Houlihan Lokey Inc Q1 2026 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Great. Hi, Scott. Hi, Lindsey. How are you?

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : So I heard the comment and prepared remarks that your views of the business are broadly consistent with last quarter. And so I'm just curious, as it relates to Corporate Finance, I would assume that there's been some market improvement just with sentiment, improving and more optimism in the market more broadly. So I'm just curious if you're seeing that with clients from where you were three months ago, maybe three months ago you were already starting to see that re-acceleration in momentum. But just want to dig in there a bit more. And then just, if you can, just hit on kind of how backlogs have trended if doctors want to move forward on auctions and transactions, and then from a sector perspective as well, if you can touch on that?

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Okay, thanks. Apologies for the background.

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Yeah, if I'm not stuck through, I'll hop back in the queue. But essentially, I just wanted to give a little bit of a sense of how the backlog is refilling? And then if there's sectors that are snapping back faster, and then if there's any areas that aren't because they're still impacted by tariffs, or otherwise?

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Got it. Okay. I'll leave it there, but thank you, guys.

Question: Brendan O'Brien - Wolfe Research LLC - Analyst : Good afternoon and thanks for taking my questions. I just want to touch or follow up on Devin's question a bit. Within Corporate Finance, the top-line trends continue to look very strong, but the year-on-year growth and the number of deals completed has seemed to decelerate a bit. Just want to get a sense as to the breadth of activity that you're seeing in the market today, and specifically around the quality of assets that you're seeing move, and when we can start to see that aperture widen?

Question: Brendan O'Brien - Wolfe Research LLC - Analyst : I totally appreciate that. And I guess for my follow-up, I just want to clarify some of your comments around the non-comp side. You know, specifically, I know you got into the high single-digit non-comp growth rate last quarter. Is that still your expectation for the full year this year, or has something changed, whether it's travel or inflation or anything like that?

Question: Brendan O'Brien - Wolfe Research LLC - Analyst : Great. Thank you for taking my questions.

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Good afternoon, and thanks for taking the question. Scott, hey, guys. Restructuring remained elevated this quarter. I know you gave the outlook for the business as being elevated, but maybe you could just dig down a little bit into anything that you are seeing around liability management versus Chapter 11 traditional restructuring? And then expectations for the forward for each of those? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 29, 2025 / 9:00PM, HLI.N - Q1 2026 Houlihan Lokey Inc Earnings Call

Question: James Yaro - Goldman Sachs Group Inc - Analyst : That's great. Scott or Lindsey, maybe just any thoughts around -- or any color around the growth of your secondaries business, since you did the deal. And then I guess, any thoughts around the cyclical versus structural drivers, and perhaps your expectations for how much growth that business can have over time?

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Great.

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Perfect. And then one quick ticky-tacky one for you, Lindsey. I just want to clarify a previous point. Your commentary is that the growth of non-comp dollars for the fiscal year, is still expected to be in the high single-digits range year on year, is that correct?

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Thank you so much.

Question: Alex Bond - Keefe, Bruyette & Woods, Inc - Analyst : Hey, good afternoon, everyone. Just wanted to maybe drill down on the sponsor side of the market currently. And I know -- referenced earlier that the post-Labor Day market is shaping up, expecting to see an increase there, but kind of across the market more broadly. But I'm wondering if that is consistent with what you're seeing in terms of in the sponsor market as well? And then especially just given some of the recent market tailwinds that we've had. So, yeah, I guess just summarizing, would you expect to see an increase in sponsor activity after that Labor Day period, or could a more broader resumption in sponsor activity maybe take a little bit longer than that? Any color there would be great. Thanks.

Question: Alex Bond - Keefe, Bruyette & Woods, Inc - Analyst : Got it. Okay. That's helpful. And then maybe just as a quick follow-up, I know you mentioned that you continue to expect the US markets can outpace the EMEA region just from an M&A perspective. But I'm curious if you can maybe just drill down a little bit more there? And maybe any trends that you're seeing that are differing there? Or are you expecting to see a broader recovery in volumes in Europe as well, but maybe just stronger in the US? Just any color there would be great as well.

Question: Alex Bond - Keefe, Bruyette & Woods, Inc - Analyst : Got it. Understood. That's helpful. Thank you, guys.

Question: Ryan Kenny - Morgan Stanley - Analyst : Hi. Thanks for taking my question. So you mentioned that you're cautiously optimistic on the environment. And my question is, with markets at all-time highs and deal announcements picking up and tariff headlines coming through, why not just optimistic? What are you hearing from clients that maybe would make them slow down a bit in getting more deals moving through the pipeline?

Question: Ryan Kenny - Morgan Stanley - Analyst : Thank you.

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Hey, good afternoon.

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Scott, you talked about the acquisition environment still being robust and the pipeline being good, but as the environment picks up, does it get a little tougher to close the deals? Or do you still think, regardless of the environment, there's still a lot of opportunity to consolidate it?

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Okay. And then just to follow up on restructuring. I hear you right now the environment's still pretty good. But I guess, based on your history and cyclicality do you see If the Fed's cutting rates? We get through these tariffs, the economic environment does better. Does that business flow or is it just different because of the liability management environment and there's still plenty of room to kind of grow that piece of the puzzle?

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Right, so peak is the new trough?

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : If the interest rates go back to zero? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 29, 2025 / 9:00PM, HLI.N - Q1 2026 Houlihan Lokey Inc Earnings Call

Question: Jim Mitchell - Seaport Global Securities LLC - Analyst : Yeah, that makes sense. Thank you. Sure.

Question: Madeline Daleiden - JPMorgan Chase & Co - Analyst : Good afternoon. This is Madeline Daleiden on for Ken. Thanks for taking our question. You mentioned a strong MD hiring environment in prepared remarks, and I think you've mentioned it in previous quarters as well.But we've been noticing your MD headcount growth has been significantly outpacing overall headcount growth for about the last 12 months. Is this a cognizant choice on your end to concentrate talent at more senior levels, or maybe even consolidating junior talent or administrative roles, or is this more so just reflecting the opportunistic hiring that you're pursuing?

Question: Madeline Daleiden - JPMorgan Chase & Co - Analyst : Okay, great. Thank you. And are there any particular businesses or sectors you're focusing on for future hiring?

Question: Madeline Daleiden - JPMorgan Chase & Co - Analyst : Thank you so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 29, 2025 / 9:00PM, HLI.N - Q1 2026 Houlihan Lokey Inc Earnings Call