Speaker #8: you announced the data bank All right. Great. And then product in November. Can you give more color on what the strategy is with data bank?
Speaker #8: And is it something that you're charging for? And how should we expect that, in general, your data strategy will evolve?
Speaker #8: over time?
Speaker #6: Yeah. I
Scott Adelson: Yeah, I mean, I would love to spend the next hour talking about that. Lindsey would remind me that this is a small part of our business, and I mean, but it certainly is an important indicator of what's to come, and I think the fact that we have a tremendous amount of what we perceive to be very valuable data, and the marketplace seems to be indicating that as well. It's super early days for us right now. Some of that is available to some existing clients. It is. There's a technological front end to making it available and things like that for other people that is in the works.
Scott Adelson: Yeah, I mean, I would love to spend the next hour talking about that. Lindsey would remind me that this is a small part of our business, and I mean, but it certainly is an important indicator of what's to come, and I think the fact that we have a tremendous amount of what we perceive to be very valuable data, and the marketplace seems to be indicating that as well. It's super early days for us right now. Some of that is available to some existing clients. It is. There's a technological front end to making it available and things like that for other people that is in the works.
Speaker #6: mean, I would love to spend the next hour talking about that. Lindsay would remind me that this is a small part of our business.
Speaker #6: And it is, it's certainly an important indicator of what's to come. And I think the fact that we have a tremendous amount of what we perceive to be very valuable data—and the marketplace seems to be indicating that as well.
Speaker #6: It's super early days for us. Right now that we're some of that is available to some existing clients. It is there is a technological front end to making it available and things like that for other people that is in the works.
Speaker #6: But as I have stated many times before, the ability to monetize some of our proprietary data is something that is certainly top of mind to us.
Scott Adelson: But that, as I have stated many times before, the ability to monetize some of our proprietary data is something that is certainly top of mind to us.
That, as I have stated many times before, the ability to monetize some of our proprietary data is something that is certainly top of mind to us.
Speaker #8: Thank
Speaker #8: you.
Ryan Kenny: Thank you.
Ryan Kenny: Thank you.
Speaker #6: Sure
Scott Adelson: Sure thing.
Scott Adelson: Sure thing.
Speaker #6: thing.
Speaker #1: The next question will come from Alex Bond with KBW.
Operator: The next question will come from Alex Bond with KBW. Please go ahead.
Operator: The next question will come from Alex Bond with KBW. Please go ahead.
Speaker #1: Please go ahead. Hey,
Alex Bond: Hey, everyone. Good afternoon. Just wanted to drill down on the corporate finance business a little bit more. So it sounds like the outlook for fiscal 2027 remains upbeat, which is great. But just curious if you've seen activity levels impacted at all really by, you know, recent geopolitical happenings or I guess, you know, a heightened sense of geopolitical uncertainty over the last couple weeks, or have clients really been willing to look through these issues and are now maybe just more accustomed to higher uncertainty levels? So any color there would be great.
Alex Bond: Hey, everyone. Good afternoon. Just wanted to drill down on the corporate finance business a little bit more. It sounds like the outlook for fiscal 2027 remains upbeat, which is great. Just curious if you've seen activity levels impacted at all really by, recent geopolitical happenings or a heightened sense of geopolitical uncertainty over the last couple weeks, or have clients really been willing to look through these issues and are now maybe just more accustomed to higher uncertainty levels? Any color there would be great.
Speaker #9: on the corporate finance business a little bit everyone. Good afternoon. Just wanted to drill down more. So it sounds like the outlook for fiscal '27 remains upbeat, which is great.
Speaker #9: But just curious if you've seen activity levels impacted at all really by recent geopolitical happenings. Or I guess a heightened sense of geopolitical uncertainty over the last couple of weeks.
Speaker #9: Or if clients really been willing to look through these issues and are now maybe just more accustomed to higher uncertainty levels. So any color there would be great.
Speaker #6: Yeah, happy to do that. And I think that ties well to what Lindsay was talking about after those inflection points most recently.
Scott Adelson: Yeah, happy to do that. And I think that ties well to what Lindsey was talking about after the, and kind of some inflection points and most recently, again, at the beginning of the year. It really is, we recognize there is noise, right, that around the world, and the people's willingness and ability to just look through that noise and just get on with business is stronger than it has ever been.
