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What changed in HOULIHAN LOKEY, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HOULIHAN LOKEY, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+205 added−214 removedSource: 10-K (2025-05-15) vs 10-K (2024-05-21)

Top changes in HOULIHAN LOKEY, INC.'s 2025 10-K

205 paragraphs added · 214 removed · 185 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

39 edited+4 added−8 removed62 unchanged
Biggest changeIn the United States, the Securities and Exchange Commission (the "SEC") is the federal agency responsible for the administration of the federal securities laws. Houlihan Lokey Capital, Inc. (“Houlihan Lokey Capital”), one of our wholly owned subsidiaries, through which we conduct our CF, FR and transaction opinion businesses in the United States, is registered as a broker-dealer with the SEC.
Biggest change(“Houlihan Lokey Capital”), one of our wholly-owned subsidiaries, through which we conduct our CF, FR and transaction opinion businesses in the United States, is registered as a broker-dealer with the SEC and is subject to regulation and oversight by the SEC. In addition, the Financial Industry Regulatory Authority, Inc.
Capital Markets Advisory: We provide global financing solutions and capital-raising advisory services for a broad range of corporate and private equity clients across most industry sectors, from large, publicly-held, multinational corporations to financial sponsors to privately-held companies founded and run by entrepreneurs.
Capital Solutions: We provide global financing solutions and capital-raising advisory services for a broad range of corporate and private equity clients across most industry sectors, from large, publicly-held, multinational corporations to financial sponsors to privately-held companies founded and run by entrepreneurs.
Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance standards, including the requirements that (i) a majority of our board of directors consist of independent directors and (ii) that our board of directors have compensation and nominating and corporate governance committees composed entirely of independent directors, as independence is defined in Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and under the New York Stock Exchange listing standards.
Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance standards, including the requirements that (i) a majority of our board of directors consist of independent directors and (ii) that our board of directors have compensation and nominating and corporate governance committees composed entirely of independent directors, as independence is defined in Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and under the New York Stock Exchange listing standards.
We make available free of charge in the Investor Relations section of our website ( http://investors.hl.com ) this Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed or furnished with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act.
We make available free of charge in the Investor Relations section of our website ( http://investors.hl.com ) our annual reports on Form 10-K, including this Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such material is electronically filed or furnished with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act.
We advise companies and creditor constituencies at all levels of the capital structure, in both out-of-court negotiations and in formal bankruptcy or insolvency proceedings. Our experience, geographic diversity and size allow us to provide the immediate attention and staffing required for time-sensitive and mission-critical restructuring assignments, making us a valued partner for our clients.
We advise companies and creditor constituencies at all levels of the capital structure, in both out-of-court negotiations and in formal bankruptcy or insolvency proceedings. Our experience, geographic diversity and size allow us to provide the immediate attention and staffing required for time-sensitive and mission-critical restructuring and liability management assignments, making us a valued partner for our clients.
We believe that through our industry groups we have a meaningful presence in every major industry segment, including: business services; consumer, food and retail; energy; financial services; fintech; healthcare; industrials; real estate, lodging and leisure; and technology. We continue to expand and deepen our specialized industry capabilities through a combination of internal promotion, external hires and acquisitions.
We believe that, through our industry groups, we have a meaningful presence in every major industry segment, including: business services; consumer; energy; financial services; fintech; healthcare; industrials; real estate, lodging and leisure; and technology. We continue to expand and deepen our specialized industry capabilities through a combination of internal promotion, external hires and acquisitions.
This marketing effort is combined with an extensive network of referral relationships with law firms, consulting firms, accounting firms and other professional services firms that have been developed by our financial professionals who maintain those relationships as potential referral sources and direct clients across all of our business practices. 2 Table of Contents Corporate Finance As of March 31, 2024, we had 223 CF Managing Directors utilizing a collaborative, interdisciplinary approach to provide our clients with extensive industry and product expertise and global reach in a wide variety of M&A and capital markets transactions.
This marketing effort is combined with an extensive network of referral relationships with law firms, consulting firms, accounting firms and other professional services firms that have been developed by our financial professionals who maintain those relationships as potential referral sources and direct clients across all of our business practices. 2 Table of Contents Corporate Finance As of March 31, 2025, we had 240 CF Managing Directors utilizing a collaborative, interdisciplinary approach to provide our clients with extensive industry and product expertise and global reach in a wide variety of M&A and capital markets transactions.
Given the depth and breadth of the team’s expertise and the high barriers to entry for this expertise and experience, international and multi-jurisdictional restructurings represent an attractive opportunity for our FR group. 3 Table of Contents The group employs an interdisciplinary approach to engagements, calling upon the expertise of our industry groups, Capital Markets Advisory group and Financial Sponsors group, and drawing on the worldwide resources of the FR team as each situation may require.
Given the depth and breadth of the team’s expertise and the high barriers to entry for this expertise and experience, international and multi-jurisdictional restructurings represent an attractive opportunity for our FR group. 3 Table of Contents The group employs an interdisciplinary approach to engagements, calling upon the expertise of our industry groups, Capital Solutions group and Financial Sponsors group, and drawing on the worldwide resources of the FR team as each situation may require.
Our Capital Markets Advisory professionals leverage a wide array of longstanding, senior-level lender and investor relationships, including with traditional and non-traditional direct capital providers (such as institutional credit funds, commercial finance companies, business development companies, insurance companies, pension funds, mutual funds, global asset managers, special situations investors and structured equity providers).
Our Capital Solutions professionals leverage a wide array of longstanding, senior-level lender and investor relationships, including with traditional and non-traditional direct capital providers (such as institutional credit funds, commercial finance companies, business development companies, insurance companies, pension funds, mutual funds, global asset managers, special situations investors and structured equity providers).
Holders of Class A common stock do not have the same protections afforded to stockholders of companies that are subject to such requirements.” In the event that we cease to be a “controlled company” and our shares continue to be listed on the New York Stock Exchange, we will be required to comply with all of these provisions by the expiration of the applicable transition periods.
Holders of Class A common stock do not have the same protections afforded to stockholders of companies that are subject to such requirements.” In the event that we cease to be a “controlled company” and our shares continue to be listed on the New York Stock Exchange, we will be required to comply with all of these corporate governance standards by the expiration of the applicable transition periods.
Information on our segments is set forth in "Management’s Discussion and Analysis of Financial Condition and Results of Operations." Our Advisory Services We provide our financial professionals with an integrated platform that enables them to deliver meaningful and differentiated advice to our clients.
Information on our segments is set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our Advisory Services We provide our financial professionals with an integrated platform that enables them to deliver meaningful and differentiated advice to our clients.
HLE GmbH is approved to conduct regulated investment services by the German regulatory authority, Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”). 6 Table of Contents HLE GmbH has exercised the appropriate European financial services passport rights to provide cross-border services into all other members of the EEA from Germany and to establish branches in France and Spain.
HLE GmbH is approved to conduct regulated investment services by the German regulatory authority, Bundesanstalt für Finanzdienstleistungsaufsicht. HLE GmbH has exercised the appropriate European financial services passport rights to provide cross-border services into all other members of the EEA from Germany and to establish branches in France and Spain.
The FR group has deep experience evaluating complex, highly leveraged situations. In addition to comprehensive financial restructurings, we work with distressed companies on changes of control, asset sales and other M&A and capital markets activities, many times involving the sale of a company or its assets quickly, and in contested or litigious settings on expedited timeframes.
The FR group has deep experience evaluating complex, highly leveraged situations. In addition to comprehensive financial restructuring and liability management transactions, we work with distressed companies on changes of control, asset sales and other M&A and capital markets activities, many times involving the sale of a company or its assets quickly, and in contested or litigious settings on expedited timeframes.
This philosophy of investing in our people has been and will continue to be core to our culture and organization. As of March 31, 2024, 2023, and 2022, we employed 2,601, 2,610, and 2,257 people, respectively, worldwide. Competition Our competitors are other investment banking and financial advisory firms.
This philosophy of investing in our people has been and will continue to be core to our culture and organization. As of March 31, 2025, 2024, and 2023, we employed 2,702, 2,601, and 2,610 people, respectively, worldwide. Competition Our competitors are other investment banking and financial advisory firms.
We do not lend or engage in any securities sales and trading operations or research that might conflict with our clients’ interests. As of March 31, 2024, we had a team of 1,853 financial professionals across 36 offices globally, serving more than 2,000 clients annually over the past several years, ranging from closely held companies to Fortune Global 500 corporations.
We do not lend or engage in any securities sales and trading operations or research that might conflict with our clients’ interests. As of March 31, 2025, we had a team of 1,893 financial professionals across 35 offices globally, serving more than 2,000 clients annually over the past several years, ranging from closely held companies to Fortune Global 500 corporations.
Such entity is subject to DFSA administered law and regulation (most notably certain applicable modules of the DFSA Rulebook), and individuals within it carrying out "licensed functions" (essentially senior management roles) are required to be approved by DFSA to so act.
Such entity is subject to DFSA administered law and regulation (most notably certain applicable modules of the DFSA Rulebook), and individuals within it carrying out “licensed functions” (essentially senior management roles) are required to be approved by DFSA to so act.
Our FR group has earned a reputation for being the advisor of choice for many of the largest and most complex restructurings, offering knowledge, experience, and creativity to address challenging situations. We operate in all major worldwide markets as debt issuances have incre ased around the world.
Our FR group has earned a reputation for being the advisor of choice for many of the largest and most complex restructuring and liability management transactions, offering knowledge, experience, and creativity to address challenging situations. We operate in all major worldwide markets as debt issuances have incre ased around the world.
Market and Industry Data The industry, market and competitive position data referenced throughout this Form 10-K are based on research, industry and general publications, including surveys and studies conducted by third parties. Industry rankings are based on data provided by LSEG (formerly known as Refinitiv) unless otherwise noted.
Market and Industry Data The industry, market and competitive position data referenced throughout this Form 10-K are based on research, industry and general publications, including surveys and studies conducted by third parties. Industry rankings are based on data provided by LSEG unless otherwise noted.
Europe Our European advisory business is conducted primarily through our subsidiaries and or one of their branches, namely, as regards the provision of regulated investment services: • in the United Kingdom, Houlihan Lokey UK Limited ("HL UK"), and Houlihan Lokey Advisory Limited ("HLA Ltd") private limited companies, each of which is organized under the laws of England and Wales; and • in Germany, Houlihan Lokey (Europe) GmbH (“HLE GmbH”) a private limited company organized under the laws of such jurisdiction with branches in England, France, and Spain in addition to its main office in Germany.
Europe Our European advisory business is conducted primarily through our subsidiaries and or one of their branches, namely, as regards the provision of regulated investment services: • in the United Kingdom, Houlihan Lokey UK Limited (“HL UK”), which is organized under the laws of England and Wales; and • in Germany, Houlihan Lokey (Europe) GmbH (“HLE GmbH”) a private limited company organized under the laws of such jurisdiction with branches in England, France, and Spain in addition to its main office in Germany.
In this Form 10-K, we use the term “mid-cap” when referring to transactions with a value below $1 billion and “large-cap” when referring to transactions with a value equal to or in excess of $1 billion. Other Information Our principal executive offices are located at 10250 Constellation Blvd., 5th Floor, Los Angeles, California 90067. Our telephone number is (310) 788-5200.
In this Form 10-K, we use the term “mid-cap” when referring to transactions with a value below $1 billion and the term “large-cap” when referring to transactions with a value equal to or in excess of $1 billion. Other Information Our principal executive offices are located at 10250 Constellation Blvd., 5th Floor, Los Angeles, California 90067.
South America Brazil In Brazil, Houlihan Lokey provides unregulated financial advisory services through Houlihan Lokey Assessoria Financeira Ltda. 7 Table of Contents Other We are also subject to laws and regulations prohibiting corrupt or illegal payments to government officials and other persons, including the US Foreign Corrupt Practices Act and the UK Bribery Act.
South America Brazil In Brazil, Houlihan Lokey operates principally a financial restructuring business, which provides unregulated financial advisory services through Houlihan Lokey Assessoria Financeira Ltda. 7 Table of Contents Other We are also subject to laws and regulations prohibiting corrupt or illegal payments to government officials and other persons, including the US Foreign Corrupt Practices Act and the UK Bribery Act.
Organizational Structure Overview Houlihan Lokey, Inc. is a holding company that operates our business through its subsidiaries, the primary subsidiaries being Houlihan Lokey Capital, HLFA and HL EMEA LLP, each of which is described above under “Regulation.” The diagram below depicts our current organizational structure and the percentages are as of March 31, 2024: HL Voting Trust Agreement In connection with the successful completion of the initial public offering ("IPO") of our Class A common stock in August 2015, we entered into the Voting Trust Agreement (the “HL Voting Trust Agreement”), dated as of August 18, 2015, with the HL Holders and the trustees of the HL Voting Trust.
Organizational Structure Overview Houlihan Lokey, Inc. is a holding company that operates our business through its subsidiaries, the primary subsidiaries being Houlihan Lokey Capital, HLFA, HL UK, and HLE GmbH, each of which is described above under “Regulation.” The diagram below depicts our current organizational structure and the percentages are as of March 31, 2025: HL Voting Trust Agreement In connection with the successful completion of the initial public offering (“IPO”) of our Class A common stock in August 2015, we entered into the Voting Trust Agreement (the “HL Voting Trust Agreement”), dated as of August 18, 2015, with the HL Holders and the trustees of the HL Voting Trust.
