Houlihan Lokey Inc - Ordinary Shares (HLI) Q1 Earnings call transcript Jul 30, 2025

In its recent earnings call for the first quarter of fiscal year 2025, investment bank Houlihan Lokey reported a robust performance, with revenues of $514 million and adjusted earnings per share of $1.22. This represents a 24% increase in revenues and a 37% jump in adjusted earnings per share compared to the same period last year. The company's optimism is fueled by a strong start to the year, particularly in its corporate finance, financial restructuring, and financial and valuation advisory services.

Corporate Finance and M&A Activity

Houlihan Lokey's corporate finance division has seen significant growth, with revenues up 45% from the same quarter last year. The division's performance is attributed to a strong market environment, a growing pipeline of transactions, and the company's reputation for delivering high-quality advice. The company's executives expressed confidence in the outlook for M&A activity, citing a healthy pipeline of deals and a favorable interest rate environment. They also highlighted the importance of strategic acquisitions, such as the recent acquisition of Triago, in expanding the firm's private funds capabilities.

Financial Restructuring and Capital Markets

The financial restructuring business, which has been a key driver of Houlihan Lokey's growth in recent years, saw revenues of $117 million in the first quarter. This represents the second-highest first quarter revenue for this business, underscoring its resilience in challenging market conditions. Despite the ongoing uncertainty surrounding interest rates and geopolitical tensions, Houlihan Lokey remains optimistic about the potential for improved M&A activity and a shift towards healthy refinancing opportunities. The company's capital markets business has also seen strong growth, driven by middle market M&A and a surge in capital providers seeking to deploy capital.

Outlook and Strategic Initiatives

Looking ahead, Houlihan Lokey is optimistic about the fiscal year, with a focus on capitalizing on improving market conditions and the investments it has made across its businesses. The company is particularly excited about its private funds capabilities, which have seen significant expansion through strategic acquisitions and the addition of new managing directors. Houlihan Lokey's executives also emphasized the importance of maintaining a strong hiring market for new senior talent and a steady flow of new candidates, as the firm seeks to build on its reputation as a leader in the industry.

In conclusion, Houlihan Lokey's strong first quarter performance is a testament to its strategic initiatives and its ability to navigate challenging market conditions. With a focus on M&A activity, financial restructuring, and capital markets, the company is well-positioned to capitalize on the recovery as it unfolds. As we look forward to the second quarter results, investors and analysts will be watching closely to see how Houlihan Lokey continues to leverage its expertise and strategic acquisitions to drive growth and value for its clients.