Q1 2027 Houlihan Lokey Inc Earnings Call

July 29, 2026

Operator 2: Good day, ladies and gentlemen. Thank you for standing by. Welcome to Houlihan Lokey's Q1 Fiscal Year 2027 Earnings Conference Call. At this time, all participants are in a listen-only mode. Question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, 29 July 2026. I would now like to turn the call over to the company.

Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to Houlihan Lokey's Q1 Fiscal Year 2027 Earnings Conference Call. At this time, all participants are in a listen-only mode. Question and answer session will follow the formal presentation. Please note that this conference call is being recorded today, 29 July 2026. I would now like to turn the call over to the company.

Speaker #2: formal presentation. Please note that this conference call is being recorded today, July 29th, 2026. I would now like to turn the call over to the company.

Speaker #2: you, operator, and hello, everyone. By now, everyone should have access to our first quarter fiscal year 2027 earnings release, which can be found on the HOULIHAN LOKEY website at www.hl.com/in the investor relations section.

[Company Representative] (Houlihan Lokey): Thank you, operator, and hello, everyone. By now, everyone should have access to our Q1 fiscal year 2027 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 which 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: 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.

Speaker #2: 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: We encourage investors to review our regulatory filings, including the Form 10-Q for the quarter ended June 30, 2026, when it is filed with the SEC.

[Company Representative] (Houlihan Lokey): We encourage investors to review our regulatory filings, including the Form 10-Q for the quarter ended 30 June 2026, 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 non-GAAP financial measures are not intended to be considered in isolation from, as a substitute for, or as more important than the financial information prepared and presented in accordance with GAAP. In addition, these non-GAAP measures have limitations in that they do not reflect all the items associated with the company's results of operations as determined 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.

Speaker #2: 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 non-GAAP financial measures are not intended to be considered in isolation from, as a substitute for, or as more important than the financial information prepared and presented in accordance with GAAP.

Speaker #2: In addition, these non-GAAP measures have limitations in that they do not reflect all the items associated with the company's results of operations as determined in accordance with GAAP.

Speaker #2: 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.

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 then we will open the call to questions.

[Company Representative] (Houlihan Lokey): 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. Then we will open the call to questions. With that, I'll turn the call over to Scott.

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

Speaker #3: Thank you, Christopher. Welcome, everyone, to our first quarter fiscal 2027 earnings call. We ended the quarter with revenues of $511 million and adjusted earnings per share of $1.35.

Scott Adelson: Thank you, Christopher. Welcome everyone to our Q1 fiscal 2027 earnings call. We ended the quarter with revenues of $511 million and adjusted earnings per share of $1.35. We are disappointed with these quarterly results. We believe the results are a temporary disruption and not a fundamental resetting of our outlook. Overall, our Financial and Valuation Advisory business performed well. Our Financial Restructuring business generally performed as expected, but our Corporate Finance business results suffered. On our Q4 call, we identified several macro factors that were beginning to impact Corporate Finance, namely the knock-on effects of the war in the Middle East and the disruption in the software sector as companies and the markets consider the potential long-term effects of AI.

Speaker #3: We are disappointed with these quarterly results. But believe the results are a temporary disruption and not a fundamental resetting of our outlook. Overall, our financial and valuation advisory business performed well.

Speaker #3: Our financial restructuring business generally performed as expected, but our corporate finance business results suffered. On our fourth quarter call, we identified several macro factors that were beginning to impact corporate finance, namely the knock-on effects of the war in the Middle East.

Speaker #3: And the disruption in the software sector, as companies and the markets consider the potential long-term effects of AI. Headwinds that started in February and March persisted into April and May, as deal momentum slowed.

Scott Adelson: Headwinds that started in February and March persisted into April and May as deal momentum slowed, specifically in consumer-facing sectors that are particularly sensitive to inflation and consumer sentiment, and software, as reduced valuations meant many technology deals were reassessed. As a result, a significant number of transactions that were expected to close in the quarter are delayed into subsequent quarters. These delays disproportionately affected larger fee transactions. While our transaction volume was more or less the same year over year, our business mix was weighted more heavily towards lower fee advisory products. Notably, the vast majority of delayed transactions continue to move through the pipeline, but timelines remain extended. We have seen market disruptions like this in the past, and like others, we expect this one to be temporary.

Speaker #3: Specifically in consumer-facing sectors that are particularly sensitive to inflation and consumer sentiment, and in software, as reduced valuations meant many technology deals were reassessed. As a result, a significant number of transactions that were expected to close in the quarter were delayed into subsequent quarters.

Speaker #3: These delays disproportionately affected larger fee transactions. So while our transaction volume was more or less the same year over year, our business mix was weighted more heavily towards lower fee advisory products.

Speaker #3: Notably, the vast majority of delayed transactions continued to move through the pipeline, but timelines remain extended. We have seen market disruptions like this in the past, and, like others, we expect this one to be temporary.

Speaker #3: We are encouraged by the fact that public market valuations remain strong, and both new business activity and backlog in CF are at record levels.

Scott Adelson: We are encouraged by the fact that public market valuations remain strong. Both new business activity and backlog in CF are at record levels. We see no meaningful change in the typical rates of dead or on-hold deals. It is these metrics and others that provide us with the confidence of our comments. It is not, however, a call on when the broader middle market M&A environment will normalize. The macro uncertainties that persist, particularly around the situation in the Middle East, create enough headwinds to make it difficult to predict when we will return to typical market conditions. Financial Restructuring performed generally in line with our expectations and is expected to have a solid year.

Speaker #3: And we see no meaningful change in the typical rates of debt or on-hold deals. It is these metrics and others that provide us with the confidence of our comments.

Speaker #3: It is not, however, a call on when the broader middle market M&A environment will normalize. The macro uncertainties that persist, particularly around the situation in the Middle East, create enough headwinds to make it difficult to predict when we will return to typical market conditions.

Speaker #3: Financial restructuring performed generally in line with our expectations and is expected to have a solid year. Consistent with our views at the beginning of the year.

Scott Adelson: Consistent with our views at the beginning of the year, we continue to see strong activity levels in our restructuring business amid continued volatility in the energy market and dislocation in both private credit and the software sector. Financial and Valuation Advisory produced a strong quarter, with growth across all three service lines, underscoring the general health of the economy and FVA's balanced business model across industry and transaction size. We're optimistic this business will continue to grow as we invest in more sophisticated data tools and offerings for our clients, further differentiating us from our smaller competitors. Our collaboration with Morningstar, which was announced last quarter, to establish a jointly branded industry benchmark for the fast-growing CLO market is one example of this. In Q1, we announced the acquisition of Intrepid Financial Partners, a premier independent investment bank specializing in the energy sector.