As of March 31, 2024, we had approximately 1,000 present and former employee shareholders that collectively owned approximately 25% of our equity with no single employee owning more than 2% of our equity. We believe that a strong emphasis on cultural fit during our recruiting process combined with broad employee ownership results in high retention rates.
As of March 31, 2025, we had approximately 1,100 present and former employee shareholders that collectively owned approximately 24% of our equity with no single employee owning more than 2% of our equity. We believe that a strong emphasis on cultural fit during our recruiting process combined with broad employee ownership results in high retention rates.
Financial and Valuation Advisory As of March 31, 2024, we had 39 Managing Directors in our FVA group, which we believe represents one of the largest and most respected valuation and financial opinion practices in the United States.
Financial and Valuation Advisory As of March 31, 2025, we had 42 Managing Directors in our FVA group, which we believe represents one of the largest and most respected valuation and financial opinion practices in the United States.
HLE GmbH, through which we now conduct our regulated business in the EU, was established in order to mitigate the effects of the United Kingdom ceasing to be a member of the EU (“Brexit”) on our European business, further to the end of the Brexit transitional period and the withdrawal of “passport” rights in favor of HL EMEA, LLP and HLCF Ltd.
HLE GmbH, through which we now conduct our regulated business in the EU, was established in order to mitigate the effects of the United Kingdom ceasing to be a member of the EU (“Brexit”) on our European business, further to the end of the Brexit transitional period and the withdrawal of “passport” rights in favor of other HL entities.
Financial Restructuring As of March 31, 2024, we had 54 FR Managing Directors working around the globe, which we believe constitutes one of the largest restructuring groups in the investment banking industry.
Financial Restructuring As of March 31, 2025, we had 57 FR Managing Directors working around the globe, which we believe constitutes one of the largest restructuring groups in the investment banking industry.
Singapore In Singapore, Houlihan Lokey conducts its business through Houlihan Lokey (Singapore) Private Limited and Houlihan Lokey Advisers Singapore Private Limited, both of which are registered with the Monetary Authority of Singapore (“MAS”) as “exempt corporate finance advisors” and are therefore able to provide exempt corporate finance advisory services to accredited investors only, subject to compliance with regulation governing such status as applicable from time to time in Singapore.
Singapore In Singapore, Houlihan Lokey conducts its business through Houlihan Lokey (Singapore) Private Limited, which is registered with the Monetary Authority of Singapore (“MAS”) as an “exempt corporate finance advisor” and is therefore able to provide exempt corporate finance advisory services to accredited investors only, subject to compliance with regulation governing such status as applicable from time to time in Singapore.
As of March 31, 2024, the HL Voting Trust controlled approximately 77.1% of the total voting power of the Company. 8 Table of Contents Controlled Company The HL Voting Trust controls a majority of the voting power of our outstanding common stock. As a result, we are a “controlled company” under the rules of the New York Stock Exchange.
As of March 31, 2025, the HL Voting Trust controlled approximately 74.9% of the total voting power of the Company. 8 Table of Contents Controlled Company The HL Voting Trust controls a majority of the voting power of our outstanding common stock. As a result, we are a “controlled company” under the rules of the New York Stock Exchange.
We market our services through our product areas, our industry groups and our Financial Sponsors group, serving our clients in three primary business practices: Corporate Finance ("CF"), encompassing M&A and capital markets advisory, Financial Restructuring ("FR") both out-of-court and in formal bankruptcy or insolvency proceedings, and Financial and Valuation Advisory ("FVA"), including financial opinions and a variety of valuation and financial consulting services.
We market our services through our product areas, our industry groups and our Financial Sponsors group, serving our clients in three primary business practices: Corporate Finance (“CF”), encompassing M&A and Capital Solutions, Financial Restructuring (“FR”), including restructurings both out-of-court and in formal bankruptcy or insolvency proceedings, and Financial and Valuation Advisory (“FVA”), including financial opinions and a variety of valuation and financial consulting services.
In addition to those entities referenced above, we also provide unregulated corporate finance advisory services through other subsidiaries in Germany, Italy, France, the Netherlands, Sweden, Belgium, Switzerland, and Spain. Each of Houlihan Lokey, EMEA, LLP (“HL EMEA LLP”), HL UK and HLA Ltd are authorized and regulated by the United Kingdom’s Financial Conduct Authority (“FCA”).
In addition to those entities referenced above, we also provide unregulated corporate finance advisory services through other subsidiaries in Germany, Italy, France, the Netherlands, Sweden, Switzerland, and Spain. HL UK is authorized and regulated by the United Kingdom’s Financial Conduct Authority (“FCA”).
See “Risk Factors—Risks Related to Our Class A Common Stock—We are a “controlled company” within the meaning of the New York Stock Exchange listing standards and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements.
See the Risk Factor “We are a ‘controlled company’ within the meaning of the New York Stock Exchange listing standards and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements.
We believe our primary competitors vary by product and industry expertise and would include the following: for our CF practice, Jefferies LLC, Lazard Ltd, Moelis & Company, N M Rothschild & Sons Limited, Piper Sandler Companies, Robert W. Baird & Co.
We believe our primary competitors vary by product and industry expertise and would include the following: for our CF practice, Jefferies Financial Group Inc., Lazard, Inc., Lincoln International LLC, Moelis & Company, Piper Sandler Companies, Raymond James Financial, Inc., Robert W. Baird & Co.
We provide our financial professionals with an integrated platform that enables them to deliver meaningful and differentiated advice to our clients. We advise our clients on critical strategic and financial decisions, employing a rigorous analytical approach coupled with deep product and industry expertise.
We advise our clients on critical strategic and financial decisions, employing a rigorous analytical approach coupled with deep product and industry expertise.
Houlihan Lokey Capital is subject to regulation and oversight by the SEC. In addition, the Financial Industry Regulatory Authority, Inc. ("FINRA"), a self-regulatory organization that is subject to oversight by the SEC, adopts and enforces rules governing the conduct, and examines the activities, of its broker-dealer member firms, including Houlihan Lokey Capital.
(“FINRA”), a self-regulatory organization that is subject to oversight by the SEC, adopts and enforces rules governing the conduct, and examines the activities, of its broker-dealer member firms, including Houlihan Lokey Capital. State securities regulators also have regulatory or oversight authority over Houlihan Lokey Capital in those states in which it does business.
Middle East Dubai, United Arab Emirates Houlihan Lokey (MEA Financial Advisory) Ltd. is licensed under Article 48 of the Regulatory Law 2004 by the Dubai Financial Services Authority ("DFSA") to provide certain regulated financial services from its office in the Dubai International Financial Centre.
These “passport” rights derive from the pan-European regime established by the EU Markets in Financial Instruments Directive, which regulates the provision of investment services and ancillary activities throughout the EEA. 6 Table of Contents Middle East Dubai, United Arab Emirates Houlihan Lokey (MEA Financial Advisory) Ltd. is licensed under Article 48 of the Regulatory Law 2004 by the Dubai Financial Services Authority (“DFSA”) to provide certain regulated financial services from its office in the Dubai International Financial Centre.
We compete with all of the above as well as with regional and industry-focused boutique firms to attract and retain qualified employees. Our ability to continue to compete effectively in our business will depend upon our ability to attract new employees and retain our existing employees.
Our ability to continue to compete effectively in our business will depend upon our ability to attract new employees and retain our existing employees.
Japan In Japan, financial advisory services are provided by Houlihan Lokey Corporation, G-FAS Corporation, HL Succession Corporation, and BIZIT Inc., none of which conducts regulated activities in Japan.
India Houlihan Lokey’s Indian corporate finance and financial and valuation advisory businesses are conducted through Houlihan Lokey Advisory (India) Private Limited, which is licensed by the Securities and Exchange Board of India (“SEBI”). Japan In Japan, financial advisory services are provided by Houlihan Lokey Corporation, HL Succession Corporation, and BIZIT Inc., none of which conducts regulated activities in Japan.
Item 1. Business Established in 1972, Houlihan Lokey, Inc. is a leading global independent investment bank with expertise in mergers and acquisitions (M&A), capital markets, financial restructurings, and financial and valuation advisory. Through our offices in the Americas, Europe, Asia, Australia, and the Middle East, we serve a diverse set of clients worldwide, including corporations, financial sponsors and government agencies.
Item 1. Business Established in 1972, Houlihan Lokey, Inc. is a leading global independent investment bank with expertise in mergers and acquisitions (“M&A”), capital markets, financial restructurings and liability management, and financial and valuation advisory.
Incorporated, Stifel Financial Corp., William Blair & Company, L.L.C., and the bulge-bracket investment banking firms; for our FR practice, Evercore Partners, Lazard Ltd, Moelis & Company, N M Rothschild & Sons Limited and PJT Partners; and for our FVA practice, the “big four” accounting firms, Alvarez & Marsal, Kroll, LLC, Lincoln International LLC., and various global financial advisory and accounting firms.
Incorporated, Rothschild & Co SCA, William Blair & Company, LLC, and the bulge-bracket investment banking firms; for our FR practice, Evercore Inc., Lazard, Inc., Moelis & Company, Perella Weinberg Partners, PJT Partners Inc., and Rothschild & Co.
Removed
State securities regulators also have regulatory or oversight authority over Houlihan Lokey Capital in those states in which they do business. Houlihan Lokey previously conducted certain of its CF, FR, and transaction opinion businesses in the United States through an additional wholly owned subsidiary, Houlihan Lokey Advisors, LLC (“Houlihan Lokey Advisors”).
Added
Through our offices in the Americas, Europe, Asia, Australia, and the Middle East, we serve a diverse set of clients worldwide, including corporations, financial sponsors and government agencies. We provide our financial professionals with an integrated platform that enables them to deliver meaningful and differentiated advice to our clients.
Removed
The broker-dealer related businesses of Houlihan Lokey Advisors were transferred to Houlihan Lokey Capital as of March 26, 2024, following the submission of an application to FINRA for approval of this internal reorganization pursuant to FINRA rules.
Added
SCA; and for our FVA practice, the “big four” accounting firms, Alvarez & Marsal, Kroll, LLC, Lincoln International LLC, and various global financial advisory and accounting firms. We compete with all of the above as well as with regional and industry-focused boutique firms to attract and retain qualified employees.
Removed
FINRA’s review of the application remains open, and the formal termination of Houlihan Lokey Advisors’ broker-dealer registration is expected to take effect by end of second quarter 2024.
Added
In the United States, the Securities and Exchange Commission (the “SEC”) is the federal agency responsible for the administration of the federal securities laws. Houlihan Lokey Capital, Inc.
Removed
The regulated businesses of HL EMEA, LLP and Houlihan Lokey (Corporate Finance) Limited ("HLCF Ltd”), an entity previously authorized and regulated by the FCA, were transferred to HL UK on April 1, 2024, following which HLCF Ltd was granted permission by the FCA to surrender its regulatory permissions as of April 25, 2024.
Added
Our telephone number is (310) 788-5200. Our website address is www.hl.com.
Removed
HL EMEA LLP also proposes to surrender its regulatory permissions subject to regulatory approval. HLA Ltd, HL CF Ltd, and HL UK were formerly named "GCA Altium Limited", “Quayle Munro Limited” and "Oakley Advisory Limited", respectively, and, following their acquisitions, we have continued to operate their businesses through such entities.
Removed
These “passport” rights derive from the pan-European regime established by the EU Markets in Financial Instruments Directive, which regulates the provision of investment services and ancillary activities throughout the EEA.
Removed
Israel In Israel we provide unregulated corporate finance advisory services through the Israel branch of Houlihan Lokey Israel Limited, a private limited company organized under the laws of England and Wales. The branch is registered with the Israeli Corporations Authority.
Removed
India Houlihan Lokey’s Indian financial and valuation advisory business is conducted through Houlihan Lokey Advisory (India) Private Limited, which is licensed by the Securities and Exchange Board of India (“SEBI”) as an Investment Adviser.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

44 edited+13 added−7 removed143 unchanged
Biggest changeWe intend to grow our non-United States business, including growth into new regions with which we have less familiarity and experience, and this growth is important to our overall success. For example, the acquisition of GCA Corporation in 2021 greatly expanded our international presence in Asia and Europe. In addition, many of our larger clients are non-United States entities.
Biggest changeOur international operations are subject to certain risks, which may affect our revenue. In fiscal 2025, we earned approximately 28.8% of our revenue from our international operations. We intend to grow our non-United States business, including growth into new regions with which we have less familiarity and experience, and this growth is important to our overall success.
We derive a substantial portion of our revenue from advisory fees, which are mainly generated at key transaction milestones, such as closing, the timing of which is outside of our control.
We derive a substantial portion of our revenue from advisory fees, which are mainly generated at key milestones, such as the closing of a transaction, the timing of which is outside of our control.
The uncertainty of available credit and interest rates and the volatility of the capital markets and the fact that we do not provide financing or otherwise commit capital to clients can adversely affect the size, volume, timing and ability of such clients to successfully complete M&A transactions and adversely affect our CF and FVA groups.
