NYSE:HLI
HOULIHAN LOKEY, INC.
A premier middle-market advisory powerhouse delivering strategic M&A, capital raising, and restructuring solutions with robust financial growth and a resilient balance sheet.
Key Metrics
Investment Thesis
Bull Case
Houlihan Lokey offers compelling growth potential with a track record of consistent revenue expansion and improving profitability margins over the last three years. The firm's diversified global footprint and specialization in middle-market transactions provide stable cash flows, while its substantial cash position of $971M supports continued share repurchases and strategic acquisitions.
Bear Case
Investors should consider the cyclical nature of M&A activity which could lead to volatile deal volumes if economic conditions deteriorate. The company faces elevated debt levels relative to equity with $1.64B in liabilities against $2.17B in shareholders' equity, and significant accumulated losses affecting comprehensive income metrics.
About HOULIHAN LOKEY, INC.
Houlihan Lokey Inc. operates as a leading global investment banking and advisory firm serving middle-market clients across the United States, Europe, and Asia. The company generates revenue primarily through strategic advisory, capital raising, and restructuring services for private companies in sectors such as industrials, technology, consumer goods, and healthcare. With total revenue reaching $2.39B in 2025 and net income growing to $399.7M, the firm has demonstrated strong profitability relative to its scale.
Analysis
Management Discussion
The company delivered exceptional financial performance in 2025 with revenue surging 24.9% year-over-year to $2.39B driven by a robust deal pipeline. Net income expanded significantly from $280.3M in 2024 to $399.7M, while operating cash flow of $848.6M underscores strong liquidity management despite significant capital expenditures and share repurchases.
Industry Overview
The global investment banking industry is characterized by high competition among boutique firms and major bulge brackets vying for middle-market mandates. Success depends on deep client relationships, niche sector expertise, and the ability to navigate complex regulatory environments while maintaining fee competitiveness.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $1.81B | $1.91B | $2.39B |
| Cost of Revenue | $1.25B | $1.34B | $1.62B |
| Gross Profit | $557.1M | $571.1M | $772.3M |
| Operating Expenses | $1.47B | $1.55B | $1.89B |
| Operating Income | $341.7M | $362.9M | $501.5M |
| Stock-Based Comp | $156.9M | $166.6M | $168.4M |
| D&A | $58.2M | $28.5M | $41.3M |
| Depreciation | $13.2M | $17.8M | $21.9M |
| Amortization | $45.0M | $10.8M | $19.3M |
| Non-Operating Income | $-17.7M | $27.7M | $29.8M |
| Pre-Tax Income | $324.0M | $390.5M | $531.3M |
| Income Tax | $69.8M | $110.2M | $131.6M |
| Continuing Ops | $254.2M | $280.3M | $399.7M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $254.2M | $280.3M | $399.7M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $254.2M | $280.3M | $399.7M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Cash & Equivalents | $714.4M | $721.2M | $971.0M |
| PP&E (Net) | $88.3M | $136.7M | $149.3M |
| Goodwill | $1.09B | $1.13B | $1.28B |
| Operating Leases | $333.9M | $344.0M | $362.7M |
| Total Assets | $2.97B | $3.17B | $3.82B |
| Deferred Revenue | $40.7M | $33.1M | $48.2M |
| Total Liabilities | $1.36B | $1.33B | $1.64B |
| Shareholders' Equity | $1.61B | $1.84B | $2.17B |
| Paid-In Capital | $643.0M | $739.9M | $843.4M |
| Retained Earnings | $1.03B | $1.16B | $1.39B |
| AOCI | $-62.8M | $-66.6M | $-63.3M |
| Total L&E | $2.97B | $3.17B | $3.82B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $254.2M | $280.3M | $399.7M |
| Non-Cash Adjustments | $123.5M | $98.3M | $123.9M |
| Working Capital Changes | $-241.5M | $-50.2M | $325.0M |
| Cash from Operations | $136.3M | $328.5M | $848.6M |
| Capital Expenditures | $50.7M | $66.7M | $39.7M |
| Cash from Investing | $-3.0M | $-70.4M | $-265.1M |
| Share Buybacks | $48.7M | $25.0M | $52.5M |
| Dividends Paid | $140.4M | $148.5M | $165.2M |
| Cash from Financing | $-240.5M | $-250.6M | $-329.1M |
| FX Effect | $-12.1M | $-425.0K | $-756.0K |
| Net Change in Cash | $-119.3M | $7.0M | $253.7M |
| Beginning Cash | $834.1M | $714.8M | $721.9M |
| Ending Cash | $714.8M | $721.9M | $975.6M |
Frequently Asked Questions
How does HOULIHAN LOKEY, INC. make money?
Strategic advisory services including merger and acquisition facilitation, capital raising activities like IPOs and debt offerings, and specialized restructuring consulting for distressed assets.
What are the main risks for HLI?
Market volatility affecting M&A deal flow volume and valuations, potential regulatory changes impacting advisory fee structures, concentration risk within specific client industries, and sensitivity to interest rate fluctuations on capital raising activity.
What is HLI's competitive advantage?
Extensive global network of industry experts providing deep sector knowledge, strong brand reputation among private middle-market clients, and consistent execution in complex cross-border transactions.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.