Speaker #3: We continue to see strong activity levels in our restructuring business amid continued volatility in the energy market and dislocation in both private credit and the software sector.

Speaker #3: Financial and valuation advisory produced a strong quarter with growth across all three service lines, underscoring the general health of the economy and FDA's balanced business model across industry and transaction size.

Speaker #3: We're optimistic this business will continue to grow as we invest in more sophisticated data tools and offerings for our clients. Further differentiating us from our smaller competitors.

Speaker #3: Our collaboration with Morningstar, which was announced last quarter to establish a jointly branded industry benchmark for the fast-growing CLO market, is one example of this.

Speaker #3: In Q1, we announced the acquisition of Intrepid Financial Partners, a premier independent investment bank specializing in the energy sector. We're excited about the momentum this combination is already bringing to our energy business.

Scott Adelson: We're excited about the momentum this combination is already bringing to our energy business. The acquisition, which we expect to close by end of Q2, will add 32 colleagues to the firm. As we've said over the last several quarters, our acquisition pipeline remains as busy as ever. In addition, we hired 3 new managing directors in the quarter, and we continue to see a robust market for senior talent, which we will continue to capitalize on strategically as we diversify and expand into underweighted industry sectors, geographies, and product lines. Despite a challenging Q1 in Corporate Finance, we remain confident in the continued growth in our business over the coming years. We have built a diversified global business that has repeatedly shown a remarkable ability to adapt and to thrive in a range of market conditions.

Speaker #3: The acquisition, which we expect to close by the end of the second fiscal quarter, will add 32 colleagues to the firm. As we've said over the last several quarters, our acquisition pipeline remains as busy as ever.

Speaker #3: In addition, we hired three new managing directors in the quarter, and we continue to see a robust market for senior talent, which we will continue to capitalize on strategically as we diversify and expand into underweighted industry sectors, geographies, and product lines.

Speaker #3: Despite a challenging first quarter in corporate finance, we remain confident in the continued growth of our business over the coming years. We have built a diversified, global business that has repeatedly shown a remarkable ability to adapt and thrive in a range of market conditions.

Speaker #3: And we remain committed to our goal of delivering consistent long-term growth for our shareholders, clients, and employees. And with that, I will turn it over to Lindsey.

Scott Adelson: We remain committed to our goal of delivering consistent long-term growth for our shareholders, clients, and employees. With that, I will turn it over to Lindsey.

Speaker #2: Thank you, Scott. Revenues in corporate finance were $303 million for the quarter, down 24% compared to the same period last year. We closed $127 transactions this quarter, basically flat with the same period last year.

Lindsey Alley: Thank you, Scott. Revenues in Corporate Finance were $303 million for the quarter, down 24% compared to the same period last year. We closed 127 transactions this quarter, basically flat with the same period last year. However, our average transaction fee on closed deals decreased significantly. As Scott mentioned, deal timelines have extended and disproportionately affected our larger fee deals in Q1. Client mix between sponsor and non-sponsor work has been stable, and we have seen relatively more softness in our European business than in the US since Q4 of last year. Deal closings may remain uneven in the near term as macro events could continue to affect the timing of transactions. What gives us confidence over the medium term is that our backlog, pipeline, and new mandate activity have not deteriorated like what we have seen in recessionary markets.

Speaker #2: However, our average transaction fee on closed deals decreased significantly. As Scott mentioned, deal timelines have extended and disproportionately affected our larger fee deals in the first quarter.

Speaker #2: Client mix between sponsor and non-sponsor work has been stable, and we have seen relatively more softness in our European business than in the US since the fourth quarter of last year.

Speaker #2: Deal closings may remain uneven in the near term as macro events could continue to affect the timing of transactions. What gives us confidence over the medium term is that our backlog, pipeline, and new mandate activity have not deteriorated like what we have seen in recessionary markets.

Speaker #2: Financial restructuring revenues were $119 million for the quarter, generally in line with our expectations. We closed $23 transactions this quarter, down 34% from the same period last year, but our average transaction fee on closed deals increased.

Lindsey Alley: Financial Restructuring revenues were $119 million for the quarter, generally in line with our expectations. We closed 23 transactions this quarter, down 34% from the same period last year, but our average transaction fee on closed deals increased. For Financial and Valuation Advisory, revenues were $89 million for the quarter, a 13% increase from the same period last year. We had 1,042 fee events during the quarter, compared to 957 in the same period last year, a 9% increase. FVA is benefiting from strong deal momentum in the large cap space while experiencing some of the same headwinds we are seeing in midcap M&A. Turning to expenses. Our adjusted compensation expense ratio for Q1 in both fiscal 2027 and 2026 remained constant at 61.5%. We expect to maintain our long-term target of 61.5% for our adjusted compensation expense ratio for fiscal 2027.

Speaker #2: For financial and valuation advisory, revenues were $89 million for the quarter, a 13% increase from the same period last year. We had $1,042 fee events during the quarter, compared to $957 in the same period last year, a 9% increase.

Speaker #2: FDA is benefiting from strong deal momentum in the large cap space, while experiencing some of the same headwinds we are seeing in mid-cap M&A.

Speaker #2: Turning to expenses, our adjusted compensation expense ratio for the first quarter in both fiscal 2027 and 2026 remained constant at 61.5%. We expect to maintain our long-term target of 61.5% for our adjusted compensation expense ratio for fiscal 2027.

Speaker #2: Our adjusted non-compensation expenses grew 6% to $100 million for the quarter, compared to $94 million for the same period last year. For the full fiscal year, we expect to see our non-compensation expense growth similar to last year's growth.

Lindsey Alley: Our adjusted non-compensation expenses grew 6% to $100 million for the quarter, compared to $94 million for the same period last year. For the full fiscal year, we expect to see our non-compensation expense growth similar to last year's growth. Our adjusted effective tax rate for the quarter was 13%, compared to -1% for the same quarter last year. The increase was primarily a result of lower stock-based tax benefits from our annual May vesting of compensation-related stock. We expect to see a fiscal 2027 full-year adjusted effective tax rate of between 26% and 28%. In our Q1, we issued approximately 1.3 million shares to employees as part of our fiscal 2026 year-end compensation, and we repurchased approximately 1.1 million shares. About 800,000 shares through withhold to cover and 300,000 shares as part of our share repurchase program.