The uncertainty of available credit and interest rates and the volatility of the capital markets and the fact that we do not provide financing or otherwise commit capital to clients can adversely affect the size, volume, timing and ability of such clients to successfully complete M&A transactions and thus can adversely affect our CF and FVA groups.
A significant reduction in the number of fee-paying clients and/or the size of transactions on which we are advising in any given period could reduce our revenue and adversely affect our operating results in such period. 15 Table of Contents Our clients may be unable to pay us for our services.
A significant reduction in the number of fee-paying clients and/or the size of transactions on which we are advising that close in any given period could reduce our revenue and adversely affect our operating results in such period. 15 Table of Contents Our clients may be unable to pay us for our services.
Accordingly, we may incur significant costs to comply with United States and international regulations. Our expenses incurred in complying with these regulatory requirements, including legal fees and fees paid to the SEC, FINRA and United States or foreign governmental regulatory authorities or self-regulatory organizations, have increased in recent years.
Accordingly, we may incur significant costs to comply with United States and international regulations. Our expenses incurred in complying with these regulatory requirements, including legal fees and fines or penalties paid to the SEC, FINRA and United States or foreign governmental regulatory authorities or self-regulatory organizations, have increased in recent years.
Fluctuations in our quarterly financial results could, in turn, lead to large adverse movements in the price of our Class A common stock or increased volatility in our stock price generally. Our acquisitions, joint ventures, and strategic investments may result in additional risks and uncertainties in our businesses.
Fluctuations in our quarterly financial results could, in turn, lead to large adverse movements in the price of our Class A common stock or increased volatility in our stock price generally. Our acquisitions and strategic investments may result in additional risks and uncertainties in our businesses.
Our revenue in any given period is dependent on the number of fee-paying clients in such period and the size of transactions on which we are advising, and a significant reduction in the number of fee-paying clients in any given period could reduce our revenue and adversely affect our operating results in such period.
Our revenue in any given period is dependent on the number of fee-paying clients in such period and the size of transactions on which we are advising, so a significant reduction in the number of fee-paying clients or the size of transactions in any given period could reduce our revenue and adversely affect our operating results in such period.
The future market and economic climate may deteriorate because of many factors beyond our control, including rising interest rates or inflation, terrorism or political uncertainty. In addition, the U.S. Federal Reserve changes the federal funds interest rate from time to time, and market interest rates have risen in recent periods.
The future market and economic climate may deteriorate because of many factors beyond our control, including tariffs, elevated interest rates or inflation, terrorism or political uncertainty. In addition, the U.S. Federal Reserve changes the federal funds interest rate from time to time, and market interest rates have risen in recent periods.
Our investment bankers possess substantial experience and expertise and have strong relationships with our advisory clients. As a result, the loss of these financial professionals could jeopardize our relationships with clients and result in the loss of client engagements.
Our financial professionals possess substantial experience and expertise and have strong relationships with our advisory clients. As a result, the loss of these financial professionals could jeopardize our relationships with clients and result in the loss of client engagements.
If other banks and financial institutions enter receivership or become insolvent in the future due to financial conditions affecting the banking system and financial markets, our ability to access our cash, cash equivalents and investments, including transferring funds, making payments or receiving funds, may be threatened and could have a material adverse effect on our business and financial condition.
If any such financial institutions enter receivership or become insolvent in the future due to financial conditions affecting the banking system and financial markets, our ability to access our cash, cash equivalents and investments, including transferring funds, making payments or receiving funds, may be threatened and could have a material adverse effect on our business and financial condition.
Because these fees are contingent, revenue on such engagements, which is recognized when all revenue recognition criteria are met, is not certain and the timing of receipt is difficult to predict and may not occur evenly throughout the year.
Because fees in such engagements are typically contingent, revenue on such engagements, which is recognized when all revenue recognition criteria are met, is not certain and the timing of receipt is difficult to predict and may not occur evenly throughout the year.
Any determination that we have violated the FCPA or other applicable anti-corruption laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects, financial condition, results of operations or the market value of our Class A common stock.
Any determination that we have violated the FCPA (notwithstanding the current pause on FCPA investigations and enforcement action) or other applicable anti-corruption laws could subject us to, among other things, civil and criminal penalties, material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects, financial condition, results of operations or the market value of our Class A common stock.
Goodwill and other intangible assets represent a significant portion of our assets, and totaled $1.32 billion as of March 31, 2024. Goodwill is the excess of cost over the fair market value of net assets acquired in business combinations. We review goodwill and intangible assets at least annually for impairment.
Goodwill and other intangible assets represent a significant portion of our assets, and totaled $1.50 billion as of March 31, 2025. Goodwill is the excess of cost over the fair market value of net assets acquired in business combinations. We review goodwill and intangible assets at least annually for impairment.
Financial markets and economic conditions can be negatively impacted by many factors beyond our control, such as the inability to access credit markets, rising interest rates or inflation, terrorism, political uncertainty, supply chain disruptions, uncertainty in the U.S. federal fiscal or monetary policy and the fiscal and monetary policy of foreign governments, an evolving regulatory environment (and the timing and nature of regulatory reform), climate change, extreme weather events or natural disasters, the emergence or continuation of widespread health emergencies or pandemics, cyberattacks or campaigns, military conflicts or other geopolitical events.
Financial markets and economic conditions can be negatively impacted by many factors beyond our control, such as the inability to access credit markets, rising interest rates or inflation, terrorism, political uncertainty, supply chain disruptions, uncertainty in the U.S. federal fiscal, monetary, or trade policies and the fiscal, monetary and trade policy of foreign governments, an evolving regulatory environment (and the timing and nature of regulatory reform), climate change, extreme weather events or natural disasters, the emergence or continuation of widespread health emergencies or pandemics, cyberattacks or campaigns, military conflicts around the world, such as ongoing conflicts in Eastern Europe and the Middle East, or other geopolitical events.
We accrued net bad debt expense of $7.3 million and $6.4 million in fiscal 2024 and 2023, respectively, related to uncollectible or doubtful accounts receivable and unbilled work in progress. We may not be able to generate sufficient cash in the future to service any future indebtedness.
We accrued net bad debt expense of $9.3 million and $7.3 million in fiscal 2025 and 2024, respectively, related to uncollectible or doubtful accounts receivable and unbilled work in progress. We may not be able to generate sufficient cash in the future to service any future indebtedness.
Our failure to comply with applicable laws or regulations could result in adverse publicity and reputational harm as well as fines, suspensions of personnel or other sanctions, including revocation of any required registration of us or any of our subsidiaries and could impair executive retention or recruitment.
Our failure to comply with applicable laws or regulations could result in adverse publicity and reputational harm as well as fines, suspensions of personnel or other sanctions, including revocation of any required registration of us or any of our subsidiaries and could impair retention or recruitment of executives and/or senior financial professionals.
As of March 31, 2024, 17,590,406 shares of our Class A common stock issuable upon conversion of outstanding Class B common stock (including restricted stock units) are eligible for sale, subject to certain restrictions under the Securities Act of 1933, as amended (the “Securities Act”). 20 Table of Contents While we currently pay a quarterly cash dividend to our stockholders, we may change our dividend policy at any time and we may not continue to declare cash dividends.
As of March 31, 2025, 16,698,119 shares of our Class A common stock issuable upon conversion of outstanding Class B common stock (including restricted stock units) are eligible for sale, subject to certain restrictions under the Securities Act of 1933, as amended (the “Securities Act”). 20 Table of Contents While we currently pay a quarterly cash dividend to our stockholders, we may change our dividend policy at any time and we may not continue to declare cash dividends.
In addition, recently, concerns have arisen with respect to the financial condition of a number of banking organizations in the United States, in particular those with exposure to certain types of depositors and large portfolios of investment securities. We maintain our cash at financial institutions, often in balances that exceed the current FDIC insurance limits.
In addition, in recent years, concerns arose with respect to the financial condition of a number of banking organizations in the United States, in particular those with exposure to certain types of depositors and large portfolios of investment securities. We maintain our cash at financial institutions, often with balances that exceed the current FDIC insurance limits.
In addition to recruiting and organic expansion, we have grown, and intend to continue to grow, our core businesses through acquisitions, joint ventures and strategic investments. We regularly evaluate opportunities to acquire other businesses whose key strategic benefit is the addition of investment banking professionals.
In addition to recruiting and organic expansion, we have grown, and intend to continue to grow, our core businesses through acquisitions and strategic investments. We regularly evaluate opportunities to acquire other businesses whose key strategic benefit is the addition of financial professionals.
Our compensation arrangements and post-employment restriction agreements with our Managing Directors and other professionals may not provide sufficient incentives or protections to prevent these professionals from resigning to join our competitors.
Our compensation arrangements and post-employment restriction agreements with our Managing Directors and other professionals may not provide sufficient incentives or protections to prevent these professionals from resigning to pursue other employment opportunities.
As of March 31, 2024, we had $37.8 million of other liabilities, but may incur additional debt in the future. Our ability to make scheduled payments on or to refinance our debt obligations will depend on our business, financial condition and results of operations.
As of March 31, 2025, we had $69.4 million of other liabilities, but may incur additional debt in the future. Our ability to make scheduled payments on or to refinance our debt obligations will depend on our business, financial condition and results of operations.
In particular, we are exposed to the Euro and the pound sterling, and the weakening of the Euro and other currencies relative to the United States dollar has had, and may continue to have, an adverse effect on our revenue.
In particular, we are exposed to the Euro, the Yen, and the Pound Sterling, and fluctuations in these and other currencies relative to the United States Dollar have had, and may continue to have, an adverse effect on our revenue.
In addition, the operating environment and public trading prices of financial services sector securities can be highly correlated, in particular in times of stress, which may adversely affect the trading price of our Class A common stock and potentially our results of operations. 10 Table of Contents A substantial portion of our revenue is derived from advisory engagements in our CF and FR business segments, including engagements under which our fees include a significant component based upon goals, such as the completion of a transaction.
In addition, the operating environment and public trading prices of financial services sector securities can be highly correlated, in particular in times of stress, which may adversely affect the trading price of our Class A common stock and potentially our results of operations. 10 Table of Contents A substantial portion of our revenue is derived from advisory engagements in our CF and FR business segments, where a substantial portion of our fees tend to be contingent on the occurrence of goals, such as the completion of a transaction.
Fluctuations in foreign currency exchange rates led to a net loss in cash of $(0.4) million for fiscal 2024, compared to a net loss in cash of $(12.1) million for fiscal 2023.
Fluctuations in foreign currency exchange rates led to a net loss in cash of $(0.8) million for fiscal 2025, compared to a net loss in cash of $(0.4) million for fiscal 2024.
Our ability to conduct business and our operating results, including compliance costs, may be adversely affected as a result of any new requirements imposed by the SEC, FINRA or other United States or foreign governmental regulatory authorities or self-regulatory organizations that regulate financial services firms or supervise financial markets.
We are subject to regulation by governmental and self-regulatory organizations in many of the jurisdictions in which we operate. 17 Table of Contents Our ability to conduct business and our operating results, including compliance costs, may be adversely affected as a result of any new requirements imposed by the SEC, FINRA or other United States or foreign governmental regulatory authorities or self-regulatory organizations that regulate financial services firms or supervise financial markets.
We may be subject to attempted security breaches and cyber-attacks and, while none have had a material impact to date, a successful breach could lead to shutdowns or disruptions of our systems or third-party systems on which we rely and potential unauthorized disclosure of sensitive or confidential information.
We have been subject to attempted security breaches and cyber-attacks and, a successful breach could lead to shutdowns or disruptions of our systems or third-party systems on which we rely and potential unauthorized disclosure of sensitive or confidential information.
In addition, the United Kingdom has significantly expanded the reach of its anti-bribery laws. While we have developed and implemented policies and procedures designed to ensure strict compliance by us and our personnel with the FCPA and other anti-corruption laws, such policies and procedures may not be effective in all instances to prevent violations.
While we have developed and implemented policies and procedures designed to ensure strict compliance by us and our personnel with the FCPA and other anti-corruption laws, such policies and procedures may not be effective in all instances to prevent violations.
In recent years, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against financial services companies have been increasing.
In recent years, the volume of claims and amount of damages claimed in litigation and regulatory proceedings against financial services companies continues to be high.
If our systems or third-party systems on which we rely are compromised, do not operate properly or are disabled, we could suffer a disruption of our business, financial losses, liability to clients, regulatory sanctions and damage to our reputation.
If our systems or third-party systems on which we rely are compromised or perceived to be compromised, do not operate properly or are disabled, or if an employee fails to follow proper measures resulting in the release of confidential information, we could suffer a disruption of our business, financial losses, liability to clients, regulatory sanctions and damage to our reputation.
In addition, a disaster or other business continuity problem, such as a pandemic, other man-made or natural disaster or disruption involving electronic communications or other services used by us or third parties with whom we conduct business, could lead us to experience operational challenges.
Additionally, third-party service providers may independently implement AI solutions, which could further complicate our risk landscape. In addition, a disaster or other business continuity problem, such as a pandemic, other man-made or natural disaster or disruption involving electronic communications or other services used by us or third parties with whom we conduct business, could lead us to experience operational challenges.
