Key Highlights

  • Revenue rose 5% to USD 692 million in fiscal Q2 2027, against USD 660 million in the prior-year quarter.
  • Adjusted diluted EPS was USD 1.85, versus USD 1.84 a year earlier, while GAAP diluted EPS reached USD 1.64.
  • Corporate Finance revenue climbed 10% to USD 481 million even though closed transactions fell to 142 from 171.
  • Quarterly dividend of USD 0.70 per share was declared, and 397 thousand shares were repurchased during the quarter.

Houlihan Lokey, Inc. (NYSE:HLI) reported revenue of USD 692 million for the second quarter of fiscal 2027, ended September 30, 2026, up from USD 660 million a year earlier and above a consensus estimate of USD 625.88 million. Adjusted diluted earnings per share were USD 1.85, compared with a consensus estimate of USD 1.63 and USD 1.84 in the prior-year period. GAAP diluted EPS was USD 1.64, against USD 1.63 a year ago.

Adjusted net income attributable to the company was USD 124 million, slightly below USD 127 million in the year-ago quarter, while GAAP net income was USD 109 million versus USD 111 million. CEO Scott Adelson described a market that improved during the quarter, though he said management stays cautious about external volatility.

Segment Mix and Cost Ratios

Corporate Finance generated USD 481 million, up from USD 439 million. The company attributed the gain to a higher average fee on closed deals, helped by transaction mix and better M&A and capital markets conditions, which offset a drop in closings to 142 from 171. Financial Restructuring revenue fell to USD 118 million from USD 134 million as closed transactions declined to 27 from 37, though the average fee rose. Financial and Valuation Advisory revenue grew 7% to USD 93 million, led by non-cyclical businesses, with fee events nearly flat at 1,071.

The adjusted compensation ratio was 61.5%, unchanged from a year earlier, and GAAP compensation was 63.7% of revenue versus 64.2%. Adjusted non-compensation expense rose to USD 91 million from USD 83 million, lifting its ratio to 13.3% from 12.5% on higher rent and other operating costs. The adjusted effective tax rate was 30.0%. Other income fell to USD 5 million from USD 9 million, reflecting lower cash balances and investment returns.

Management Commentary and Capital Position

Management said backlog and activity levels point to growth for the rest of the fiscal year in Corporate Finance, and that restructuring pipelines have strengthened, partly from software sector dislocation. The company maintains a long-term adjusted compensation ratio target of 61.5% for fiscal 2027 and an adjusted effective tax rate between 26% and 28% for the full year. It cited interest rates, geopolitical instability and software sector disruption as ongoing headwinds.

Unrestricted cash and investment securities totaled USD 888 million at quarter end. Repurchases of about 397 thousand shares cost roughly USD 50 million. The firm added 12 managing directors in the quarter, eight of them through the Intrepid Financial Partners acquisition, which closed in September, and named a new chief legal officer.

Lines to Follow in the Next Report

Several datapoints frame the next report. Corporate Finance closings, at 142 in the quarter against 171 a year ago, are the first, since revenue and deal count diverged. Financial Restructuring is second, with 27 closings and revenue of USD 118 million, a segment management describes as lumpy. The cash balance of USD 888 million is third, ahead of deferred cash bonuses for fiscal 2026 scheduled for payment in November. The fourth is the USD 0.70 dividend payable December 15, 2026 to holders of record on December 1, alongside managing director headcount of 267 in Corporate Finance and 57 in Financial Restructuring.