Speaker #2: Our adjusted effective tax rate for the quarter was 13%, compared to negative 1% for the same quarter last year. The increase was primarily a result of lower stock-based tax benefits from our annual May vesting of compensation-related stock.

Speaker #2: We expect to see a fiscal 2027 full-year adjusted effective tax rate of between 26% and 28%. In our first quarter, we issued approximately 1.3 million shares to employees as part of our fiscal 2026 year-end compensation.

Speaker #2: And we repurchased approximately $1.1 million shares, about $800,000 shares through withhold to cover, and $300,000 shares as part of our share repurchase program. And with that, operator, we can open the line for questions.

Lindsey Alley: With that, operator, we can open the line for questions.

Speaker #1: We will now begin the question and answer session. To ask a question, you may press star and then one on your touchstone telephones. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys.

Operator 2: We will now begin the question-and-answer session. To ask a question, you may press star and then one on your touch-tone telephones. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys. To withdraw your questions, you may press star and two. Again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question today comes from Brennan Hawken from BMO Capital Markets. Please go ahead with your question.

Operator: We will now begin the question-and-answer session. To ask a question, you may press star and then one on your touch-tone telephones. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys. To withdraw your questions, you may press star and two. Again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question today comes from Brennan Hawken from BMO Capital Markets. Please go ahead with your question.

Speaker #1: To withdraw your questions, you may press star and two. Again, that is star and then one. To join the question queue. We'll pause momentarily to assemble the roster.

Speaker #1: In our first question today, it comes from Brennan Hawken from BMO Capital Markets. Please go ahead with your question.

Speaker #4: Good afternoon, Scott. Good afternoon, Lindsey. How are you?

Brennan Hawken: Good afternoon, Scott. Good afternoon, Lindsey. How are you?

Speaker #3: Hey, Brennan.

Scott Adelson: Hey, Brennan.

Lindsey Alley: Hey, Brennan.

Speaker #4: Scott, you spoke to the adaptability in the business, and totally appreciate that you don't want to do anything rash here just because current environments aren't great.

Brennan Hawken: Scott, you spoke to the adaptability in the business, and totally appreciate that you don't want to do anything rash here just because current environments aren't great. Do you think that there's some ability you have to make an adjustment to do something about the challenging environment, and these extended timelines? Is this just something you have to wait out?

Speaker #4: But do you think that there's some ability you have to make an adjustment to do something about the challenging environment and these extended timelines?

Speaker #4: Or is this just something you have to wait out?

Speaker #3: You know, that's a great question. Thanks, Brennan. The answer is, we are constantly doing things to attempt to improve the business. I mean, that kind of process improvement, if you will, is something that has always been part of our culture.

Scott Adelson: It's a great question. Thanks, Brennan. The answer is we are constantly doing things to attempt to improve the business. I mean, that kind of process improvement, if you will, is something that has always been part of our culture. Much of this is things that are driven by our clients, not by us, and their willingness to move things forward. Some of it is where you have deals not moving through in a process fashion and more of a one-off fashion, and the timing of some of that can be less predictable, I would say, as well as the fact that you have a new set of broader alternatives that people have today that really the market has adapted to. Some of that has elongated that timeframe. We do think that most of it, though, is driven by what we have talked about.

Speaker #3: Much of this is things that are driven by our clients, not by us. And they're willingness to move things forward. Some of it is where you have deals not moving through in a process fashion and more of a one-off fashion than the timing of some of that can be less predictable, I would say, and as well as the fact that you have a new set of broader alternatives that people have today that have really the market is adapted to.

Speaker #3: And some of that has elongated that timeframe. We do think that most of it, though, is driven by what we have talked about.

Speaker #4: Got it. Okay. And if these sort of challenging market conditions extend, at some point, does it begin to threaten your ability to hold the 61.5% comp ratio?

Brennan Hawken: Got it. Okay. If these sort of challenging market conditions extend, at some point, does it begin to threaten your ability to hold the 61.5% comp ratio? Or do you feel as though that's still secure and something that you're able to sustain?

Speaker #4: Or do you feel as though that's still secure and something that you're able to sustain?

Speaker #3: You've heard us joke about it—that it's engraved in our floors, right? It existed long before we were public. We had a very constant comp ratio.

Scott Adelson: You've heard us joke about it, that it's engraved on our floors, right? It existed long before we were public. We had a very constant comp ratio. See no reason that that would change. As we said in our comments, we do believe that this is something that is an anomaly. That doesn't necessarily mean it completely reverts next quarter or whatever the case may be, but we feel very good about the year overall and just looking forward.

Speaker #3: You see no reason that that would change and, I mean, we as we said in our comments, we do believe that this is a something that is an anomaly, that doesn't necessarily mean it completely reverts next quarter or whatever the case may be, but we feel very good about the year overall and just looking forward.

Speaker #4: Okay. Thanks for taking my questions.

Brennan Hawken: Okay. Thanks for taking my questions.

Speaker #3: Appreciate it, Brennan.

Scott Adelson: Appreciate it, Brennan.

Speaker #1: Our next question comes from Devon Ryan from Citizens Bank. Please go ahead with your question.

Operator 2: Our next question comes from Devin Ryan from Citizens JMP. Please go ahead with your question.

Operator: Our next question comes from Devin Ryan from Citizens JMP. Please go ahead with your question.

Speaker #4: Hey, this is Noah Katz on for Devon. Thank you guys for taking my questions. So to start, I think we should dive a bit deeper on the middle market M&A environment broadly.

Noah Katz: Hey, this is Noah Katz on for Devin. Thank you guys for taking my questions. To start, I think we should dive a bit deeper on the middle market M&A environment broadly. Over the past several quarters, activity has generally improved from the lows, although the pace of recovery has remained uneven. As you guys look at client engagement and transaction discussions today relative to a few months ago, do you feel conditions are continuing to improve? Are there particular areas where you see more encouraging signs of activity? Thanks.

Speaker #4: Over the past several quarters, activity has generally improved from the lows, although the pace of recovery has remained uneven. As you guys look at client engagement and transaction discussions today relative to a few months ago, do you feel conditions are continuing to improve and are there particular areas where you see more encouraging signs of activity?