The holders of our Class B common stock will also be entitled to a separate vote in the event we seek to amend our amended and restated certificate of incorporation to increase or decrease the par value of a class of our common stock or in a manner that alters or changes the powers, preferences or special rights of the Class B common stock in a manner that affects its holders adversely.
Additionally, the holders of our Class B common stock may cause us to make strategic decisions or pursue acquisitions that could involve risks to holders of our Class A common stock or may not be in the best interests of holders of our Class A common stock. 18 Table of Contents The holders of our Class B common stock will also be entitled to a separate vote in the event we seek to amend our amended and restated certificate of incorporation to increase or decrease the par value of a class of our common stock or in a manner that alters or changes the powers, preferences or special rights of the Class B common stock in a manner that affects its holders adversely.
Although we have yet to suffer any significant losses or other damages as a result of operational risks, any interruption or deterioration in the performance of these third parties or failures of their information systems and technology could impair our operations, affect our reputation and adversely affect our business. Our clients typically provide us with sensitive and confidential information.
Any interruption or deterioration in the performance of these third parties or failures of their information systems and technology could impair our operations, affect our reputation and adversely affect our business. Our clients typically provide us with sensitive and confidential information.
Item 1A. Risk Factors Risks Related to Our Business Changing market conditions can adversely affect our business in many ways, including by reducing the volume of the transactions involving our business, which could materially reduce our revenue. As a financial services firm, we are materially affected by conditions in the global financial markets and economic conditions throughout the world.
Item 1A. Risk Factors Risks Related to Our Business Changing market conditions can adversely affect our business in many ways, including by reducing the volume and/or size of the transactions we advise on, which could materially reduce our revenue.
In addition, our business is subject to periodic examination by various regulatory authorities, and we cannot predict the outcome of any such examinations. 18 Table of Contents Risks Related to Our Organizational Structure The dual class structure of our common stock and the ownership of our Class B common stock by the HL Holders through the HL Voting Trust have the effect of concentrating voting control with the HL Voting Trust for the foreseeable future, which limits the ability of our Class A common stockholders to influence corporate matters.
Risks Related to Our Organizational Structure The dual class structure of our common stock and the ownership of our Class B common stock by the HL Holders through the HL Voting Trust have the effect of concentrating voting control with the HL Voting Trust for the foreseeable future, which limits the ability of our Class A common stockholders to influence corporate matters.
As a participant in the financial services industry, we are subject to extensive regulation in the United States and internationally. We are subject to regulation by governmental and self-regulatory organizations in many of the jurisdictions in which we operate.
As a participant in the financial services industry, we are subject to extensive regulation in the United States and internationally.
As of March 31, 2024, the HL Holders through the HL Voting Trust beneficially owned 17,590,406 shares of common stock representing approximately 25.1% of the economic interest, and controlled 77.1% of the voting power of our outstanding capital stock.
As of March 31, 2025, the HL Holders through the HL Voting Trust beneficially owned 16,698,119 shares of common stock representing approximately 23.7% of the economic interest, and controlled 74.9% of the voting power of our outstanding capital stock.
Our revenue in any given period is dependent on the number of fee-paying clients in such period and the size of transactions on which we are advising. We may lose clients as a result of the sale or merger of a client, a change in a client's senior management, competition from other financial advisors and financial institutions and other causes.
We may lose clients as a result of the sale or merger of a client, a change in a client's senior management, competition from other financial advisors and financial institutions and other causes.
If our international business increases relative to our total business, these factors could have a more pronounced effect on our operating results or growth prospects. 12 Table of Contents In recent years, the United States Department of Justice and the SEC have devoted greater resources to enforcement of the FCPA.
If our international business increases relative to our total business, these factors could have a more pronounced effect on our operating results or growth prospects. 12 Table of Contents Although the current U.S.
Substantial legal liability or significant regulatory action against us could have material adverse financial effects or cause significant reputational harm to us, which could seriously harm our business prospects, financial condition and results of operations. 17 Table of Contents Extensive and evolving regulation of our business and the businesses of our clients exposes us to the potential for significant penalties and fines due to compliance failures, increases our costs and may result in limitations on the manner in which our business is conducted.
Extensive and evolving regulation of our business and the businesses of our clients exposes us to the potential for significant penalties and fines due to compliance failures, increases our costs and may result in limitations on the manner in which our business is conducted.
In addition, some of our competitors have more resources than we do, which may allow them to attract some of our existing employees by offering superior compensation and benefits or otherwise.
In addition, recent initiatives at state and federal levels have sought to restrict or limit the enforceability of restrictive covenants, with several states having enacted such legislation, including California. In addition, some of our competitors have more resources than we do, which may allow them to attract some of our existing employees by offering superior compensation and benefits or otherwise.
The valuation of the reporting units requires judgment in estimating future cash flows, discount rates and other factors. In making these judgments, we evaluate the financial health of our reporting units, including such factors as market performance, changes in our client base and projected growth rates.
In making these judgments, we evaluate the financial health of our reporting units, including such factors as market performance, changes in our client base and projected growth rates. Because these factors are ever changing, due to market and general business conditions, our goodwill and indefinite-lived intangible assets may be impaired in future periods.
If we are unable to successfully manage these risks, we will not be able to implement our growth strategy, which ultimately could materially adversely affect our business, financial condition and results of operations. In the case of joint ventures, we are subject to additional risks and uncertainties relating to governance and controls.
If we are unable to successfully manage these risks, we will not be able to implement our growth strategy, which ultimately could materially adversely affect our business, financial condition and results of operations. 11 Table of Contents Goodwill and other intangible assets represent a significant portion of our assets, and an impairment of these assets could have a material adverse effect on our financial condition and results of operations.
Although we determined that it is not more likely than not that the fair values of our goodwill and intangible assets were less than their carrying values during fiscal 2024 and fiscal 2023, annual impairment reviews of indefinite-lived intangible assets or any future impairment of goodwill or other intangible assets would result in a non-cash charge against earnings, which would adversely affect our results of operations.
Annual impairment reviews of indefinite-lived intangible assets or any future impairment of goodwill or other intangible assets would result in a non-cash charge against earnings, which would adversely affect our results of operations. The valuation of the reporting units requires judgment in estimating future cash flows, discount rates and other factors.
For example, on May 10, 2023, the staff of the SEC's Division of Enforcement proposed a potential settlement with the Company to resolve an investigation of the Company's compliance with records preservation requirements related to business communications sent over off-channel electronic messaging platforms.
For example, on August 8, 2023, we reached an agreement on an Offer of Settlement with the SEC to resolve an administrative and cease-and-desist proceeding concerning the Company's compliance with records preservation requirements related to business communications sent over off-channel electronic messaging platforms. As part of the agreement, the Company paid a $15 million civil penalty.
Removed
For example, we may be dependent upon, and subject to, liability, losses or reputational damage relating to personnel, controls and systems that are not fully under our control.
Added
As a financial services firm, we are materially affected by conditions in the global financial markets and economic conditions throughout the world.
Removed
In addition, disagreements between us and our joint venture partners may negatively impact our business and profitability. 11 Table of Contents Goodwill and other intangible assets represent a significant portion of our assets, and an impairment of these assets could have a material adverse effect on our financial condition and results of operations.
Added
The current U.S. administration has implemented, and continues to implement, significant and rapid changes in federal government operations and policies, including international trade policies, which may impact economic stability, the financial markets and the financial services industry broadly.
Removed
Because these factors are ever changing, due to market and general business conditions, our goodwill and indefinite-lived intangible assets may be impaired in future periods. Our international operations are subject to certain risks, which may affect our revenue. In fiscal 2024, we earned approximately 30% of our revenue from our international operations.
Added
Conditions such as an economic recession, stagflation, rising unemployment, the effects of tariffs, trade wars, elevated interest rates, inflationary prices, terrorism or political uncertainty and other factors beyond our control may adversely affect demand for our services and the ability to manage costs associated with employees and vendors.
Removed
As a result of market volatility and disruption in recent years, the United States and other governments have taken unprecedented steps to try to stabilize the financial system, including providing assistance to financial institutions and taking certain regulatory actions.
Added
Many of our larger clients are non-United States entities.
Removed
The full extent of the effects of these actions and of legislative and regulatory initiatives (including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”)) implemented in connection with, and as a result of, such extraordinary disruption and volatility is uncertain, both as to the financial markets and participants in general, and as to us in particular.
Added
Presidential administration has signed an executive order to pause, subject to certain exceptions, the initiation of new investigations and enforcement actions under the FCPA, the United States Department of Justice and the SEC have historically devoted significant resources to enforcement of the FCPA. In addition, the United Kingdom has significantly expanded the reach of its anti-bribery laws.
Removed
The SEC has conducted similar investigations of other financial institutions as part of a widely publicized industry sweep that has included publicly announced settlements with multiple firms to date. The Company cooperated fully with the SEC and has settled with the SEC's Division of Enforcement to resolve the investigation that included a $15 million civil penalty.
Added
As cyber-attack techniques evolve in response to enhanced detection and protection measures, cyber-attacks/threats/incidents could persist for an extended period of time before detection or escalation. There can be no assurance that the cybersecurity protections and controls utilized by us, or by our third parties on whom we rely, will be effective within this cyber threat landscape.
Removed
Additionally, the holders of our Class B common stock may cause us to make strategic decisions or pursue acquisitions that could involve risks to holders of our Class A common stock or may not be in the best interests of holders of our Class A common stock.
Added
For example, phishing and email spoofing attacks often seek to obtain information to impersonate employees or clients in order to, among other things, direct fraudulent bank transfers or obtain valuable information via social engineering. The proliferation of deepfake technology adds to these risks.
Added
Fraudulent transfers resulting from phishing attacks or email spoofing of our employees could result in a material loss of assets, reputational harm or legal liability and in turn materially adversely affect our business. In addition, our employees are responsible for following proper measures to maintain the confidentiality of information we hold.
Added
We are exploring the integration of artificial intelligence technologies (“AI”) into our operations.
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The deployment of AI, which relies on substantial data volumes, introduces risks such as potential leakage of confidential or proprietary information, unauthorized access, misuse, or theft of sensitive data, and the possibility of competitors adopting AI more effectively, which could materially impact our business, financial condition, results of operations, or market share.
Added
Our revenue in any given period is dependent on the number of fee-paying clients in such period and the size of transactions on which we are advising that close during such period.
Added
Substantial legal liability or significant regulatory action against us could have material adverse financial effects or cause significant reputational harm to us, which could seriously harm our business prospects, financial condition and results of operations.
Added
In addition, our business is subject to periodic examination by various regulatory authorities, and we cannot predict the outcome of any such examinations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur management team, including our Chief Information Officer, Senior VP Global IT Operations and IT Security Director, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Biggest changeThe cybersecurity management team, including our Chief Information Officer, Executive VP IT Operations and IT Security Director, is responsible for assessing and managing material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Cybersecurity Governance Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the "Committee") oversight of cybersecurity and other information technology risks. The Committee oversees management’s implementation of our cybersecurity risk management program. The Committee receives regular reports from management on our cybersecurity risks.
Cybersecurity Governance Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated to the audit committee oversight of cybersecurity and other information technology risks. The audit committee oversees management’s implementation of our cybersecurity risk management program. The audit committee receives regular reports from management on our cybersecurity risks.
In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The Committee reports to our full board of directors regarding its activities, including those related to cybersecurity. Our full board of directors also receives briefings from management on our cyber risk management program.
In addition, management updates the audit committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. The audit committee reports to our full board of directors regarding its activities, including those related to cybersecurity. Our full board of directors also receives briefings from management on our cyber risk management program.
The leadership of our cybersecurity team averages approximately 25 years of experience with information technology, with a background deeply rooted in data management and protection and data analytics and brings extensive experience in information security strategy and risk management at Houlihan Lokey and in previous roles.
The leadership of our cybersecurity team averages approximately 26 years of experience with information technology, with a background deeply rooted in data management and protection and data analytics and brings extensive experience in information security strategy and risk management at Houlihan Lokey and in previous roles.
The cybersecurity team leads dedicated cybersecurity meetings with the Chief Corporate Governance & Compliance Officer and key members of the legal and compliance department. This group meets monthly and regularly reviews key cybersecurity metrics.
The cybersecurity team leads dedicated cybersecurity meetings with the Chief Corporate Governance & Compliance Officer and key members of the legal and compliance and internal audit departments. This group meets monthly and regularly reviews key cybersecurity metrics.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease the space in the United States for our offices in Atlanta, Baltimore, Boston, Charlotte, Chicago, Dallas, Houston, McLean (Virginia), Miami, Minneapolis, New York City, and San Francisco; and internationally in Amsterdam, Antwerp, Beijing, Dubai, Frankfurt, Fukuoka, Gurugram, Hong Kong SAR, London, Madrid, Manchester, Milan, Mumbai, Munich, Paris, São Paulo, Shanghai, Singapore, Stockholm, Sydney, Tel Aviv, Tokyo and Zurich.