Scott Adelson: Yeah, happy to do that. I think that ties well to what Lindsey was talking about after the, and some inflection points and most recently, again, at the beginning of the year. It really is, we recognize there is noise, that around the world, and the people's willingness and ability to just look through that noise and just get on with business is stronger than it has ever been.
Speaker #6: Again, at the beginning of the year, it really is — we recognize there is noise, right? That around the world. And that people’s willingness and ability to just look through that noise and just get on with business is stronger than it has ever been.
Speaker #9: Got it. That makes sense. And maybe just moving over to capital solutions. You've touched on continuing to build out a few of the teams within the group as an area of as an area of focus for you recently.
Alex Bond: Got it. That makes sense. Maybe just moving over to Capital Solutions. You know, you've touched on, you know, continuing to build out a few of the teams within the group as an area of focus for you recently. It'd be great if you can just go into maybe a little bit more detail there and maybe comment on what inning you think you might be in, in terms of the build-out for the Capital Solutions group more broadly.
Alex Bond: Got it. That makes sense. Maybe just moving over to Capital Solutions. You've touched on, continuing to build out a few of the teams within the group as an area of focus for you recently. It'd be great if you can just go into maybe a little bit more detail there and maybe comment on what inning you think you might be in, in terms of the build-out for the Capital Solutions group more broadly.
Speaker #9: It'd be great if you can just go into maybe a little bit more detail there, and maybe comment on what ending you think you might be in, in terms of the build-out for the Capital Solutions Group, more.
Speaker #9: Broadly, we are still in very
Scott Adelson: ... we are still in very early innings on Capital Solutions. I mean, pick your innings. We're using a baseball analogy, but third inning, fourth inning, I mean, very early. And that business is growing really nicely. In fact, I was just on a call with one of the heads of it before this, and the demand is really significant. In terms of where it's coming from, it is literally all over the map, from the traditional business to the secondaries to the racks, and even primary. So it is on all fronts at this point.
Scott Adelson: ... we are still in very early innings on Capital Solutions. I mean, pick your innings. We're using a baseball analogy, but third inning, fourth inning, I mean, very early. That business is growing really nicely. In fact, I was just on a call with one of the heads of it before this, and the demand is really significant. In terms of where it's coming from, it is literally all over the map, from the traditional business to the secondaries to the racks, and even primary. It is on all fronts at this point.
Speaker #6: Early innings on capital solutions. I mean, pick your innings—we're using a baseball analogy—but third inning, fourth inning. I mean, very early. And that business is growing really nicely.
Speaker #6: In fact, I was just on a call with one of the heads of it before this. And the demand is really significant. In terms of where it's coming from, it is literally all over the map from the traditional business to the secondaries to the racks.
Speaker #6: And even primary. So it is on all fronts
Speaker #6: at this point.
Speaker #9: Got
Speaker #9: it. Great. Thank you
Alex Bond: Got it. Great. Thank you both.
Alex Bond: Got it. Great. Thank you both.
Speaker #9: Both. The next question will come from...
Operator: The next question will come from Nathan Stein with Deutsche Bank. Please go ahead.
Operator: The next question will come from Nathan Stein with Deutsche Bank. Please go ahead.
Speaker #1: Nathan Stein with Deutsche Bank. Please go ahead.
Speaker #10: Hey, everyone. Good evening. One of your larger peers suggested on their earnings call a couple of weeks ago that we're in the third inning of the broader capital market cycle.
Nathan Stein: Hey, everyone, good evening. One of your larger peers suggested on their earnings call a couple weeks ago, we're in the third inning of the broader capital market cycle. So this comment constitutes more than just advisory revenues, but I think that caught some folks by surprise just because it's that still seems rather early. Wanted to ask you guys your thoughts on that and what inning you see us being in for the broader, call it, advisory cycle.
Nathan Stein: Hey, everyone, good evening. One of your larger peers suggested on their earnings call a couple weeks ago, we're in the third inning of the broader capital market cycle. This comment constitutes more than just advisory revenues, but I think that caught some folks by surprise just because it's that still seems rather early. Wanted to ask you guys your thoughts on that and what inning you see us being in for the broader, call it, advisory cycle.