Speaker #4: Thanks.

Speaker #3: Yeah. I think that we have talked about that in the past. We do see things continuing to improve from a new mandate perspective, from the types of things that we are signing up, even more importantly for the percentage of deals that are going into market.

Scott Adelson: Yeah, I think that we have talked about that in the past. We do see things continuing to improve from a new mandate perspective, from the types of things that we are signing up. Even more importantly, from the percentage of deals that are going into market. All of those trends are in the right direction, and positive. We would agree, when you look at the closed deals in the middle market, obviously those numbers have not been great recently, when talking about broader market as well as us obviously in this quarter.

Speaker #3: All of those trends are in the right direction. And positive. So we would agree when you look at the closed deals in the middle market, obviously, those numbers have been not been great recently.

Speaker #3: When talking about broader market as well as us, obviously, in this quarter.

Speaker #4: Got it. Thank you for that. And then, as a quick follow-up on the international business—you've continued to invest in the platform globally, and international markets have become an increasingly important component of the business.

Noah Katz: Got it. Thank you for that. As a quick follow-up on the international business, you've continued to invest in the platform globally, and international markets have become an increasingly important component of the business. As you look across Europe, Asia, and other regions today, where are you seeing the strongest transaction activity, and where does the environment remain a bit more mixed?

Speaker #4: As you look across Europe, Asia, and other regions today, where are you seeing the strongest transaction activity and where does the environment remain a bit more mixed?

Speaker #3: Yeah. So if you look just at this it depends what timeframe you're asking about. If you're talking about this quarter, that we're reporting on, it was stronger in the US than it was in Europe or Asia.

Scott Adelson: Yeah, it depends what timeframe you're asking about. If you're talking about this quarter that we're reporting on, it was stronger in the US than it was in Europe or Asia. If you go back to last year, we had stronger growth in Europe and in Asia than we did in the US. It varies from quarter to quarter.

Speaker #3: If you go back to last year, we had stronger growth in Europe and in Asia than we did in the U.S., so it varies from quarter to quarter.

Speaker #4: Okay. Thank you guys.

Noah Katz: Okay. Thank you guys.

Speaker #3: Sure thing. Thanks so much.

Scott Adelson: Sure thing. Thanks so much.

Speaker #1: Our next question comes from James Yarrow from Goldman Sachs. Please go ahead with your question.

Operator 2: Our next question comes from James Yaro from Goldman Sachs. Please go ahead with your question.

Operator: Our next question comes from James Yaro from Goldman Sachs. Please go ahead with your question.

Speaker #5: Hi. Thank you guys so much for taking the question. This is Matthew in for James. Hi. Thank you so much. So I just want to relay dive deeper into the broader M&A cycle.

[Analyst] (Goldman Sachs): Hi. Thank you guys so much for taking the question. This is Matthew in for James. Hi. Thank you so much. I just want to really dive deeper into the broader M&A cycle. You guys mentioned you guys are seeing activities starting to come back in the mid-market space. Overall, where do you guys think that we are in the M&A cycle today, and how long can it continue to grow from here?

Speaker #5: You guys mentioned you guys are seeing activities starting to come back in the mid-market space. But overall, what do you guys think that we are in the M&A cycle today, and how long can it continue to grow from here?

Speaker #4: Yeah. Clearly, they did has been described, and I wouldn't disagree, as and this is the M&A market overall is K-shaped, right? The large-cap deals have been happening obviously a very strong rate, and a number of our public peers have done quite well.

Scott Adelson: Yeah. Clearly it has been described, and I wouldn't disagree, the M&A market overall is K-shaped, right? The large cap deals have been happening at obviously a very strong rate, and a number of our public peers have done quite well. The mid-cap market has really not returned yet to normal. I would say the party's been going on for a while in large cap, and the party either hasn't started or is just about to start on the mid-cap side.

Speaker #4: The mid-cap market has really not returned yet to normal, I would say. The party's been going on for a while, and large-cap and the party is either hasn't started or is just about to start on the mid-cap side.

Speaker #3: Yeah. I mean, I'd say over the last few quarters, we have said pretty clearly we're in the early innings in the mid-cap cycle. I think last quarter, think of it as a rain delay.

Lindsey Alley: Yeah, I'd say over the last few quarters, we have said pretty clearly we're in the early innings in the mid-cap cycle. I think last quarter, think of it as a rain delay. We're still in those early innings. As Scott said it best, the large cap space has done extremely well. We're seeing it a little bit in our FVA business. The macro events of really the last few months have had a small impact on our Q4 and a bigger impact on our Q1. We, for all the reasons Scott suggested, I look at that as a delay as opposed to anything structural at all.

Speaker #3: And we're still in those early innings. I mean, as Scott said it best, the large-cap space has done extremely well. We're seeing it a little bit in our F&A business.

Speaker #3: And the macro events over the last few months have had a small impact on our Q4 and a bigger impact on our Q1.

Speaker #3: But we, for all the reasons Scott suggested, look at that as a delay as opposed to anything structural at all.

Speaker #5: Yeah. Thank you. That makes a lot of sense. Rain delay is a great analogy. And just to follow up on the restructuring, outlook, so you guys mentioned restructuring activities has continued to be strong in the quarter as you guys expect.

[Analyst] (Goldman Sachs): Yeah. Thank you. That makes a lot of sense. Rain delay is a great analogy. Just to follow up on the restructuring outlook. You guys mentioned restructuring activities has continued to be strong in the quarter as you guys expect. How much further, in your view, can restructuring improve? Could the software and private credit issues catalyze this, and over what timeframe?

Speaker #5: How much further in your view can restructuring improve? And could the software and private credit issues catalyze this and over what timeframe?

Speaker #4: Yeah. So the answer

Scott Adelson: Yeah. The answer is yes. We are continuing to see opportunities increase in restructuring. Obviously, there's delays. It takes time for those deals to work their way through the pipeline, but continues to increase. Software has certainly been one of the drivers of that. Certainly not the only driver. There have been knock-on effects, as we've talked about, from war and other areas that have benefited restructuring. We do, as we've said, and really the only way we've talked about restructuring, is that we expect this year to continue to be at elevated levels. Obviously, if there continues to be trouble in those various sectors or other ones, it can rise above those, I will call it, elevated levels. At this point, we feel good about the outlook for restructuring this year.

