Houlihan Lokey Reports 18% Revenue Growth to $605.3 Million for Q2 2025

Houlihan Lokey, Inc. reported significant financial performance for the three months ended June 30, 2025, with revenues reaching $605.3 million, an 18% increase from $513.6 million in the same period last year. The growth was primarily driven by a 21% rise in Corporate Finance (CF) revenues, which totaled $398.5 million, alongside increases in Financial Restructuring (FR) and Financial and Valuation Advisory (FVA) revenues of 9% and 16%, respectively. Despite the revenue growth, the company's operating income decreased by 5% to $89.8 million, attributed to a 23% rise in total operating expenses, which amounted to $515.5 million.

The increase in operating expenses was largely due to a 19% rise in employee compensation and benefits, totaling $392.8 million, reflecting the company's strategy to align compensation with revenue growth. Non-compensation expenses also surged by 38% to $122.7 million, driven by higher costs related to the revaluation of acquisition contingent consideration and increased depreciation and amortization. The company's net income for the quarter was $97.5 million, a 10% increase from $88.9 million in the prior year, with a significantly reduced effective tax rate of 0.5% compared to 10.9% in the previous year.

In terms of operational metrics, Houlihan Lokey's employee headcount increased, with 244 managing directors in the CF segment, up from 228 a year earlier. The number of closed transactions in CF rose to 125, while FR and FVA segments also reported increases in closed transactions. The company continues to expand its geographic footprint, with revenues from international operations growing to $182.9 million, up from $147.1 million in the prior year.

Strategically, Houlihan Lokey has been active in acquisitions, including the purchase of 7 Mile Advisors, LLC, which involved contingent consideration that impacted financial metrics. The company also reported a decrease in cash and cash equivalents to $793.8 million from $971.0 million at the end of the previous quarter, reflecting cash outflows primarily due to employee tax obligations and dividends paid. Looking ahead, the company anticipates continued growth driven by its advisory services, although it remains cautious about market conditions and the potential impact of economic fluctuations on its operations.