Speaker #10: So, this comment constitutes more than just advisory revenues. But I think that caught some folks by surprise, just because it still seems rather early.
Speaker #10: Wanted to address wanted to ask you guys your thoughts on that and what inning you see us being in for the broader call it advisory
Speaker #10: cycle. Well, when you say
Scott Adelson: Well, when you say advisory cycle, means different things to different people, right? Because our bull-bear business makes it... When you just say advisory, I'm not-
Scott Adelson: Well, when you say advisory cycle, means different things to different people. Because our bull-bear business makes it... When you just say advisory, I'm not-
Speaker #6: advisory cycle, it means different things to different people. Right? Because our bull bear business makes it mix makes that when you just say advisory, I'm not quite sure.
Lindsey Alley: I think M&A capital.
James Alley: I think M&A capital.
Scott Adelson: If you're talking about M&A-
Scott Adelson: If you're talking about M&A-
Speaker #6: talking about M&A, I'm just going to go. If you're
Nathan Stein: Yeah.
Nathan Stein: Yeah.
Scott Adelson: I was gonna go.
Scott Adelson: I was gonna go.
Nathan Stein: Sorry. I mean-
Nathan Stein: Sorry. I mean-
Speaker #10: Sorry. I mean. M&A
Speaker #6: It should be talking about M&A.
Scott Adelson: Assuming you're talking about M&A.
Scott Adelson: Assuming you're talking about M&A.
Nathan Stein: M&A specifically within the Corporate Finance.
Speaker #10: specific. M&A specifically. And within the
Nathan Stein: M&A specifically within the Corporate Finance.
Speaker #10: corporate finance business. Got it.
Scott Adelson: Got it. I do agree with that. I mean, I agree it's very early innings. I mean, third inning is as good a number. I mean, I don't think we're in the first, and we're definitely not in the fifth or sixth, so yeah, third, fourth, something like that. Third, actually, third feels even better as I think about it.
Scott Adelson: Got it. I do agree with that. I mean, I agree it's very early innings. I mean, third inning is as good a number. I mean, I don't think we're in the first, and we're definitely not in the fifth or sixth, so yeah, third, fourth, something like that. Third, actually, third feels even better as I think about it.
Speaker #6: I do agree with that. I mean, I agree it's very early innings. I mean, third inning is as good a number as I mean, I don't think we're in the first.
Speaker #6: And we're definitely not in the fifth or sixth. So, yeah, third, fourth, something like that. Actually, third feels even better, I think about it.
Lindsey Alley: And I think,
James Alley: I think,
Speaker #6: It feels early. There is an enormous amount of pent-up demand.
Scott Adelson: It feels early. There's an enormous amount of pent-up demand. I mean,
Scott Adelson: It feels early. There's an enormous amount of pent-up demand. I mean,
Speaker #6: mean, keep going. Yeah.
Lindsey Alley: Yeah, and for... Go ahead.
James Alley: Yeah, and for... Go ahead.
Speaker #9: And for.
Scott Adelson: All of that, yeah, that everybody has talked about and read about and everybody's backlogs that have been on hold, that still exists. It has been picking up, but there is still a tremendous amount of pent-up demand out there.
Speaker #6: All of that that everybody has talked about and read about, and everybody's backlogs that have been on hold, that still exists. It has been picking up.
Scott Adelson: All of that, yeah, that everybody has talked about and read about and everybody's backlogs that have been on hold, that still exists. It has been picking up, but there is still a tremendous amount of pent-up demand out there.
Speaker #6: But there is still a tremendous amount of pent-up demand out there.
Speaker #6: there. And following up
Nathan Stein: And following up on that, if when I was looking at 2025 calendar year industry M&A data, it shows, call it the middle market and below size deals, stable, down slightly, up slightly, you know, versus the year before. So really just consistent with the broader messaging of almost everyone who's just very excited about the upper middle market space and below. I just wanted to, I guess, gauge how you guys are thinking about, like, anything you guys can do to kinda capitalize on what could be, like, a really strong next couple of years, in terms of, in terms of, you know, just being... Well, anyway, I, I think I'm just asking, like, do you guys agree with that statement, and how prepared do you feel for the cyclical rebound?