Speaker #3: is yes. We are continuing to see opportunities increase in restructuring. Obviously, there's delays it takes time for those deals to work their way through the pipeline.

Speaker #3: But continues to increase. Software is certainly been one of the drivers of that, not certainly not the only driver. There have been knock-on effects as we've talked about from more and other areas that have benefited restructuring.

Speaker #3: And we do, as we've said and really the only way we've talked about restructuring is that we expect this year to continue to be an elevated levels and obviously, if there continues to be trouble in those various sectors or other ones, it can rise above those I will call it elevated levels, but at this point, we feel good about the outlook for restructuring this year.

Speaker #5: Amazing. Thank you so much.

[Analyst] (Goldman Sachs): Amazing. Thank you so much.

Speaker #3: Appreciate it.

Scott Adelson: Appreciate it.

Speaker #1: Our next question comes from Gabrielle Angelini from Bank of America. Please go ahead with your question.

Operator 2: Our next question comes from Gabriel Angelini from Bank of America. Please go ahead with your question.

Operator: Our next question comes from Gabriel Angelini from Bank of America. Please go ahead with your question.

Speaker #6: Hi, good afternoon, and thank you for taking the question. To your point, in terms of the impact of the geopolitical events in the Middle East and sort of the effect on software and first quarter revenues, I think it was one of the weaker first quarters, maybe going back to 2025, in terms of revenue.

Gabriel Angelini: Hi. Good afternoon, and thank you for taking the question. To your point.

Scott Adelson: Yes

Gabriel Angelini: of the impact of the geopolitical events in the Middle East and sort of softness and impact on Q1 revenues, I think it was one of the weaker Q1s, maybe going back to 2005 in terms of revenue. Just want to get a sense for once we have a clearing event, how quickly can this sort of turn back on, I guess sticking with the rain delay analogy, how quickly can the tarp come off the field here if we see a clearing event?

Speaker #6: But just want to get a sense for once we have a clearing event, how quickly can this sort of turn back on, I guess, sticking with the rain delay analogy, how quickly can the tarp come off the field here if we see a clearing event?

Speaker #3: I like the analogy and let's stick with that for a while. So I think that the tarp does come off, but it doesn't come off instantaneously.

Scott Adelson: I like the analogy, and let's stick with that for a while. I think that the tarp does come off, but it doesn't come off instantaneously. I think that's the way to think about it, that it does take a little bit, and you can think about that usually as months or quarters, not years. I think that one of the challenges is every time it hits normal again in the geopolitical environment, we have things like occurred over the last couple of days where the war pops up again. Do they start to take it off, and then it rains again, and they bring it back on? That's, I think, the question mark.

Speaker #3: And I think that's the way to think about it. It does take a little bit, and you can think about that usually as months or quarters, not years.

Speaker #3: And I think that one of the challenges is every time we hits normal again in a geopolitical environment, we have things like occurred over the last couple of days where the war pops up again.

Speaker #3: And so do they start to take it off and then it rains again and they bring it back on? And that's, I think, the question mark.

Speaker #1: Great, thank you. That was very helpful. Maybe one more strategic question. You've previously talked about the big market share opportunity being that sort of 98% of middle market volume that you don't participate in right now.

Gabriel Angelini: Great. Thank you. That was very helpful. Maybe one more strategic question. You've previously talked about the big market share opportunity being that sort of 98% of middle market volume-

Scott Adelson: Yeah

Gabriel Angelini: that you don't participate in right now. I think some of the larger bulge bracket firms are also focused on expanding, particularly in the middle market space. There was an announcement from a bulge bracket that they're going to be hiring in that space. As you think about gaining share, who are the share donors, and is it becoming more competitive in the middle market environment? Thank you.

Speaker #1: But then I think some of the larger bullish bracket firms are also focused on expanding particularly in the middle market space. There was an announcement from a bullish bracket that they're going to be hiring in that space.

Speaker #1: So as you think about gaining share, who are the share donors? And is it becoming more competitive in the middle market environment? Thank you.

Speaker #4: I've been doing this a very long time, and I can tell you that there have been a number of entrants in and out over time in the mid-cap space.

Scott Adelson: I've been doing this a very long time, and I can tell you that there have been a number of entrants in and out over time in the mid-cap space. Very few are enduring in it, and the ones that are enduring in it obviously have seen the growth in the business overall. We have continued to, we believe, take share in that market over time, and we see no reason that that will not continue. That's really the new entrants are historically at least been visitors to the space.

Speaker #4: Very few are enduring in it. And the ones that are enduring in it, obviously, have seen the growth in the business overall. We have continued to, we believe, take share in that market over time.

Speaker #4: And we see no reason that that will not continue. And that's really the new entrants are historically at least been visitors to the space.

Speaker #3: And the other, I think, important way we think about it is the vast majority of our competition in the mid-cap space are smaller boutique firms.

Lindsey Alley: The other, I think, important way we think about it is the vast majority of our competition in the mid-cap space are smaller boutique firms. They're given sort of the success of the Houlihans and some of our larger middle market peers. It is becoming structurally more difficult for boutiques to compete with us. We just have a broader geographic reach. We have more depth in terms of private equity coverage. We're able to invest in technology that the smaller boutiques can't. A lot of those market share gains are just the larger mid-cap firms like Houlihan Lokey taking market share away from smaller boutiques or bringing those smaller boutiques underneath the Houlihan Lokey umbrella and having them thrive.

Speaker #3: And the given sort of the success of the who hands and some of our larger middle market peers, it is becoming structurally more difficult for boutiques to compete with us.

Speaker #3: We just have broader geographic reach. We have more depth in terms of private equity coverage. We're able to invest in scale. And so a lot of those market share gains are just the larger mid-cap firms like Houlihan Lokey taking market share away from smaller boutiques or bringing those smaller boutiques underneath the Houlihan Lokey umbrella and having them thrive.

Speaker #3: And so that, I think, more likely where we're going to take market share versus from a bold bracket firm that moves into the middle market for 15 minutes and then moves back out when the markets change.

Lindsey Alley: That's, I think, more likely where we're going to take market share versus from a bulge bracket firm that moves into the middle market for 15 minutes and then moves back out when the markets change.

Speaker #1: Great. Thank you. Very helpful. Our next question comes from Alex Bond from KBW. Please go ahead with your question.

Gabriel Angelini: Great. Thank you. Very helpful.

Operator 2: Our next question comes from Alex Bond from KBW. Please go ahead with your question.

