Q2 2025 Houlihan Lokey Inc Earnings Call Transcript
Key Points
- Houlihan Lokey Inc (HLI) reported a 23% increase in revenues to $575 million and a 32% rise in adjusted earnings per share to $1.46 compared to the same period last year.
- Corporate Finance revenues increased by 29% year-over-year, driven by improvements in the M&A markets and strong new business generation.
- Financial Restructuring revenues rose by 15% year-over-year, with strong new business activity in both large cap and middle market opportunities.
- The Financial and Valuation Advisory segment saw a 12% increase in revenues, supported by growth in non-cyclical business lines and a rebound in M&A-related services.
- The company successfully integrated recent acquisitions, such as Triago and Prytania Solutions, enhancing its capabilities in private capital and tech-enabled valuation services.
- Despite improvements, the transaction velocity in Corporate Finance remains slower than in previous recoveries, with longer timelines to close deals.
- Interest rates, although lower than recent peaks, remain high, posing challenges to clients' financial performance.
- Geopolitical volatility, including potential conflicts in the Middle East and Ukraine, and the upcoming U.S. presidential elections add complexity to the business outlook.
- The adjusted effective tax rate increased to 31.3% from 28.4% in the same quarter last year, primarily due to higher state and foreign taxes.
- Adjusted non-compensation expenses rose by 7% year-over-year, impacting the overall expense ratio.
Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Houlihan Lokey second-quarter fiscal year 2025 earnings conference call. (Operator Instructions) Please note that this conference call is being recorded today, October 30, 2024.
I will now turn the call over to the company.
Thank you, operator, and hello, everyone. By now, everyone should have access to our second quarter fiscal year 2025 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
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