Nathan Stein: Following up on that, if when I was looking at 2025 calendar year industry M&A data, it shows, call it the middle market and below size deals, stable, down slightly, up slightly, versus the year before. Really just consistent with the broader messaging of almost everyone who's just very excited about the upper middle market space and below. I just wanted to, I guess, gauge how you guys are thinking about, like, anything you guys can do to capitalize on what could be, like, a really strong next couple of years, in terms of, in terms of, just being... Well, anyway, I, I think I'm just asking, like, do you guys agree with that statement, and how prepared do you feel for the cyclical rebound?
Speaker #10: On that, when I was looking at 2025 calendar year industry M&A data, it shows, call it the middle market and below, it feels stable—down slightly, up slightly.
Speaker #10: Versus the year before, so really just consistent with the broader messaging of almost everyone who's just very excited about the upper middle market space and below.
Speaker #10: Katie, I just wanted to, I guess, gauge how you guys are thinking about anything you guys can do to kind of capitalize on what could be a really strong next couple of years in terms of just being well, anyway, I think I'm just asking do you guys agree with that statement?
Speaker #10: And how prepared do you feel for the cyclical
Speaker #10: rebound? Yeah.
Scott Adelson: Yeah, I do agree with this statement, and I do think that many of the things that we have done are positioning ourselves to be, continue to be even better positioned to take advantage of it, and that is why we continue to take share in that marketplace and have for quite a while, and intend to for quite a while, to the best of our ability. And that is through this continuing subsectorization, just knowing more about sectors and doing more deals in sectors, giving us more knowledge than other people. The growth in our Capital Solutions group, being able to provide a broader array of services and helping people evaluate how they want to seek liquidity.
Scott Adelson: Yeah, I do agree with this statement, and I do think that many of the things that we have done are positioning ourselves to be, continue to be even better positioned to take advantage of it, and that is why we continue to take share in that marketplace and have for quite a while, and intend to for quite a while, to the best of our ability. That is through this continuing subsectorization, just knowing more about sectors and doing more deals in sectors, giving us more knowledge than other people. The growth in our Capital Solutions group, being able to provide a broader array of services and helping people evaluate how they want to seek liquidity.
Speaker #6: I do agree with this statement. And I do think that many of the things that we have done are positioning ourselves to continue to be even better positioned to take advantage of it.
Speaker #6: And that is why we continue to take share in that marketplace and have for quite a while. And intend to for quite a while, to the best of our ability.
Speaker #6: And that is through this continuing subsectorization just knowing more about sectors and doing more deals in sectors giving us more knowledge than other people.
Speaker #6: But the growth in our Capital Solutions Group—being able to provide a broader array of services and helping people evaluate how they want to seek liquidity.
Speaker #6: I mean, the global reach continues to expand. So that we are able to that much better be able to service our clients. I mean, the list goes on and on.
Scott Adelson: I mean, the global reach continues to expand so that we are able to that much better be able to service our clients. I mean, the list goes on and on. But I'm starting to sound just like a pitch on it, but the reality of the matter is that those are all things we are constantly working on. So yes, we do, we're well positioned for it.
I mean, the global reach continues to expand so that we are able to that much better be able to service our clients. I mean, the list goes on and on. I'm starting to sound just like a pitch on it, but the reality of the matter is that those are all things we are constantly working on. Yes, we do, we're well positioned for it.
Speaker #6: But I'm sorry—I sound just like a pitch on it. But the reality of the matter is that those are all things we are constantly working on.
Speaker #6: So yes, we do. We're well positioned for it.
Lindsey Alley: I would add that, you know, it's not lost on us that large cap M&A has come out faster and more aggressively than middle market M&A. Frankly, we don't. For us, we don't think about it that way. We are going to grow with the markets, but the sizzle is market share. We believe we continue to take market share in the middle market every single year, regardless of whether the market is up or the market is down. We don't think. We think it's increasingly harder to compete with our business model and the size of our platform, and that's the story. It's not what the M&A markets are doing and whether they're up or whether they're down.