Operator: Our next question comes from Alex Bond from KBW. Please go ahead with your question.

Speaker #7: Hi. Good afternoon, everyone. Thanks for taking the question.

Alex Bond: Hey, good afternoon, everyone. Thanks for taking the question.

Speaker #5: Hey, Alex.

Scott Adelson: Hey, Alex.

Speaker #7: Hey. Good afternoon. Wondering if you could drill down on the impact of the slowdown in software-related transactions this quarter and maybe what extent that impacted the corporate finance results.

Alex Bond: Hey, good afternoon. Wondering if you could drill down on the impact of the slowdown in software-related transactions this quarter, maybe what extent that impacted the Corporate Finance results, both on the M&A side and in Capital Solutions. Maybe if you could just compare activity levels there relative to the year-ago period. Also curious to the extent you are seeing green shoots within software and any color you can provide on expectations there, specifically through the rest of this fiscal year.

Speaker #7: Both on the M&A side and in capital solutions. And maybe if you could just compare activity levels there relative to the year ago period.

Speaker #7: And then, also curious to the extent you are seeing green shoots within software, and any color you can provide on expectations there, specifically through the rest of this fiscal year.

Lindsey Alley: I'll start and let Scott finish the green shoots comment. Our technology business, and it is technology in total, which we think the bulk of which is software, and I'll give it to you across the firm as opposed to just in Corporate Finance, was down about 54% for the quarter or $53 million in one quarter. Just to give you a sense of how that affected our business in Q1. With respect to green shoots, I think, Scott.

Speaker #3: I'll start and let Scott finish the green shoots comment. So our technology business, and it is technology in total, which we think the bulk of which is software.

Speaker #3: And I'll give it to you across the firm, as opposed to just in Corporate Finance. It was down about 54% for the quarter, or $53 million in one quarter.

Speaker #3: Just to give you a sense of how that affected our business in Q1. And then with respect to green shoots, I think, Scott.

Speaker #5: Yeah. I have an awful lot of client meetings, and it went from everybody believed completely a few quarters ago SaaS apocalypse. It was real.

Scott Adelson: Yeah. I have an awful lot of client meetings, it went from everybody believed completely a few quarters ago, SaaS apocalypse was real. Nobody was ever going to touch another software company again. Clearly today, we're doing financings. We are closing deals in the space. I would say a number of very smart investors have started to understand there is a difference between a good software company and a bad software company, just kind of throwing it all out doesn't make complete sense. We are starting to see a bifurcation, if you will, in the software space.

Speaker #5: Nobody was ever going to touch another software company again. Clearly today, we're doing financings. We are closing deals in the space, I would say, a number of very smart investors have started to understand there is a difference between a good software company and a bad software company.

Speaker #5: And just kind of throwing it all out doesn't make complete sense. So we are starting to see a bifurcation, if you will, in the software space.

Speaker #7: Got it. Okay, great. That's helpful color. And then maybe as a follow-up, just anything to read into the fact that the larger-sized deals—or, I guess, larger fee deals—have been more susceptible to closing delays more recently?

Alex Bond: Got it. Okay, great. That's helpful color. Maybe as a follow-up, just anything to read into the fact that the larger size deals, or I guess larger fee deals, have been more susceptible to closing delays more recently. Is this just simply a result of there being more variables in the equation for these deals, so maybe they're more impacted by volatility or geopolitical uncertainty? Or just any sort of other additional color in terms of how we should be thinking about that.

Speaker #7: Is this just simply a result of there being more variables in the equation for these deals? So maybe they're more impacted by volatility or geopolitical uncertainty or just any sort of other additional color in terms of how we should be thinking about that?

Speaker #3: I think you're really covering it. I mean, to a large extent, it is people saying, let me just get that one more piece of information.

Scott Adelson: I think you're really covering it. To a large extent, it is people saying, Let me just get that one more piece of information. Hey, by the way, what about this? The larger deals, the more they have to ask questions around, right? There's just more complexity of the businesses. It is just dragging out a bit. It is, I would say, something that we have seen before, but that the larger deals, the smaller deals also, people are just more willing to just close and move on.

Speaker #3: Hey, by the way, what about this? And the larger deals, the more they have to ask questions around, right? There's just more complexity of the businesses.

Speaker #3: And so, it is just dragging out a bit. And it is, I would say, something that we have seen before, but with the larger deals—and the smaller deals also—people are just more willing to close and move on.

Speaker #3: Because they're going to make so many operational improvements and things like that.

Alex Bond: Got it.

Alex Bond: Because they're going to make so many operational improvements and things like that.

Scott Adelson: Because they're going to make so many operational improvements and things like that.

Speaker #7: Great. Okay. No, it makes sense. Thank you both for taking the questions.

Alex Bond: Great. Okay. No, it makes sense. Thank you both for taking the questions.

Speaker #4: Pleasure.

Scott Adelson: Pleasure.

Speaker #1: And our next question comes from Steven Chubick from Wolf Research. Please go ahead with your question.

Operator 2: Our next question comes from Steven Chubak from Wolfe Research. Please go ahead with your question.

Operator: Our next question comes from Steven Chubak from Wolfe Research. Please go ahead with your question.

Speaker #6: Hi. This is Sandy on for Steven. I was wondering if you could just speak to your appetite to do deals a bit more challenging revenue backdrop.

[Analyst] (Wolfe Research): Hi, this is Annie on for Steven. I was wondering if you could just speak to your appetite to do deals amid a more challenging revenue backdrop. Are target valuations looking more attractive in the current environment? What are some of the areas where it might make more sense to buy versus build?

Speaker #6: And our target valuation is looking more attractive in the current environment. What are some of the areas where it might make more sense to buy versus build?

Scott Adelson: I missed the very beginning of what you said. I couldn't quite hear it. Could you say the very beginning of that one more time?

Speaker #5: I miss the very beginning of what you said that I couldn't quite hear. Could you say the very beginning of that one more time?

Speaker #6: Yes. I was wondering if you could just speak to your appetite to do deals a bit more challenging revenue backdrop and whether target valuation is more attractive.

[Analyst] (Wolfe Research): Yes. I was wondering if you could just speak to your appetite to do deals amid a more challenging revenue backdrop, and whether target valuations-

Scott Adelson: Oh.

[Analyst] (Wolfe Research): Are more attractive.

