Houlihan Lokey Inc Q2 2026 Earnings Call Transcript

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

Question: Brennan Hawken - Bank of Montreal - Analyst : So thanks for the outlook commentary in your prepared remarks. I appreciate that. You made a reference to the restructuring business and the fact that backlog supports continued strength. We heard from another firm that they were starting to see the new business formation begin to slow in restructuring. You did speak that the outlook in the environment looks a little more constructive. So are you also beginning to see some slowdown in new business activity? Or has that been more consistent for you?

Question: Brennan Hawken - Bank of Montreal - Analyst : Got it. Makes a lot of sense. And then on the other side of that coin, as far as corporate finance, we've heard indications that sponsors are beginning to engage. It certainly seems like your outlook seems to be improving on the corporate finance side, but maybe a little bit more explicitly, are you starting to see the sponsors come back to market? Would you agree with the assessment that, that activity level is picking up into year-end and looks good into calendar 2026? Can you add any color to what you're seeing with the sponsor cohorts, please?

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Could we just start with the FDA and how to think about the growth algorithm there? Obviously, the business has evolved substantially in recent years, and the M&A cycle continues to evolve. So how do you think about the growth profile there over the long-term? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2025 / 9:00PM, HLI.N - Q2 2026 Houlihan Lokey Inc Earnings Call

Question: James Yaro - Goldman Sachs Group Inc - Analyst : Awesome. So just one other one here. Scott, you talked a little bit about the corporate finance timing across fiscal third quarter and fourth quarter. I think you talked about just timing of deals. Is there anything specific that is driving that? Is it just when the deals have arrived on your doorstep or something else as to why as the third is weaker and the fourth is stronger?

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : You have Brian I wanted to add a quick follow-up to Brennan's question on the restructuring. You guys had a press release earlier this week about some health care hires. I know there's been some headlines about stress in the health care and the commercial real estate sector. I was wondering if you could just double-click into restructuring trends and some of that episodic growth, just pockets where you're seeing that?

Question: Devin Ryan - Citizens JMP Securities LLC - Analyst : Got it. That's a good segue into my second question. I was going to ask just about the recent hires in EMEA and APAC. I guess when you think about productivity of the non-US bankers, is there anything like commentary on the time line for ramping the full productivity between US -- or US or just any MD-specific trends there?

Question: Brendan O'Brien - Wolfe Research LLC - Analyst : To start, I want to touch on the last question a bit more. And specifically, there's been a lot of -- the general expectation has been like the recovery will be driven largely by a pickup in US activity, but the data looks like trends in Europe have been quite strong as well. So I just wanted to get a sense as to what the trends are that you're seeing in Europe today relative to the US? And how you think those two fee pools will track over the near to intermediate term?

Question: Brendan O'Brien - Wolfe Research LLC - Analyst : That's helpful color. And then just a follow-up to the discussion on restructuring. Another one of your peers indicated that more of the near-term deal flow that they've been seeing in restructuring has been driven more by traditional Chapter 11 more so than liability management activity. So I just want to get a sense as to whether that is something you're seeing in your own business? And if so, what is driving that shift?

Question: Ryan Kenny - Morgan Stanley - Analyst : I want to start off with how -- can you take us inside the mind of your clients? I mean, you have a unique view into the middle market in the US and Europe? And how are your clients feeling about the economy, are animal spirits as high as they are for the large corporate deals? And what are some of the risks that are top of mind? Is it interest rates? Is it something else?

Question: Ryan Kenny - Morgan Stanley - Analyst : And when you think about, go ahead.

Question: Ryan Kenny - Morgan Stanley - Analyst : And on the sponsor side, how sensitive are clients to doing transactions to interest rates. So if Fed pauses, is that going to have any material impact on the pipeline?