Speaker #9: And I would add that it's not lost on us that large-cap M&A has come out faster and more aggressively than middle-market M&A.
James Alley: I would add that, you know, it's not lost on us that large cap M&A has come out faster and more aggressively than middle market M&A. Frankly, we don't. For us, we don't think about it that way. We are going to grow with the markets, but the sizzle is market share. We believe we continue to take market share in the middle market every single year, regardless of whether the market is up or the market is down. We don't think. We think it's increasingly harder to compete with our business model and the size of our platform, and that's the story. It's not what the M&A markets are doing and whether they're up or whether they're down.
Speaker #9: And frankly, for us, we don't think about it that way. We are going to grow with the markets. But the sizzle is market share.
Speaker #9: We believe we continue to take market share in the middle market every single year, regardless of whether the market is up or the market is down.
Speaker #9: We don't think—we think it's increasingly harder to compete with our business model and the size of our platform. And that's the story. It's not what—they're down.
Speaker #9: M&A markets are doing and whether they're up or whether And it doesn't matter what the large cap space is doing and whether it's up or whether it's down.
Lindsey Alley: It doesn't matter what the large cap space is doing and whether it's up or whether it's down. I mean, I think we are quite focused on the area that we've been focused on for decades. Come rain or storm, we are going to continue to take market share, and that story is not gonna end.
It doesn't matter what the large cap space is doing and whether it's up or whether it's down. I mean, I think we are quite focused on the area that we've been focused on for decades. Come rain or storm, we are going to continue to take market share, and that story is not gonna end.
Speaker #9: I mean, I think we are quite focused on the area that we've been focused on for decades. And come rain or storm, we are going to continue to take market share.
Speaker #9: And that story is not
Speaker #9: going to end. And just a
Scott Adelson: And just a reminder, that large cap is 1% of the volume, right? I mean, it's 98% to 99% of all the M&A volume around the world is midcap.
Scott Adelson: Just a reminder, that large cap is 1% of the volume, I mean, it's 98% to 99% of all the M&A volume around the world is midcap.
Speaker #6: Reminder that large cap is 1% of the volume, right? I mean, 98 to 99% of all the M&A volume around the world is big.
Speaker #6: cap. Okay.
Alex Bond: Okay.
Nathan Stein: Okay.
Nathan Stein: Hello?
Hello?
Operator: This will... Nathan, your line may be muted.
Operator: This will... Nathan, your line may be muted.
Speaker #1: Nathan, your line may be, 'Hello.'
Speaker #1: muted. No, that's all
Nathan Stein: No, that's all. Those were my two questions, so I appreciate it. Thanks, guys.
Nathan Stein: No, that's all. Those were my two questions, so I appreciate it. Thanks, guys.
Speaker #10: That's it. Those are my two questions. So I appreciate it. Thanks, guys.
Speaker #6: Thanks. Thanks. Appreciate
Lindsey Alley: Thanks.
James Alley: Thanks.
Scott Adelson: Thanks, appreciate it.
Scott Adelson: Thanks, appreciate it.
Speaker #6: it.
Operator: This will conclude our question and answer session. I would like to turn the conference back over to Scott Adelson for any closing remarks.
Operator: This will conclude our question and answer session. I would like to turn the conference back over to Scott Adelson for any closing remarks.
Speaker #1: This will conclude our question-and-answer session. I would like to turn the conference back over to Scott Adelson for any closing remarks.
Speaker #1: remarks. I want to
Scott Adelson: I want to thank you all for participating in our Q3 fiscal 2026 earnings call. We look forward to updating everyone on our progress when we discuss our Q4 and full year results for the fiscal 2026 this spring. Thank you.
Scott Adelson: I want to thank you all for participating in our Q3 fiscal 2026 earnings call. We look forward to updating everyone on our progress when we discuss our Q4 and full year results for the fiscal 2026 this spring. Thank you.
Speaker #11: Thank you all for participating in our third quarter fiscal 2026 earnings call. We look forward to updating everyone on our progress when we discuss our fourth quarter and full year results for fiscal 2026 this spring.
Speaker #11: Thank
Speaker #11: You. The conference is now concluded.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.