Biggest changeWe lease the space in the United States for our offices in Atlanta, Baltimore, Boston, Charlotte, Chicago, Dallas, Houston, Los Angeles, McLean (Virginia), Miami, Minneapolis, New York City, and San Francisco; and internationally in Amsterdam, Antwerp, Beijing, Dubai, Frankfurt, Gurugram, Hong Kong SAR, London, Madrid, Manchester, Milan, Mumbai, Munich, Paris, São Paulo, Shanghai, Singapore, Stockholm, Sydney, Tel Aviv, Tokyo and Zurich.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings In the ordinary course of business, from time to time the Company and its affiliates are involved in judicial or regulatory proceedings, arbitrations or mediations concerning matters arising in connection with the conduct of its businesses, including contractual and employment matters.
Biggest changeItem 3. Legal Proceedings In the ordinary course of business, from time to time, we are involved in judicial or regulatory proceedings, arbitrations or mediations concerning matters arising in connection with the conduct of our businesses, including contractual and employment matters.
In view of the inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, the Company cannot estimate the amount of such loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be.
In view of the inherent difficulty of determining whether any loss in connection with such matters is probable and whether the amount of such loss can be reasonably estimated, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in the early stages, we cannot estimate the amount of such loss or range of loss, if any, related to such matters, how or if such matters will be resolved, when they will ultimately be resolved, or what the eventual settlement, fine, penalty or other relief, if any, might be.
Where appropriate, provisions for losses are established in accordance with Accounting Standards Codification ("ASC") 450, “Contingencies” when warranted. Once established, such provisions are adjusted when there is more information available or when an event occurs requiring a change. Item 4. Mine Safety Disclosures Not applicable. 25 Table of Contents PART II
Where appropriate, provisions for losses are established in accordance with Accounting Standards Codification (“ASC”) 450, “Contingencies” when warranted. Once established, such provisions are adjusted when there is more information available or when an event occurs requiring a change. Item 4. Mine Safety Disclosures Not applicable. 25 Table of Contents PART II
In addition, government agencies and self-regulatory organizations conduct periodic examinations and initiate administrative proceedings regarding the Company’s business, including, among other matters, compliance, accounting and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer or its directors, officers or employees.
In addition, government agencies and self-regulatory organizations conduct periodic examinations and initiate administrative proceedings regarding our business, including, among other matters, compliance, accounting and operational matters, that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer or its directors, officers or employees.
Subject to the foregoing, the Company believes, based on current knowledge and after consultation with counsel, that it is not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company.
Subject to the foregoing, we believe, based on current knowledge and after consultation with counsel, that we are not currently party to any material pending proceedings, individually or in the aggregate, the resolution of which would have a material effect on the Company.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities The following table summarizes all of the repurchases of Houlihan Lokey, Inc. equity securities during the quarter ended March 31, 2024: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased and Retired As Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) January 1, 2024 - January 31, 2024 4,948 $ 119.78 — $ 457,712,992 February 1, 2024 - February 29, 2024 — — — 457,712,992 March 1, 2024 - March 31, 2024 39 124.53 — 457,712,992 Total 4,987 $ 119.82 — $ 457,712,992 (1) The shares of Class A common stock repurchased through this program have been retired.
Biggest changePurchases of Equity Securities The following table summarizes all of the repurchases of Houlihan Lokey, Inc. equity securities, on a trade date basis, during the quarter ended March 31, 2025: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1) January 1, 2025 - January 31, 2025 (2) 637 $ 184.49 637 $ 457,712,992 February 1, 2025 - February 28, 2025 — — — 457,712,992 March 1, 2025 - March 31, 2025 (3) 371,324 161.92 371,172 405,524,219 Total 371,961 $ 161.66 371,809 $ 405,524,219 (1) The shares of Class A common stock repurchased through this program have been retired.
The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent we specifically incorporate it by reference into such filing.
The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act except to the extent we specifically incorporate it by reference into such filing.
The graph assumes $100 was invested in each of our Class A common stock, the S&P 500 Index and the S&P 500 Financials Index on March 29, 2018. It also assumes that dividends were reinvested on the date of payment without payment of any commissions.
The graph assumes $100 was invested in each of our Class A common stock, the S&P 500 Index and the S&P 500 Financials Index on March 31, 2020. It also assumes that dividends were reinvested on the date of payment without payment of any commissions.
(3) Total Number of Shares Purchased consists of 39 unvested shares of Class B common stock at an average price per share of $124.53, which were withheld from employees to satisfy tax withholding obligations resulting from the vesting of certain restricted stock awards. 27 Table of Contents Item 6. [Reserved] 28 Table of Contents
(3) Total Number of Shares Purchased includes 152 unvested shares of Class B common stock at an average price per share of $162.15, which were withheld from employees to satisfy tax withholding obligations resulting from the vesting of certain restricted stock awards. 27 Table of Contents Item 6. [Reserved] 28 Table of Contents
(2) Total Number of Shares Purchased consists of 4,948 unvested shares of Class B common stock at an average price per share of $119.78, which were withheld from employees to satisfy tax withholding obligations resulting from the vesting of certain restricted stock awards.
(2) Total Number of Shares Purchased consists of 637 unvested shares of Class B common stock at an average price per share of $184.49, which were withheld from employees to satisfy tax withholding obligations resulting from the vesting of certain restricted stock awards.
As of May 16, 2024, there were approximately thirty holders of record of our Class A common stock and one holder of record of our Class B common stock. This does not include the number of shareholders that hold shares in "street-name" through banks or broker-dealers or through the HL Voting Trust.
As of May 12, 2025, there were approximately thirty-two holders of record of our Class A common stock and one holder of record of our Class B common stock. This does not include the number of shareholders that hold shares in “street-name” through banks or broker-dealers or through the HL Voting Trust.
Our board of directors will take into account: general economic and business conditions; our financial condition and operating results; our available cash and anticipated cash needs; capital requirements; contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders; and such other factors as our board of directors may deem relevant.
Our board of directors will take into account: general economic and business conditions; our financial condition and operating results; our available cash and anticipated cash needs; capital requirements; contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders; and such other factors as our board of directors may deem relevant. 26 Table of Contents Unregistered Sales of Equity Securities and Use of Proceeds None during the quarter ended March 31, 2025.
In April 2022 (after the periods for which disclosure is provided above), the Company’s board of directors authorized a replacement program to the existing July 2021 share repurchase program, which provides for share repurchases of a new aggregate amount of up to $500 million of the Company's Class A common stock and Class B common stock.
On May 12, 2022, the Company announced that the Company's board of directors had authorized a replacement program to the previous July 2021 share repurchase program, which provides for share repurchases of a new aggregate amount of up to $500 million of the Company's Class A common stock and Class B common stock. This share repurchase program does not expire.
Removed
Unregistered Sales of Equity Securities and Use of Proceeds On January 12, 2024, the Company issued 11,258 shares of Class B common stock to certain former employees of a business acquired in 2019.
Added
Stock Performance The stock performance graph below compares the cumulative total stockholder return on our Class A common stock from March 31, 2020 through March 31, 2025, with that of the S&P 500 Index and the S&P 500 Financials Index.
Removed
The Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering and received no proceeds in connection with this issuance.
Removed
The foregoing issuance of unregistered equity securities did not involve any underwriters, underwriting discounts or commissions, or any public offering, and, to the extent any such issuances constituted a sale of unregistered equity securities, we believe that such transaction was originally exempt from the registration requirements of the Securities Act in reliance on Rule 701 promulgated under the Securities Act as a transaction pursuant to a compensatory benefit plan approved by our board of directors, or Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated thereunder, as transactions by an issuer not involving a public offering, based in part on representations from the recipients regarding their investment intention, sophistication, net worth and access to information concerning us. 26 Table of Contents Stock Performance The stock performance graph below compares the cumulative total stockholder return on our Class A common stock from March 29, 2019 through March 28, 2024, with that of the S&P 500 Index and the S&P 500 Financials Index.
Removed
In July 2021, the Company’s board of directors authorized an increase to the existing January 2021 share repurchase program, providing for share repurchases of a new aggregate amount of up to $250 million of the Company's Class A common stock and Class B common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

71 edited+2 added−10 removed22 unchanged
Biggest changeThe change in other (income)/expense, net was primarily due to i) during the fiscal year ended March 31, 2023, the Company accrued for its settlement with the Security and Exchange Commission's Division of Enforcement to resolve an investigation of the Company's compliance with records preservation requirements related to business communications sent over off-channel electronic messaging platforms for $15 million, ii) during the fiscal year ended March 31, 2024, a gain recognized from the reduction in the fair value of an earnout liability issued in connection with a business acquired during 2021, and iii) a net increase in interest income generated by our investment securities.
Biggest changeThe increase in other income, net was primarily due to a net increase in interest income generated by our cash and cash equivalents and investment securities, partially offset by a lower gain recognized on the reduction in the fair value of certain earnout liabilities for the fiscal year ended March 31, 2025, compared with the fiscal year ended March 31, 2024.
Other (Income)/Expense, Net Other (income)/expense, net includes (i) interest income earned on non-marketable and investment securities, cash and cash equivalents, loans receivable from affiliates, employee loans, and commercial paper, (ii) interest expense and fees on our HLI Line of Credit (defined herein), (iii) equity income and/or gains or losses from funds and partnership interests where we have had more than a minor ownership interest or more than minor influence over operations, but do not have a controlling interest and are not the primary beneficiary, (iv) gains and/or losses associated with the reduction/increase of earnout liabilities, and (v) other miscellaneous non-operating expenses.
Other Income, Net Other income, net includes (i) interest income earned on non-marketable and investment securities, cash and cash equivalents, loans receivable from affiliates, employee loans, and commercial paper, (ii) interest expense and fees on our HLI Line of Credit (defined herein), (iii) equity income and/or gains or losses from funds and partnership interests where we have had more than a minor ownership interest or more than minor influence over operations, but do not have a controlling interest and are not the primary beneficiary, (iv) gains and/or losses associated with the reduction/increase of earnout liabilities, and (v) other miscellaneous non-operating expenses.
A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to Retainer Fees and in some cases Progress Fees that may have been received.
A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to Retainer Fees and in some cases Progress Fees that may have been received.
Also, our FVA business segment provides dispute resolution services to clients where fees are usually based on the hourly rates of our financial professionals. Unlike our CF or FR segments, the fees generated in our FVA segment are generally not contingent on the successful completion of a transaction.
Also, our FVA business segment provides dispute resolution services to clients where fees are usually based on the hourly rates of our financial professionals. Unlike our CF or FR segments, the fees generated in our FVA segment are generally not contingent on the successful completion of a transaction.
Actual results may differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period for which they are determined to be necessary. Recognition of Revenue CF provides general financial advisory services in addition to advice on mergers and acquisitions and capital markets offerings.
Actual results may differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period for which they are determined to be necessary. Recognition of Revenue CF provides general financial advisory services and advice on mergers and acquisitions and capital markets offerings.
See Note 2 included in Part II, Item 8 of this Form 10-K for additional information. 36 Table of Contents Provision for Income Taxes The Company files consolidated federal income tax returns, as well as consolidated and separate returns in state and local jurisdictions, and the Company reports income tax expense on this basis.
See Note 2 and Note 3 included in Part II, Item 8 of this Form 10-K for additional information. 36 Table of Contents Provision for Income Taxes The Company files consolidated federal income tax returns, as well as consolidated and separate returns in state and local jurisdictions, and the Company reports income tax expense on this basis.
FR provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented both through bankruptcy proceedings and through out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities.
FR provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities.
FR provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented both through bankruptcy proceedings and through out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities.
FR provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities.
The amounts and useful lives assigned to acquisition-related intangible assets impact the amount and timing of future amortization expense. Recent Accounting Developments For additional information on recently issued accounting developments and their impact or potential impact on our consolidated financial statements, see Note 2 included in Part II, Item 8 of this Form 10-K. 37 Table of Contents
The amounts and useful lives assigned to acquisition-related intangible assets impact the amount and timing of future amortization expense. Recent Accounting Developments For additional information on recently issued accounting developments and their impact or potential impact, if applicable, on our consolidated financial statements, see Note 2 included in Part II, Item 8 of this Form 10-K. 37 Table of Contents
On August 23, 2019, the Company entered into a syndicated revolving line of credit with the Bank of America, N.A. and certain other financial institutions party thereto, which was amended by a First Amendment to Credit Agreement dated as of August 2, 2022 (the "HLI Line of Credit"), which allows for borrowings of up to $100 million (and, subject to certain conditions, provides the Company with an uncommitted expansion option, which, if exercised in full, would provide for a total credit facility of $200 million), and matures on August 23, 2025 (or if such date is not a business day, the immediately preceding business day).
On August 23, 2019, the Company entered into a syndicated revolving line of credit with the Bank of America, N.A. and certain other financial institutions party thereto, which was amended by a First Amendment to Credit Agreement dated as of August 2, 2022 (the “HLI Line of Credit”), which allows for borrowings of up to $100 million (and, subject to certain conditions, provides the Company with an uncommitted expansion option, which, if exercised in full, would provide for a total credit facility of $200 million), and matures on August 23, 2025 (or if such date is not a business day, the immediately preceding business day).