Scott Adelson: Sorry. Got it. Thank you. Yeah. From our own M&A perspective, we obviously disclosed the Intrepid deal. As we also stated, we have as strong a pipeline as we ever have, and we're continuing to be as aggressive, if not more so than we have been. We continue to believe in our business exactly the way it is.

Speaker #5: Sorry. I got it. Thank you. Yeah. From our own M&A perspective, we obviously disclosed the intrepid deal. As we also stated, we have as strong a pipeline as we ever have, and we are continuing to be as aggressive if not more so than we have been.

Speaker #5: We continue to believe in our business exactly the way it is.

Speaker #6: Great, thanks so much. And then just for one follow-up—thinking through the long-term impacts from AI on your business, can you speak to how you're thinking through opportunities and threats to your three core businesses?

[Analyst] (Wolfe Research): Great. Thanks so much. Then just for one follow-up. Thinking through the long-term impacts from AI on your business, can you speak to how you're thinking through opportunities and threats to your three core businesses? And specific to the valuations business, how you're handicapping the risk of greater pricing pressure in an AI world?

Speaker #6: And specific to the valuations business, how your handicapping the risk of greater pricing pressure in an AI world?

Speaker #5: Yeah. That's a very I could go on for a very long time. That's a very fulsome question. So thank you for that. We are very much a believer in AI being a meaningful component of our business.

Scott Adelson: Yeah. I could go on for a very long time. That's a very fulsome question, so thank you for that. We are very much a believer in AI being a meaningful component of our business, and we have opted, I would say, for a belief that a 10% improvement is the enemy of a 10X improvement. We are focused on the 10X improvement that we think we can drive by AI. It's a very long conversation, probably not appropriate completely for today, but we are big believers in it, and the improvements it can have on our business. When you talk about valuation, we have said that there are components of our valuation business that we think are, all of our valuation business for that matter, is already a large user of technology and will continue to be.

Speaker #5: And we have opted, I would say, for a belief that a 10% improvement is the enemy of a 10X improvement. And we are focused on the 10X improvement that we think we can drive by AI.

Speaker #5: And we are have it's a very long conversation that probably not appropriate completely for today, but we are big believers in it. And the improvements it can have on our business.

Speaker #5: When you talk about valuation, we have said that there are components of our valuation business that we think are all of our valuation business for that matter is already a large user of technology, and we'll continue to be.

Speaker #5: We do think it creates a differentiator between the smaller players and the larger players that are able to be more technology forward. We certainly have seen in parts of our business where that technology has driven average pricing down and increased the total addressable market, the TAM, considerably.

Scott Adelson: We do think it creates a differentiator between the smaller players and the larger players that are able to be more technology-forward. We certainly have seen in parts of our business where that technology has driven average pricing down and increased the total addressable market, the TAM, considerably. Those businesses continue to grow, even at, for example, in portfolio where an average cost of a mark may decline. The number of marks and the frequency of those marks is expanding at a faster velocity.

Speaker #5: And those businesses continue to grow even at, for example, in portfolio where an average cost of a mark may decline the number of marks and the frequency of those marks is expanding at a faster velocity.

Speaker #6: Great. Thanks so much for taking my questions.

[Analyst] (Wolfe Research): Great. Thanks so much. Those are my questions.

Speaker #1: Our next question comes from Nathan Stein from Deutsche Bank. Please go ahead with your question.

Operator 2: Our next question comes from Nathan Stein from Deutsche Bank. Please go ahead with your question.

Operator: Our next question comes from Nathan Stein from Deutsche Bank. Please go ahead with your question.

Speaker #2: Hey, good afternoon, everyone. So we've talked about the impact from the geopolitical conflicts in the first quarter, particularly in the corporate finance business. But it seems like an outsized impact to you relative to your peers.

Nathan Stein: Hey, good afternoon, everyone.

Scott Adelson: Hey, Nate.

Nathan Stein: Hey. We've talked about the impact from the geopolitical conflicts in Q1, particularly in the Corporate Finance business, but it seems like an outsized impact to you relative to your peers. Can you just remind us why that is? Separately, how much has this dynamic continued so far in the early weeks of Q2 relative to last quarter?

Speaker #2: Can you just remind us why that is and separately, how much is this dynamic continued so far in the early weeks of the second quarter relative to last quarter?

Speaker #5: Yeah. I think that this has been something that really was March-April-May we've seen it the impact begin to decline in June and July. Now, again, war picks up, don't know what happens, right?

Scott Adelson: Yeah. I think that this has been something that really was March, April, May. We've seen the impact begin to decline in June and July. Now again, war picks up, don't know what happens, right? To be clear about that. From a month-by-month basis, that's what I would say. I'd say why we are impacted more, I think there's a couple things. One is we do have a disproportionate amount of sponsor-based business, and I do think sponsors are putting their toes back in the water kind of one at a time, very, very slowly. Every time something happens, they pull it out of the water. That's one of the reasons. The other, I think we talked about, we have a more global business, and as we talked about, Europe was not performing, at least this quarter, at the same level as the US.

Speaker #5: So, to be clear about that, from a month-by-month basis, that's what I would say. I'd say why we are impacted more—I think there's a couple of things.

Speaker #5: One is we do have a disproportionate amount of sponsor-based business. And I do think sponsors have are putting their toes back in the water on a one at a time.

Speaker #5: Very, very slowly. And so every time something happens, they pull a toe out of the water. That's one of the reasons. The other, I think we talked about, we have a more global business.

Speaker #5: And as we talked about, Europe has was not performing at least this quarter at the same level as the

Speaker #3: And I'd say the third piece is we have a decent-sized technology software business. It's hard to tell what our peers do in that space, but we are quite strong in software.

Lindsey Alley: I'd say the third piece is we have a decent-sized technology software business.

Scott Adelson: Yeah.

Lindsey Alley: It's hard to tell what our peers do in that space. We are quite strong in software. I think it has benefited our activity levels vis-a-vis restructuring. I'd say that we are as well-positioned to do software restructurings over the next two to three years. We all know, that unfolds, and there's a lot of highly leveraged software businesses. What's affecting us today in M&A is going to have a positive impact on our restructuring business over the next two to three years because of the investments we've made in technology and specifically in software.

Speaker #3: And look, I think it has benefited our comments and our activity levels vis-à-vis restructuring. I'd say that we are as well positioned to do software restructurings over the next two to three years.

