Houlihan Lokey Revenues Slip as Corporate Finance Headwinds Mount
Total revenues fell 15.5% year-over-year to $511 million for the first quarter ended June 30, 2026.
Houlihan Lokey (HLI), the global investment bank, saw total revenues decrease 15.5% year-over-year to $511 million for the first quarter ended June 30, 2026, down from $605 million in the prior-year period.
The decline was led by the Corporate Finance segment, where revenues fell 24% year-over-year to $303 million. The drop was due to a decrease in the average transaction fee on closed deals, driven by the specific mix of transactions completed during the quarter.
Financial Restructuring revenues also retreated, falling 8% year-over-year to $119 million. The segment saw a decline in the volume of closed transactions, with 23 deals compared to 35 in the same period in 2025, though higher average transaction fees partially offset the volume loss.
Growth was concentrated in the Financial and Valuation Advisory business, where revenues rose 13% year-over-year to $89 million. This increase followed a rise in the number of fee events, which climbed to 1,042 from 957 in 2025.
Operating expenses showed mixed movement. The GAAP compensation ratio decreased slightly to 64.3% from 64.9% year-over-year, while the adjusted compensation ratio remained flat at 61.5%. Adjusted non-compensation expenses rose to $100 million from $94 million, primarily due to higher professional fees.
Tax impacts weighed on the bottom line as the GAAP effective tax rate rose to 9.8% from 0.5% year-over-year. The adjusted effective tax rate increased to 12.6% from (0.8)%, a shift due to decreased stock-based compensation deductions.
Capital returns remained steady. The bank declared a quarterly cash dividend of $0.70 per share, maintaining the level established in the fourth quarter of fiscal 2026. Additionally, the company repurchased 348 thousand shares during the first quarter.
Management flagged new headwinds impacting the Corporate Finance business. Instability in the Middle East and disruptions within the technology and software sectors created pressures that began in the previous quarter.