Executive Overview Established in 1972, Houlihan Lokey is a global investment bank with expertise in mergers and acquisitions, capital markets, financial restructurings, and financial and valuation advisory. With offices in the Americas, Europe, the Middle East, and the Asia-Pacific region, the Company serves a diverse set of clients including corporations, institutions, and governments worldwide.
Executive Overview Established in 1972, Houlihan Lokey is a global investment bank with expertise in mergers and acquisitions, capital markets, financial restructurings and liability management, and financial and valuation advisory. With offices in the Americas, Europe, the Middle East, and the Asia-Pacific region, the Company serves a diverse set of clients including corporations, institutions, and governments worldwide.
In general, advisory fees are paid at the time an engagement letter is signed (“Retainer Fees”), during the course of the engagement (“Progress Fees”), or upon the successful completion of a transaction or engagement (“Completion Fees”). CF provides general financial advisory services in addition to advice on mergers and acquisitions and capital markets offerings.
In general, advisory fees are paid at the time an engagement letter is signed (“Retainer Fees”), during the course of the engagement (“Progress Fees”), or upon the successful completion of a transaction or engagement (“Completion Fees”). CF provides general financial advisory services and advice on mergers and acquisitions and capital markets offerings.
The revenues by segment represents each segment's revenues, and the profit by segment represents profit for each segment before corporate expenses, Other (income)/expense, net, and income taxes.
The revenues by segment represents each segment's revenues, and the profit by segment represents profit for each segment before corporate expenses, other income, net, and income taxes.
As of March 31, 2024, we were, and expect to continue to be, in compliance with such covenants. As of March 31, 2024, no principal was outstanding under the HLI Line of Credit. The majority of the Company's payment obligations and commitments pertain to routine operating leases.
As of March 31, 2025, we were, and expect to continue to be, in compliance with such covenants. As of March 31, 2025, no principal was outstanding under the HLI Line of Credit. The majority of the Company's payment obligations and commitments pertain to routine operating leases.
Generally, a portion of the cash bonus is deferred and paid in the third quarter of the fiscal year in which the bonus is awarded. We refer to the ratio of our employee compensation and benefits expenses to our revenues as our "Compensation Ratio." Non-Compensation Expense.
Generally, a portion of the cash bonus is deferred and paid in the third quarter of the fiscal year in which the bonus is awarded. We refer to the ratio of our employee compensation and benefits expenses to our revenues as our “Compensation Ratio.” Non-Compensation Expense.
As a result of these conditions, such deferred consideration would be expensed as compensation in current and future periods and has been accrued as liabilities on the Consolidated Balance Sheets as of March 31, 2024 and 2023.
As a result of these conditions, such deferred consideration would be expensed as compensation in current and future periods and has been accrued as liabilities on the Consolidated Balance Sheets as of March 31, 2025 and March 31, 2024.
Our current liabilities include deferred income, accounts payable and accrued expenses, accrued salaries and bonuses, income taxes payable, and current portion of loan obligations. Our cash and cash equivalents include cash held at banks. We maintain moderate levels of cash on hand in support of regulatory requirements for our registered broker-dealers.
Our current liabilities include deferred income, accounts payable and accrued expenses, accrued salaries and bonuses, income taxes payable, and current portion of other liabilities. Our cash and cash equivalents include cash held at banks. We maintain moderate levels of cash on hand in support of regulatory requirements for our registered broker-dealers.
Our liquidity is highly dependent upon cash receipts from clients that are generally dependent upon the successful completion of transactions as well as the timing of receivables collections, which typically occur within 60 days of billing. As of March 31, 2024 and 2023, we had $200 million and $182 million of Accounts receivable, net of credit losses, respectively.
Our liquidity is highly dependent upon cash receipts from clients that are generally dependent upon the successful completion of transactions as well as the timing of receivables collections, which typically occur within 60 days of billing. As of March 31, 2025 and 2024, we had $257 million and $200 million of Accounts receivable, net of credit losses, respectively.
As of March 31, 2024 and 2023, we had $545 million and $475 million of cash in foreign subsidiaries, respectively. Our excess cash may be invested in short term investments, including treasury securities, commercial paper, certificates of deposit, and investment grade corporate debt securities. Please refer to Note 6 for further detail.
As of March 31, 2025 and 2024, we had $686 million and $545 million of cash in foreign subsidiaries, respectively. Our excess cash may be invested in short-term investments, including treasury securities, commercial paper, certificates of deposit, and investment grade corporate debt securities. Please refer to Note 6 for further detail.
For discussion related to changes in financial condition and the results of operations for fiscal year 2022-related items, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for fiscal year 2023, which was filed with the Securities and Exchange Commission on May 25, 2023.
For discussion related to changes in financial condition and the results of operations for fiscal year 2023-related items, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for fiscal year 2024, which was filed with the Securities and Exchange Commission on May 21, 2024.
Results of Consolidated Operations The following is a discussion of our results of operations for the years ended March 31, 2024 and 2023. For a more detailed discussion of the factors that affected the revenues and the operating expenses of our CF, FR, and FVA business segments in these periods, see "Business Segments" below.
Results of Consolidated Operations The following is a discussion of our results of operations for the years ended March 31, 2025 and 2024. For a more detailed discussion of the factors that affected the revenues and the operating expenses of our CF, FR, and FVA business segments in these periods, see “Business Segments” below.
Segment Profit may vary significantly between periods depending on the levels of collaboration among the different segments. (2) Corporate expenses represent expenses that are not allocated to individual business segments such as office of the executives, accounting, information technology, legal and compliance, marketing, and human capital.
Segment profit may vary significantly between periods depending on the levels of collaboration among the different segments. (2) Corporate expenses represent expenses that are not allocated to individual business segments such as those related to executive management, accounting, information technology, legal and compliance, marketing, and human capital.
The decrease in corporate expenses was primarily a result of lower non-compensation expenses for the year ended March 31, 2024, compared with the year ended March 31, 2023. Liquidity and Capital Resources Our current assets comprise cash and cash equivalents, investment securities, accounts receivable, and unbilled work in progress related to fees earned from providing advisory services.
The increase in corporate expenses was primarily a result of higher compensation expenses for the year ended March 31, 2025, compared with the year ended March 31, 2024. Liquidity and Capital Resources Our current assets comprise cash and cash equivalents, investment securities, accounts receivable, and unbilled work in progress related to fees earned from providing advisory services.
As of March 31, 2024 and 2023, we had $192 million and $115 million of Unbilled work in progress, net of credit losses, respectively. 34 Table of Contents Subsequent to the end of fiscal 2024, our Board of Directors declared a quarterly cash dividend of $0.57 per share of common stock, payable on June 15, 2024 to shareholders of record as of the close of business on June 3, 2024.
As of March 31, 2025 and 2024, we had $158 million and $192 million of Unbilled work in progress, net of credit losses, respectively. 34 Table of Contents Subsequent to the end of fiscal 2025, our board of directors declared a quarterly cash dividend of $0.60 per share of common stock, payable on June 15, 2025 to shareholders of record as of the close of business on June 2, 2025.
Houlihan Lokey’s financial professionals deliver meaningful and differentiated advice to clients on strategy and financial decisions employing a rigorous analytical approach coupled with deep product and industry expertise. We operate in three segments: Corporate Finance ("CF"); Financial Restructuring ("FR"); and Financial and Valuation Advisory ("FVA").
Houlihan Lokey’s financial professionals deliver meaningful and differentiated advice to clients on strategy and financial decisions employing a rigorous analytical approach coupled with deep product and industry expertise. We operate in three segments: Corporate Finance (“CF”); Financial Restructuring (“FR”); and Financial and Valuation Advisory (“FVA”).
Our FVA business segment is one of the largest and most respected valuation, financial opinion and financial consulting practices in the United States. As of March 31, 2024, we served our clients globally with 1,853 financial professionals, including 316 Managing Directors.
Our FVA business segment is one of the largest and most respected valuation, financial opinion and financial consulting practices in the United States. As of March 31, 2025, we served our clients globally with 1,893 financial professionals, including 339 Managing Directors.
For the fiscal years ended March 31, 2024, 2023, and 2022, we earned revenues of $570 million, $520 million, and $579 million, respectively, from our international operations.
For the fiscal years ended March 31, 2025, 2024, and 2023, we earned revenues of $687 million, $570 million, and $520 million, respectively, from our international operations.
Corporate expenses represent expenses that are not allocated to individual business segments such as office of the executives, accounting, information technology, legal and compliance, marketing, human capital, including related compensation expense for corporate employees. Business Environment and Outlook Economic and global financial conditions can materially affect our operational and financial performance.
Corporate expenses represent expenses that are not allocated to individual business segments such as those relating to our executive management, accounting, information technology, legal and compliance, marketing, human capital, including related compensation expense for corporate employees. Business Environment and Outlook Economic and global financial conditions can materially affect our operational and financial performance.
The Compensation Ratio was 63% for the years ended March 31, 2024 and 2023. Non-compensation expenses, as a component of operating expenses, were $338.0 million for the year ended March 31, 2024, compared with $319.8 million for the year ended March 31, 2023, an increase of 6%.
The Compensation Ratio was 64% and 63% for the years ended March 31, 2025 and 2024, respectively. Non-compensation expenses, as a component of operating expenses, were $363.6 million for the year ended March 31, 2025, compared with $338.0 million for the year ended March 31, 2024, an increase of 8%.
As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing.
As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; liability management transactions; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The majority of our FR revenues consists of Completion Fees.
As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing.
As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; liability management transactions; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The majority of our FR revenues consists of Completion Fees.
The increase in segment profit was primarily a result of higher revenues and lower compensation expenses as a percentage of revenues for the year ended March 31, 2024, compared with the year ended March 31, 2023.
The increase in segment profit was primarily a result of higher revenues and lower non-compensation expenses for the year ended March 31, 2025, compared with the year ended March 31, 2024.
Employee compensation and benefits expense, as a component of operating expenses, was $1.2 billion for the year ended March 31, 2024, compared with $1.1 billion for the year ended March 31, 2023, an increase of 6%. The increase in employee compensation and benefits expense was primarily due to the increase in revenues for the fiscal year.
Employee compensation and benefits expense, as a component of operating expenses, was $1.52 billion for the year ended March 31, 2025, compared with $1.21 billion for the year ended March 31, 2024, an increase of 26%. The increase in employee compensation and benefits expense was primarily due to the increase in revenues for the fiscal year.
Financing activities resulted in a net outflow of $(240.5) million primarily due to dividends paid, share repurchases, and payments to settle employee tax obligations on share-based awards during the year ended March 31, 2023.
Financing activities resulted in a net outflow of $(250.6) million primarily due to dividends paid, payments to settle employee tax obligations on share-based awards, and share repurchases made during the year ended March 31, 2024.
The increase in revenues was primarily due to a 19% increase in the number of closed transactions for the year ended March 31, 2024, compared with the year ended March 31, 2023. The increase in the number of closed transactions was driven by favorable market conditions for restructuring transactions.
The increase in revenues was primarily due to a 25% increase in the number of closed transactions for the year ended March 31, 2025, compared with the year ended March 31, 2024, which was driven by favorable market conditions.
The increase in revenues was the result of an increase in FR revenues for the year ended March 31, 2024, compared with the year ended March 31, 2023, as described in further detail below.
The increase in revenues was primarily the result of an increase in CF revenues for the year ended March 31, 2025, compared with the year ended March 31, 2024, as described in further detail below.
Base salary and benefits are paid ratably throughout the year. Our annual equity-based bonus awards include fixed share compensation awards and liability classified fixed dollar awards as a component of the annual bonus awards for certain employees.
Base salary and benefits are paid ratably throughout the year. Annual equity-based bonus awards granted prior to December 31, 2024 include fixed share compensation awards and liability classified fixed dollar awards as a component of the annual bonus awards for certain employees.
In our CF business segment, we believe we are an established leader in M&A and capital markets advisory services. Through our FR business segment, we advise on some of the largest and most complex restructurings around the world.
In our CF business segment, we believe we are an established leader in M&A and Capital Solutions. Through our FR business segment, we advise on some of the largest and most complex restructurings and liability management transactions around the world.
See “Risk Factors” for a discussion of some of the factors that can affect our performance. Our fiscal year ends on March 31 of each year. For the fiscal year ended March 31, 2024, we earned revenues of $1.91 billion, an increase of 6% from the $1.81 billion earned during the fiscal year ended March 31, 2023.
See the section entitled “Risk Factors” for a discussion of some of the factors that can affect our performance. Our fiscal year ends on March 31 of each year. For the fiscal year ended March 31, 2025, we earned revenues of $2.39 billion, an increase of 25% from the $1.91 billion earned during the fiscal year ended March 31, 2024.
Based on historical experience, we believe current economic conditions provide a stable environment for M&A and capital markets activities, but the continued threat from inflation and higher interest rates, international conflict and economic disruption provide some uncertainty in the coming quarters.
Based on historical experience, we believe current economic conditions provide a relatively stable environment for M&A and capital markets activities, but the continued threat from sustained elevated interest rates or inflation, international conflict, and international trade policies provide some level of uncertainty in the coming quarters.
In the United States, our dialogue with clients who are evaluating strategic alternatives remains measured as we continue to see concerns around the macro-economic factors mentioned above. 29 Table of Contents Our Financial Restructuring activity has improved as a result of the factors mentioned above (inflation, conflict, and disruption).
