Houlihan Lokey Inc.

ticker: HLI step: 01 generated: 2026-05-13 source: quick-research

Houlihan Lokey Inc. (HLI) — Business Overview

Note: Houlihan Lokey's fiscal year ends March 31.

Business Description

Houlihan Lokey is an independent investment bank focused on the middle market, operating three business segments: Corporate Finance (~64% of revenue — M&A advisory, capital solutions), Financial Restructuring (~23% — #1 global restructuring advisor by deal count), and Financial & Valuation Advisory (~13% — fairness opinions, portfolio valuation). The firm is the #1 Global M&A Advisor by deal count (415 deals in 2024), #1 Global Restructuring firm (88 deals in 2024), and #1 Global Fairness Opinion firm since 2000. FY2025 (ended March 31, 2025) revenues were a record $2.39B (+25% YoY). 2,702 employees across 35 locations worldwide.

Revenue Model

Pure fee-based advisory: (1) Corporate Finance fees — success fees on M&A, divestitures, private equity sponsor advisory; dominant and cyclical, grew 36%+ YoY in Q3 FY2025. (2) Financial Restructuring fees — success fees on Chapter 11, out-of-court restructuring, distressed debt exchanges; genuinely counter-cyclical; #1 in restructuring provides a floor during M&A downturns. (3) FVA fees — fairness opinion fees (mandated by boards for major transactions) + portfolio valuation for PE firms + transaction advisory; quasi-recurring because fairness opinions are required for virtually every M&A transaction. No balance sheet risk — all revenue is advisory fee-based.

Products & Services

• M&A Advisory — middle market ($100M–$5B deals); buy-side, sell-side, and sponsor coverage; 415 deals in 2024 (more deals than Goldman Sachs)
• Capital Solutions — debt and equity capital raises for middle-market companies
• Restructuring — distressed debt restructuring, Chapter 11 debtor/creditor advisory; #1 global by count (88 deals in 2024 vs. PJT's 59)
• Fairness Opinions — board-directed opinions on deal fairness; required for all major transactions; #1 since 2000 (1,243 deals cumulative)
• Portfolio Valuation — fair value opinions for PE fund portfolios; quarterly/annual recurring revenue from PE firms
• Financial & Valuation Advisory — dispute resolution consulting, real estate valuation, transaction advisory
• Data & Analytics — leveraging deal data for competitive insights

Customer Base & Go-to-Market

Middle-market corporates, private equity sponsors (financial sponsors are the dominant client for all three segments), boards of directors (fairness opinions), creditors and debtors in distress situations. The PE sponsor relationship is the core go-to-market: each PE-backed company is a potential M&A, restructuring, and fairness opinion client. With thousands of PE-backed portfolio companies and ~$6T in PE dry powder deploying, the middle-market deal pipeline is deep.

Competitive Position

Houlihan Lokey's three-segment structure creates a rare all-weather advisory model: Corporate Finance wins in bull markets, Restructuring wins in downturns, and FVA provides quasi-recurring revenue in all environments. No other independent advisory firm has the same depth in all three segments simultaneously. Competitors: Evercore and Lazard (advisory), PJT Partners (restructuring), Duff & Phelps/Kroll (valuation). The #1 deal count rankings in M&A and Restructuring create a self-reinforcing reference position: clients choose Houlihan Lokey because everyone else does — particularly boards seeking defensibility in fairness opinions.

Key Facts

• Founded: 1972 (Los Angeles)
• Headquarters: Los Angeles, California; New York; Chicago
• Employees: 2,702
• Exchange: NYSE
• Sector / Industry: Financials / Independent Investment Banking Advisory
• Market Cap: ~$14–17B

ticker: HLI step: 04 generated: 2026-05-13 source: quick-research

Houlihan Lokey Inc. (HLI) — Financial Snapshot

Note: Houlihan Lokey's fiscal year ends March 31.

Income Statement Summary

FY2025 record: 25% increase in closed transactions drove the revenue and earnings surge. Segment mix: Corporate Finance ~64%, Financial Restructuring ~23%, FVA ~13%. Q4 FY2025 (Jan–Mar 2025): revenue $666M (+28% vs Q4 FY2024's $520M). FY2026 (ongoing): Q2 FY2026 slides show accelerating revenue growth and record FY2026 revenue trajectory. Corporate Finance grew 36% YoY in Q3 FY2025 — driven by middle-market M&A recovery. Restructuring revenues modest but elevated backlog.

Cash Flow & Balance Sheet

Capital-light model: no proprietary trading, no lending. Primary expenses are compensation (~55–60% of revenue) and G&A. No complex balance sheet management unlike LPL or Raymond James. Free cash flow closely tracks net income.

Key Ratios (approximate)

• P/E: ~29–33x (trailing FY2025 EPS $5.82 — premium to Evercore's 18x, reflecting HLI's all-weather model)
• Revenue Growth: +25% (FY2025); FY2026 record trajectory
• Net Margin: ~16.7% (FY2025); improving from ~14.7% (FY2024)
• 3-year EPS CAGR: ~25%+ (FY2022→FY2025)

Growth Profile

Houlihan Lokey has grown revenue from $1.81B (FY2023) to $2.39B (FY2025) — nearly 32% in two fiscal years — entirely organically. The all-weather model (Corporate Finance + Restructuring + FVA) means the firm never has a truly catastrophic year: when M&A slows, Restructuring accelerates. The 25% transaction volume increase in FY2025 reflects the M&A recovery plus Houlihan Lokey capturing market share from bulge brackets as middle-market sponsors prefer boutique independence. FY2026 shows continued acceleration per investor slides.

Forward Estimates

• FY2026 (ending March 2026): Record revenues; analyst avg PT $216.80 implies further EPS growth
• Analyst consensus: Buy (7 analysts); avg PT $216.80, range $163 (UBS Neutral) to $235 (bull)
• UBS more cautious: $163 target, citing valuation premium
• Key driver: Middle-market M&A + Restructuring backlog converts to revenue with 6–12 month lag