Speaker #3: As we all know, that unfolds. And there are a lot of highly leveraged software businesses. What's affecting us today in M&A is going to have a positive impact on our restructuring business over the next two to three years.

Speaker #3: Because of the investments we've made in technology, and specifically in software.

Speaker #2: Okay, sounds good. And then as a follow-up on the non-comp expense, it came in strong despite the lower revenue base. Just wanted to ask what the main driver of that was.

Nathan Stein: Okay, sounds good. As a follow-up on the non-comp expense, it came in strong despite the lower revenue base. Just wanted to ask what the main driver of that was. Was it all tech or AI spend investments for the future, or was there some seasonality that we should be mindful of in the quarter? Thanks.

Speaker #2: Was it all tech or AI spend—investments for the future—or was there some seasonality that we should be mindful of in the quarter?

Speaker #2: Thanks.

Speaker #3: I mean, it was pretty close to what we expected, maybe a little lower than expectations. I think it's just timing. There wasn't anything that I'd point out in non-comp in Q1.

Lindsey Alley: It was pretty close to what we expected, maybe a little lower than expectations. I think it's just timing. There wasn't anything that I'd point out in non-comp in Q1. I think any positive benefits on timing that we had in Q1 will be made up for in the subsequent quarters. Not dissimilar to what we expected for the quarter, and I'd say mostly just around timing.

Speaker #3: I think any positive benefits on timing that we had in Q1 will be made up for in the subsequent quarters. But not this similar to what we expected for the quarter.

Speaker #3: And I'd say mostly just around timing.

Speaker #1: Once again, if you would like to ask a question, please press star and one. To withdraw your questions, you may press star and two.

Operator 2: Once again, if you would like to ask a question, please press star one. To withdraw your questions, you may press star two. Our next question comes from Kunal Schmidt from Morgan Stanley. Please go ahead with your question.

Operator: Once again, if you would like to ask a question, please press star one. To withdraw your questions, you may press star two. Our next question comes from Connell Schmitz from Morgan Stanley. Please go ahead with your question.

Speaker #1: Our next question comes from Canal Schmitz from Morgan Stanley. Please go ahead with your question.

Speaker #4: Hey, thanks for taking my question. Following up on restructuring last quarter, you'd called out two large restructuring mandates that were pushed out from fiscal '26 to the first half of fiscal '27.

Kunal Schmidt: Hey, thanks for taking my question. Following up on restructuring, last quarter you'd called out two large restructuring mandates that were pushed out from fiscal 2026 to H1 of fiscal 2027. Can you clarify if one, both, or none of those mandates have been reflected in the $119 that you printed this quarter?

Connell Schmitz: Hey, thanks for taking my question. Following up on restructuring, last quarter you'd called out two large restructuring mandates that were pushed out from fiscal 2026 to H1 of fiscal 2027. Can you clarify if one, both, or none of those mandates have been reflected in the $119 that you printed this quarter?

Speaker #4: Can you clarify if one, both, or none of those mandates have been reflected in the 119 that you printed this quarter?

Speaker #3: Not going to be specific on the two transactions, but I will tell you that those two transactions were one of the many reasons why we had expected decent results and elevated results in fiscal 27.

Lindsey Alley: Not going to be specific on the two transactions, I will tell you that those two transactions were one of the many reasons why we had expected decent results and elevated results in fiscal 2027, and that hasn't changed.

Speaker #3: And that hasn't changed.

Speaker #4: Got it. Okay. I guess switching to FDA, can you quantify any future revenue opportunities from the Morningstar partnership, and then the Data Bank initiative more broadly, which we have not heard about in a couple of quarters now?

Kunal Schmidt: Got it. Okay. I guess switching to FVA, can you quantify any future revenue opportunities from the Morningstar partnership and then the Databank initiative more broadly that we have not heard about in a couple of quarters now? Both from a potential hard $ payment perspective and any cross-segment synergies and any early signs of success to call out?

Connell Schmitz: Got it. Okay. I guess switching to FVA, can you quantify any future revenue opportunities from the Morningstar partnership and then the Databank initiative more broadly that we have not heard about in a couple of quarters now? Both from a potential hard $ payment perspective and any cross-segment synergies and any early signs of success to call out?

Speaker #4: Both from a potential hard dollar payment perspective and any cross-segment synergies. And any early signs of success to call out?

Speaker #3: Yeah. So I'd say think of the Morningstar partnership as one baby step in sort of the more medium longer-term objective of utilizing what we think is quite unique data set that we have to drive client success and ultimately revenues.

Lindsey Alley: Yeah. I'd say think of the Morningstar partnership as one baby step in sort of the more medium, longer term objective of utilizing what we think is quite unique data set that we have to drive client success and ultimately revenues. Any revenues from Morningstar would be de minimis. It's not about the revenues, it's about that first step. It's about the branding of combining with Morningstar, and I think look at it as a series of steps over the coming years to get to ultimately where we want to go. No modeling changes.

Speaker #3: Any revenues from Morningstar would be de minimis. It's not about the revenues; it's about that first step. It's about the branding of combining with Morningstar.

Speaker #3: And I think look at it as a series of steps over the coming years to get to ultimately where we want to go. But nothing no modeling changes.

Scott Adelson: No reason to change your modeling. There will be more things like this over time.

Speaker #5: No reason to change your modeling and I mean, it is. There will be more things like this over time.

Speaker #4: I'd appreciate it. Thanks, Scott. Thanks, Lindsay.

Kunal Schmidt: I'd appreciate it. Thanks, Scott. Thanks, Lindsey.

Connell Schmitz: I'd appreciate it. Thanks, Scott. Thanks, Lindsey.

Speaker #5: Sure. Thanks.

Scott Adelson: Sure thing.

Speaker #1: And with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Scott for any closing remarks.

Operator 2: With that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Scott for any closing remarks.

Operator: With that, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Scott for any closing remarks.

Speaker #5: I want to thank you all for participating in our first quarter fiscal 2027 earnings call. We look forward to updating everyone on our progress when we discuss our second quarter results for fiscal 2027 this fall.

Scott Adelson: I want to thank you all for participating in our Q1 fiscal 2027 earnings call. We look forward to updating everyone on our progress when we discuss our Q2 results for fiscal 2027 this fall. Thank you all.

Speaker #5: Thank you all.

Operator 2: The conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.

Operator: The conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.

Q1 2027 Houlihan Lokey Inc Earnings Call

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