In the United States, our dialogue with clients who are evaluating strategic alternatives remains measured as we continue to see concerns around the macro-economic factors mentioned above. Our Financial Restructuring activity has improved as a result of the factors mentioned above (elevated interest rates, global trade policy and conflict).
Financing activities resulted in a net outflow of $(250.6) million primarily due to dividends paid, payments to settle employee tax obligations on share-based awards, and share repurchases made during the year ended March 31, 2024. 35 Table of Contents Year Ended March 31, 2023 Operating activities resulted in a net inflow of $136.3 million for the year ended March 31, 2023, primarily due to net income of $254.2 million and non-cash charges of $250.6 million, partially offset by a decrease in other operating activities of $(368.5) million.
Financing activities resulted in a net outflow of $(329.1) million primarily due to dividends paid, payments to settle employee tax obligations on share-based awards, and share repurchases made during the year ended March 31, 2025. 35 Table of Contents Year Ended March 31, 2024 Operating activities resulted in a net cash inflow of $328.5 million for the year ended March 31, 2024, primarily due to net income of $280.3 million and non-cash charges of $244.5 million, partially offset by a decrease in other operating activities of $(196.4) million.
Revenues for all three business segments are recognized upon satisfaction of the performance obligation and may be satisfied over time or at a point in time. The amount and timing of the fees paid vary by the type of engagement.
Revenues reflect revenues from our CF, FR, and FVA business segments that substantially consist of fees for advisory services. Revenues for all three business segments are recognized upon satisfaction of the performance obligation and may be satisfied over time or at a point in time. The amount and timing of the fees paid vary by the type of engagement.
The provision for income taxes for the year ended March 31, 2024 was $110.2 million, which reflected an effective tax rate of 28%. The provision for income taxes for the year ended March 31, 2023 was $69.8 million, which reflected an effective tax rate of 22%.
The provision for income taxes for the year ended March 31, 2025 was $131.6 million, which reflected an effective tax rate of 25%. The provision for income taxes for the year ended March 31, 2024 was $110.2 million, which reflected an effective tax rate of 28%.
The decrease in segment profit was primarily a result of lower revenues and higher non-compensation expenses for the year ended March 31, 2024, compared with the year ended March 31, 2023. 33 Table of Contents Financial Restructuring Year Ended March 31, 2024 Compared to the Year Ended March 31, 2023 Revenues for FR were $522 million for the year ended March 31, 2024, compared with $396 million for the year ended March 31, 2023, representing an increase of 32%.
The increase in segment profit was primarily a result of higher revenues for the year ended March 31, 2025, compared with the year ended March 31, 2024. 33 Table of Contents Financial Restructuring Year Ended March 31, 2025 Compared to the Year Ended March 31, 2024 Revenues for FR were $544 million for the year ended March 31, 2025, compared with $522 million for the year ended March 31, 2024, representing an increase of 4%.
The loan agreement requires compliance with certain loan covenants including but not limited to the maintenance of minimum consolidated earnings before interest, taxes, depreciation and amortization of no less than $150 million as of the end of any quarterly 12-month period and certain leverage ratios including a consolidated leverage ratio of less than 2.00 to 1.00.
The HLI Line of Credit contains debt covenants which require that the Company maintain certain financial ratios, including but not limited to the maintenance of minimum consolidated earnings before interest, taxes, depreciation and amortization of no less than $150 million as of the end of any quarterly 12-month period and certain leverage ratios including a consolidated leverage ratio of less than 2.00 to 1.00.
The increase in the Company's tax rate during the fiscal year ended March 31, 2024 relative to the fiscal year ended March 31, 2023 was primarily a result of decreased stock compensation deductions and increased taxes due to foreign operations, as well as the release of the provision for an uncertain tax position as a result of the successful closure of a state audit that occurred during the fiscal year ended March 31, 2023 that did not repeat in the fiscal year ended March 31, 2024. 32 Table of Contents Business Segments The following table presents revenues, expenses, and contributions from our continuing operations by business segment.
The decrease in the Company’s tax rate during the year ended March 31, 2025 relative to the year ended March 31, 2024 was primarily a result of the release of the provision for an uncertain tax position as a result of the successful closure of a city audit. 32 Table of Contents Business Segments The following table presents revenues, expenses, and contributions from our continuing operations by business segment.
Corporate Finance Year Ended March 31, 2024 Compared to the Year Ended March 31, 2023 Revenues for CF were $1.11 billion for the year ended March 31, 2024, compared with $1.13 billion for the year ended March 31, 2023, representing a decrease of (2)%.
Corporate Finance Year Ended March 31, 2025 Compared to the Year Ended March 31, 2024 Revenues for CF were $1.53 billion for the year ended March 31, 2025, compared with $1.11 billion for the year ended March 31, 2024, representing an increase of 38%.
As of each fiscal year end, a material portion of our Cash and cash equivalents is reserved to cover accrued, but unpaid bonuses, that are paid the following May and November.
Restricted cash as of March 31, 2025 also included cash held in escrow accounts and collateral to support rent guarantees. As of each fiscal year end, a material portion of our cash and cash equivalents is reserved to cover accrued, but unpaid bonuses, that are paid the following May and November.
Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees. FVA primarily provides valuations of various assets, including: companies; illiquid debt and equity securities; and intellectual property (among other assets and liabilities).
Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees.
Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees. FVA primarily provides valuations of various assets, including: companies; illiquid debt and equity securities; and intellectual property (among other assets and liabilities).
Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees.
Segment profit for CF was $303 million for the year ended March 31, 2024, compared with $354 million for the year ended March 31, 2023, representing a decrease of (15)%.
Segment profit for CF was $474 million for the year ended March 31, 2025, compared with $303 million for the year ended March 31, 2024, representing an increase of 57%.
Corporate Expenses Year Ended March 31, 2024 Compared to the Year Ended March 31, 2023 Corporate expenses were $208 million for the year ended March 31, 2024, compared with $215 million for the year ended March 31, 2023, representing a decrease of (3)%.
Corporate Expenses Year Ended March 31, 2025 Compared to the Year Ended March 31, 2024 Corporate expenses were $271 million for the year ended March 31, 2025, compared with $208 million for the year ended March 31, 2024, representing an increase of 30%.
A summary of our operating, investing, and financing cash flows is as follows: Year Ended March 31, (In thousands) 2024 2023 Operating activities: Net income $ 280,301 $ 254,223 Non-cash charges 244,524 250,560 Other operating activities (196,367) (368,510) Net cash provided by operating activities 328,458 136,273 Net cash used in investing activities (70,406) (3,004) Net cash used in financing activities (250,585) (240,462) Effects of exchange rate changes on cash and cash equivalents (425) (12,065) Net increase/(decrease) in cash, cash equivalents, and restricted cash 7,042 (119,258) Cash, cash equivalents and restricted cash – beginning of period 714,812 834,070 Cash, cash equivalents and restricted cash – end of period $ 721,854 $ 714,812 Year Ended March 31, 2024 Operating activities resulted in a net inflow of $328.5 million for the year ended March 31, 2024, primarily due to net income of $280.3 million and non-cash charges of $244.5 million, partially offset by a decrease in other operating activities of $(196.4) million.
A summary of our operating, investing, and financing cash flows is as follows: Year Ended March 31, (In thousands) 2025 2024 Operating activities: Net income $ 399,711 $ 280,301 Non-cash charges 252,823 244,524 Other operating activities 196,075 (196,367) Net cash provided by operating activities 848,609 328,458 Net cash used in investing activities (265,058) (70,406) Net cash used in financing activities (329,070) (250,585) Effects of exchange rate changes on cash and cash equivalents (756) (425) Net increase in cash, cash equivalents, and restricted cash 253,725 7,042 Cash, cash equivalents and restricted cash – beginning of period 721,854 714,812 Cash, cash equivalents and restricted cash – end of period $ 975,579 $ 721,854 Year Ended March 31, 2025 Operating activities resulted in a net cash inflow of $848.6 million for the year ended March 31, 2025, primarily due to net income of $399.7 million, non-cash charges of $252.8 million, and other operating activities of $196.1 million.
The occurrence and timing of milestone-related payments, such as upon the closing of a transaction, are generally not within our control. Accordingly, revenue and net income in any period may not be indicative of full year results or the results of any other period and may vary significantly from year to year and quarter to quarter.
Accordingly, revenue and net income in any period may not be indicative of full year results or the results of any other period and may vary significantly from year to year and quarter to quarter.
Segment profit for FR was $194 million for the year ended March 31, 2024, compared with $122 million for the year ended March 31, 2023, an increase of 60%.
Segment profit for FR was $209 million for the year ended March 31, 2025, compared with $194 million for the year ended March 31, 2024, an increase of 8%. The increase in segment profit was primarily a result of higher revenues for the year ended March 31, 2025, compared with the year ended March 31, 2024.
As of March 31, 2024 and 2023, our Cash and cash equivalents, Investment securities, and Restricted cash were as follows: (In thousands) March 31, 2024 March 31, 2023 Cash and cash equivalents $ 721,235 $ 714,439 Investment securities 38,005 37,309 Total unrestricted cash and cash equivalents, including investment securities 759,240 751,748 Restricted cash (1) 619 373 Total cash, cash equivalents, and restricted cash, including investment securities $ 759,859 $ 752,121 (1) Restricted cash represents cash deposits in support of two letters of credit for our Frankfurt office as of March 31, 2024 and one letter of credit for our Frankfurt office as of March 31, 2023.
As of March 31, 2025 and 2024, our cash and cash equivalents, investment securities, and restricted cash were as follows: (In thousands) March 31, 2025 March 31, 2024 Cash and cash equivalents $ 971,007 $ 721,235 Investment securities 195,624 38,005 Total unrestricted cash and cash equivalents, including investment securities 1,166,631 759,240 Restricted cash (1) 4,572 619 Total cash, cash equivalents, and restricted cash, including investment securities $ 1,171,203 $ 759,859 (1) Restricted cash as of March 31, 2025 and March 31, 2024 included cash deposits in support of two letters of credit for our Frankfurt office.
Financial and Valuation Advisory Year Ended March 31, 2024 Compared to the Year Ended March 31, 2023 Revenues for FVA remained relatively flat at $286 million for the year ended March 31, 2024, compared with $287 million for the year ended March 31, 2023.
Financial and Valuation Advisory Year Ended March 31, 2025 Compared to the Year Ended March 31, 2024 Revenues for FVA were $318 million for the year ended March 31, 2025, compared with $286 million for the year ended March 31, 2024, an increase of 11%.
Year Ended March 31, Change ($ in thousands) 2024 2023 23-'24 Revenues by segment Corporate Finance $ 1,106,826 $ 1,127,126 (2) % Financial Restructuring 521,984 395,733 32 % Financial and Valuation Advisory 285,594 286,588 — % Revenues $ 1,914,404 $ 1,809,447 6 % Segment profit (1) Corporate Finance $ 302,533 $ 354,075 (15) % Financial Restructuring 194,116 121,618 60 % Financial and Valuation Advisory 74,422 81,388 (9) % Total segment profit 571,071 557,081 3 % Corporate expenses (2) 208,210 215,343 (3) % Other (income)/expense, net (27,678) 17,738 (256) % Income before provision for income taxes $ 390,539 $ 324,000 21 % Segment Metrics: Number of Managing Directors Corporate Finance 223 217 3 % Financial Restructuring 54 57 (5) % Financial and Valuation Advisory 39 39 — % Number of closed transactions/Fee Events (3) Corporate Finance 450 503 (11) % Financial Restructuring 126 106 19 % Financial and Valuation Advisory 2,178 2,257 (4) % (1) We adjust the compensation expense for a business segment in situations where an employee residing in one business segment is performing work in another business segment where the revenues are accrued.
Year Ended March 31, Change ($ in thousands) 2025 2024 ’24-’25 Revenues by segment Corporate Finance $ 1,526,756 $ 1,106,826 38 % Financial Restructuring 544,478 521,984 4 % Financial and Valuation Advisory 318,182 285,594 11 % Revenues $ 2,389,416 $ 1,914,404 25 % Segment profit (1) Corporate Finance $ 474,423 $ 302,533 57 % Financial Restructuring 209,306 194,116 8 % Financial and Valuation Advisory 88,583 74,422 19 % Total segment profit 772,312 571,071 35 % Corporate expenses (2) 270,768 208,210 30 % Other income, net (29,791) (27,678) 8 % Income before provision for income taxes $ 531,335 $ 390,539 36 % Segment Metrics: Number of Managing Directors Corporate Finance 240 223 8 % Financial Restructuring 57 54 6 % Financial and Valuation Advisory 42 39 8 % Number of closed transactions/Fee Events (3) Corporate Finance 564 450 25 % Financial Restructuring 145 126 15 % Financial and Valuation Advisory 2,441 2,178 12 % (1) We adjust the compensation expense for a business segment in situations where an employee residing in one business segment is performing work in another business segment where the revenues are accrued.
We plan to continue to grow our firm across industry sectors, geographies and products to deliver quality advice and innovative solutions to our clients, both organically and through acquisitions.
We plan to continue to grow our firm across industry sectors, geographies and products to deliver quality advice and innovative solutions to our clients, both organically and through acquisitions. We generate revenues primarily from providing advisory services on transactions that are subject to individually negotiated engagement letters that set forth our fees.
Operating expenses were $1.55 billion for the year ended March 31, 2024, compared with $1.47 billion for the year ended March 31, 2023, an increase of 6%.
For the year ended March 31, 2025, CF revenues increased 38%, FR revenues increased 4%, and FVA revenues increased 11% when compared with the year ended March 31, 2024. Operating expenses were $1.89 billion for the year ended March 31, 2025, compared with $1.55 billion for the year ended March 31, 2024, an increase of 22%.
The decrease in the number of closed transactions was driven by softness in the M&A markets for the year ended March 31, 2024, compared with the year ended March 31, 2023.
The increase in revenues was primarily due to a 15% increase in the number of closed transactions for the year ended March 31, 2025, compared with the year ended March 31, 2024, which was driven by favorable market conditions.
Year Ended March 31, Change ($ in thousands) 2024 2023 '23-'24 Revenues $ 1,914,404 $ 1,809,447 6 % Operating expenses: Employee compensation and benefits 1,213,589 1,147,879 6 % Non-compensation expenses 337,954 319,830 6 % Total operating expenses 1,551,543 1,467,709 6 % Operating income 362,861 341,738 6 % Other (income)/expense, net (27,678) 17,738 (256) % Income before provision for income taxes 390,539 324,000 21 % Provision for income taxes 110,238 69,777 58 % Net income attributable to Houlihan Lokey, Inc. $ 280,301 $ 254,223 10 % 31 Table of Contents Year Ended March 31, 2024 versus March 31, 2023 Revenues were $1.91 billion for the year ended March 31, 2024, compared with $1.81 billion for the year ended March 31, 2023, representing an increase of 6%.
Year Ended March 31, Change ($ in thousands) 2025 2024 ’24-’25 Revenues $ 2,389,416 $ 1,914,404 25 % Operating expenses: Employee compensation and benefits 1,524,268 1,213,589 26 % Non-compensation expenses 363,604 337,954 8 % Total operating expenses 1,887,872 1,551,543 22 % Operating income 501,544 362,861 38 % Other income, net (29,791) (27,678) 8 % Income before provision for income taxes 531,335 390,539 36 % Provision for income taxes 131,624 110,238 19 % Net income attributable to Houlihan Lokey, Inc. $ 399,711 $ 280,301 43 % 31 Table of Contents Year Ended March 31, 2025 versus March 31, 2024 Revenues were $2.39 billion for the year ended March 31, 2025, compared with $1.91 billion for the year ended March 31, 2024, representing an increase of 25%.
Investing activities resulted in a net outflow of $(3.0) million for the year ended March 31, 2023, primarily due to acquisitions of property and equipment, cash consideration used for the acquisition of Oakley Advisory, LLC, and purchases of investment securities, partially offset by the sale or maturity of investment securities.
Investing activities resulted in a net outflow of $(265.1) million for the year ended March 31, 2025, primarily due to purchases of investment securities and cash consideration transferred in connection with business acquisitions.
We advise public and private institutions on a wide variety of situations, including buy-side and sell-side transactions, as well as leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, and advise financial sponsors on all types of transactions. The majority of our CF revenues consists of Completion Fees.
We advise public and private institutions, including financial sponsors, on a wide variety of matters, including buy-side and sell-side M&A transactions, debt and equity financings in both the private and public markets, and other corporate finance transactions. The majority of our CF revenues consists of Completion Fees.
We advise public and private institutions on a wide variety of situations, including buy-side and sell-side transactions, as well as leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, and advise financial sponsors on all types of transactions. The majority of our CF revenues consists of Completion Fees.
We advise public and private institutions, including financial sponsors, on a wide variety of matters, including buy-side and sell-side M&A transactions, debt and equity financings in both the private and public markets, and other corporate finance transactions. The majority of our CF revenues consists of Completion Fees.
The increase in non-compensation expenses was primarily a result of an increase in professional fees and rent expense, partially offset by a decrease in depreciation and amortization expense and other operating expenses.
The increase in non-compensation expenses was primarily a result of an increase in depreciation and amortization, other operating expenses, and information technology and communications expenses, partially offset by a decrease in professional fees. Other income, net increased to $(29.8) million for the year ended March 31, 2025, compared with $(27.7) million for the year ended March 31, 2024.
Segment profit for FVA was $74 million for the year ended March 31, 2024, compared with $81 million for the year ended March 31, 2023, representing a decrease of (9)%. The decrease in segment profit was primarily a result of higher non-compensation expenses for the year ended March 31, 2024, compared with the year ended March 31, 2023.
Segment profit for FVA was $89 million for the year ended March 31, 2025, compared with $74 million for the year ended March 31, 2024, representing an increase of 19%.
We continue to remain optimistic about the current restructuring outlook over the short to medium term due to higher interest rates, record levels of company leverage, inflation, supply-chain issues, recent geopolitical events, and contracting monetary policy.
We continue to remain optimistic about the current restructuring and liability management outlook over the short to medium term due to elevated interest rates, record levels of company leverage, recent geopolitical events, global trade policy disruption, and contracting monetary policy. 29 Table of Contents Key Financial Measures Revenues Revenues include fee revenues and reimbursements of expenses (see Note 2 and Note 3 included in Part II, Item 8 of this Form 10-K).
We generate revenues primarily from providing advisory services on transactions that are subject to individually negotiated engagement letters that set forth our fees. A significant portion of our engagements include Progress Fees (as defined herein) consisting of both periodic and milestone-related payments.
A significant portion of our engagements include Progress Fees (as defined herein) consisting of both periodic and milestone-related payments. The occurrence and timing of milestone-related payments, such as upon the closing of a transaction, are generally not within our control.
The decrease in revenues was primarily a result of an 11% decrease in the number of closed transactions, partially offset by an increase in the average transaction fee on closed transactions for the year ended March 31, 2024, compared with the year ended March 31, 2023.
The increase in revenues was primarily due to an increase in the number of Fee Events for the year ended March 31, 2025, compared with the year ended March 31, 2024, driven by improvements in the M&A markets, which affected one or more of the service lines within our FVA business.
Removed
Acquisitions over the last several years include MVP Capital, LLC, in August 2020, an independent advisory firm that provides a range of financial advisory services to clients in the technology, media, and telecommunications sectors.
Added
FVA primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties.
Removed
In October 2021, we acquired GCA Corporation ("GCA"), a global technology-focused investment bank providing M&A advisory and capital markets advisory services in Europe, Japan/Asia, and the United States. The addition of GCA significantly increased the Company's position in the technology sector, which is critical to meeting the needs of our clients as technology increasingly touches every business sector.
Added
FVA primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties.
Removed
In February 2023, we acquired Oakley Advisory, further increasing our global coverage of the digital infrastructure sector and significantly augmenting the existing sector coverage in Europe.
Removed
More recently, the Company acquired 7 Mile Advisors in December 2023, an independent advisory firm that provides a range of investment banking services to clients across the IT services sector, which further enhances our existing deep industry expertise in IT services and expands the firm’s geographic footprint.
Removed
Key Financial Measures Revenues Revenues include fee revenues and reimbursements of expenses (see Note 2 and Note 3 included in Part II, Item 8 of this Form 10-K). Revenues reflect revenues from our CF, FR, and FVA business segments that substantially consist of fees for advisory services.
Removed
These valuations are used for financial reporting, tax reporting, and other purposes. In addition, our FVA business segment renders fairness opinions in connection with mergers and acquisitions and other transactions, and solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions.
Removed
Other (income)/expense, net changed to income of $(27.7) million for the year ended March 31, 2024, compared with expense of $17.7 million for the year ended March 31, 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of March 31, 2023, we had one foreign currency forward contract between the euro and pound sterling with an aggregate notional value of €6.5 million.
Biggest changeDollar and Pound Sterling, with an aggregate notional value of $75.0 million and one foreign currency forward contract between the Swedish Krona and the Pound Sterling, with an aggregate notional value of SEK 79.0 million. As of March 31, 2024, we had one foreign currency forward contract between the U.S.
We maintain an allowance for credit losses that, in our opinion, provides for an adequate reserve to cover losses that may be incurred. Risks Related to Cash and Short Term Investments Our cash is maintained in U.S. and non-U.S. bank accounts. We have exposure to foreign exchange risks through all of our international affiliates, and some of our investments.
We maintain an allowance for credit losses that, in our opinion, provides for an adequate reserve to cover losses that may be incurred. Risks Related to Cash and Short-Term Investments Our cash is maintained in U.S. and non-U.S. bank accounts. We have exposure to foreign exchange risks through all of our international affiliates, and through some of our investments.
Exchange Rate Risk The exchange rate of the U.S. dollar relative to the currencies in the non-U.S. countries in which we operate may have an effect on the reported value of our non-U.S. dollar denominated or based assets and liabilities and, therefore, be reflected as a change in other comprehensive income, net of tax.
Dollar relative to the currencies in the non-U.S. countries in which we operate may have an effect on the reported value of our non-U.S. Dollar denominated or based assets and liabilities and, therefore, be reflected as a change in other comprehensive income, net of tax.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Market Risk and Credit Risk Our business is not capital intensive and we generally do not issue debt or invest in derivative instruments. As a result, we are not subject to significant market risk (including interest rate risk) or credit risk (except in relation to receivables).
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Market Risk and Credit Risk Our business is not capital intensive and we generally do not issue debt or invest in derivative instruments. As a result, our balance sheet is not subject to significant market risk (including interest rate risk) or credit risk (except in relation to receivables).
We maintain our cash and cash equivalents with financial institutions with high credit ratings. Although these deposits are generally not insured, management believes we are not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.
We maintain our cash and cash equivalents with financial institutions with high credit ratings. Although these deposits are generally not insured, management believes we are not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Our cash and cash equivalents are denominated primarily in U.S.
For the years ended March 31, 2024, 2023, and 2022, the net impact of the fluctuation of foreign currencies in other comprehensive income within the Consolidated Statements of Comprehensive Income was $(3.8) million, $(19.5) million, and $(23.2) million, respectively.
For the years ended March 31, 2025, 2024, and 2023, the net impact of the fluctuation of foreign currencies in other comprehensive income within the Consolidated Statements of Comprehensive Income was $3.3 million, $(3.8) million, and $(19.5) million, respectively.
We have analyzed our potential exposure to changes in the value of the U.S. dollar relative to the pound sterling and euro, the primary currencies of our European operations, by performing a sensitivity analysis on our net income, and determined that while our earnings are subject to fluctuations from changes in foreign currency rates, at this time we do not believe we face any material risk in this respect.
Dollar relative to the Pound Sterling and Euro, the primary currencies of our European operations, by performing a sensitivity analysis on our net income, and determined that while our earnings are subject to fluctuations from changes in foreign currency rates, at this time we do not believe we face any material risk in this respect.
Our cash and cash equivalents are denominated primarily in U.S. dollars, pound sterling and euros, and we face foreign currency risk in our cash balances and other assets and liabilities held in accounts outside the U.S. due to potential currency movements and the associated foreign currency translation accounting requirements.
Dollars, Pound Sterling, Euros, and Yen, and we face foreign currency risk in our cash balances and other assets and liabilities held in accounts outside the U.S. due to potential currency movements and the associated foreign currency translation accounting requirements.
However, we believe our cash is not subject to any material interest rate risk, equity price risk, credit risk or other market risk. Consistent with our past practice, we expect to maintain our cash in bank accounts or highly liquid securities.
However, we believe our cash is not subject to any material interest rate risk, equity price risk, credit risk or other market risk. Consistent with our past practice, we expect to maintain our cash in bank accounts or invested in highly liquid securities. Exchange Rate Risk The exchange rate of the U.S.
In addition, the reported amounts of our revenues and expenses may be affected by movements in the rate of exchange between the currencies in the non-U.S. countries in which we operate and the United States dollar, affecting our operating results.
In addition, the reported amounts of our revenues and expenses may be affected by movements in the rate of exchange between the currencies in the non-U.S. countries in which we operate and the U.S. Dollar, affecting our operating results. We have analyzed our potential exposure to changes in the value of the U.S.
From time to time, we enter into transactions to hedge our exposure to certain foreign currency fluctuations through the use of derivative instruments or other methods. As of March 31, 2024, we had one foreign currency forward contract between the U.S. dollar and pound sterling with an aggregate notional value of $38.3 million.
From time to time, we enter into transactions to hedge our exposure to certain foreign currency fluctuations through the use of derivative instruments or other methods. As of March 31, 2025, we had one foreign currency forward contract between the U.S.
The fair value of these foreign currency forward contracts represented a gain included in Other operating expenses of $55 thousand and $35 thousand during the year ended March 31, 2024 and March 31, 2023, respectively.
Dollar and Pound Sterling, with an aggregate notional value of $38.3 million. The fair value of these foreign currency forward contracts represented a gain included in Other operating expenses of $237,000 and $55,000 during the year ended March 31, 2025 and March 31, 2024, respectively.

Other HLI 10-K year-over-year comparisons