Houlihan Lokey - Earnings Call - Q2 2026

Executive Summary

• Q2 FY26 revenue was $659.5M and GAAP diluted EPS $1.63; adjusted diluted EPS $1.84. Adjusted EPS and revenue were modest beats versus S&P Global consensus (EPS $1.70*, revenue $653.1M*) on stronger Corporate Finance and steady Restructuring, with lower adjusted non‑comp ratio and higher interest income in OIE aiding profitability.
• Corporate Finance revenue rose 21% YoY to $438.7M on a surge in closed transactions; management flagged atypical seasonality with Q4 expected to be stronger than Q3, reflecting backlog timing and momentum in Capital Solutions (now ≥20% of CF).
• Restructuring remained elevated ($133.8M, +2% YoY) with backlog robust despite a slowdown in new formations as rates ease; FVA grew 10% ($87.0M) on more fee events; non‑U.S. regions (EMEA/APAC) outperformed on improving indicators.
• Guidance/tone: CFO reiterated a 61.5% adjusted comp ratio target and high single‑digit non‑comp growth for FY26; adjusted ETR for Q2 was 29.7% with full‑year ETR previously guided to 25–26%; declared a $0.60 dividend payable Dec 15, 2025.
• Stock catalysts: evidence of sponsors returning, strong CF backlog into Q4, and expanding Capital Solutions contribution support estimate upward revisions; resilience in Restructuring tempers downside risk even if macro further improves.

What Went Well and What Went Wrong

What Went Well

• Corporate Finance delivered $439M (+21% YoY) with 171 closed transactions—the highest volume since late‑2021 peak; “Capital markets are wide open, and capital is plentiful… All this has increased overall confidence in the deal‑making appetite”.
• FVA grew 10% YoY on 1,075 fee events, benefiting from improving M&A markets and non‑cyclical lines; management highlighted non‑U.S. strength across EMEA and APAC.
• OIE improved to ~$9M vs ~$5M YoY on higher interest income; adjusted non‑comp ratio fell to 12.5% vs 14.1% YoY, supporting operating leverage.

What Went Wrong

• Average transaction fees declined in CF and FR due to mix, partially offsetting volume gains; comp ratio rose on GAAP to 64.2% (vs 62.7% YoY) reflecting revenue‑linked compensation accruals.
• Restructuring new business formation began to slow as rates eased and macro improved, though backlog remains robust; management cautioned episodic shocks can still spike activity.
• Management noted productivity per banker in EMEA/APAC still lags U.S., suggesting continued ramp investment and potential near‑term margin friction outside the U.S..

Transcript

Operator (participant)

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Houlihan Lokey's Fiscal Second Quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference call is being recorded today, October 30, 2025. I would now like to turn the floor over to the company.

Christopher Crain (General Counsel)

Thank you, Operator, and hello, everyone. By now, everyone should have access to our Second Quarter Fiscal Year 2026 earnings release, which can be found on the Houlihan Lokey website at www.HL.com in the Investor Relations section. Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements. These forward-looking statements, which are usually identified by use of words such as will, expect, anticipate, should, or other similar phrases, are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect, and therefore, you should exercise caution when interpreting and relying on them. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition.

We encourage investors to review our regulatory filings, including the Form 10-Q for the quarter ended September 30, 2025, when it is filed with the SEC. During today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings release and our investor presentation on the HL.com website. Hosting the call today, we have Scott Adelson, Houlihan Lokey's Chief Executive Officer, and Lindsey Alley, Chief Financial Officer. They will provide some opening remarks, and then we will open the call to questions. With that, I'll turn the call over to Scott.

Scott Adelson (CEO)

Thank you, Christopher. Welcome, everyone, to our Second Quarter Fiscal 2026 earnings call. We ended the quarter with revenues of $659 million and adjusted earnings per share of $1.84. Revenues were up 15%, and adjusted earnings per share were up 26% compared to the same period last year. We are pleased with our results for the quarter, which reflect our strong business model and improving market conditions. We have benefited from a steady macro-environment. The volatility of tariff policies, which marked the start of the fiscal year, has quieted. The downward pressure on interest rates has also improved confidence. Capital markets are wide open, and capital is plentiful. All this has increased overall confidence in the deal-making appetite. Should current conditions persist, we believe the second half of the year will show improvement vs the second half of last year.

Our corporate finance business produced $439 million in revenues for the quarter, representing a 21% increase over last year's second quarter. Corporate finance continues to benefit from improving M&A markets, with activity levels increasing as expected. In terms of volume, the number of completed corporate finance transactions in the quarter was the highest since the peak of M&A activity in late 2021. New business generation remains strong, providing visibility into continued growth in fiscal 2027. As we assess the remainder of the current fiscal year, our backlog suggests a shift in deal timing. Currently, we expect corporate finance to deliver a strong fourth quarter relative to the third quarter, making a departure from our typical seasonal patterns and underscoring the momentum building across our platform. Additionally, we continue to see strong growth in our capital solutions business, which is helping to drive solid performance in corporate finance.

Financial restructuring produced $134 million in revenues for the second quarter, a 2% increase vs the same period last year. Financial restructuring continues to perform at elevated levels, even as we see improving market conditions for both M&A and capital markets. Easing interest rates and improving macro-environment have tempered new business activity in restructuring somewhat, but persistent backlog supports expectations for continued strong performance for this group through the balance of the fiscal year. Financial and valuation advisory produced $87 million in revenues for the second quarter, a 10% increase vs the same period last year. FDA, like corporate finance, is benefiting from an improving M&A market with stronger performance in service lines typically affected by M&A and continuing growth in the group's non-cyclical services. Our non-U.S. business performed notably well in the second quarter, with performance in both EMEA and Asia-Pacific regions showing solid growth and improving key indicators, underscoring the consistent brand growth and momentum we are achieving outside the U.S. In the second quarter, we hired five new Managing Directors, and we continue to attract senior talent drawn to our global platform. In addition, since our last earnings call, we have made significant progress on our acquisition pipeline. We are confident that our combination of individual hires and strategic acquisitions will continue to drive strong growth in senior bankers around the world. Our outlook for the second half of fiscal 2026 is positive. We performed well in the first half of the year despite market uncertainties, and we enter the second half of the year with a better macro-environment than we had in the last six months.

If conditions remain on the current trajectory, we are well positioned to continue to experience year-over-year growth. With that, I will turn the call over to Lindsey.

Lindsey Alley (CFO)

Thank you, Scott. Revenues in corporate finance were $439 million for the quarter, up 21% compared to the same period last year. We closed 171 transactions this quarter, up from 131 in the same period last year, and our average transaction fee on closed deals decreased. Financial restructuring revenues were $134 million for the quarter, a 2% increase vs the same period last year. We closed 37 transactions this quarter, compared to 33 in the same quarter last year, and our average transaction fee on closed deals decreased. For financial and valuation advisory, revenues were $87 million for the quarter, a 10% increase from the same period last year. We had 1,075 fee events during the quarter, compared to 903 in the same period last year, a 19% increase.

Turning to expenses, our adjusted compensation expenses were $406 million for the quarter vs $354 million for the same period last year. Our only adjustment was $18 million for deferred retention payments related to certain acquisitions. Our adjusted compensation expense ratio for the second quarter in both fiscal 2026 and 2025 was 61.5%. We expect to maintain our long-term target of 61.5% for our adjusted compensation expense ratio for the balance of the year. Our adjusted non-compensation expenses were relatively flat at $82 million for the quarter, compared to $81 million for the same period last year. Our adjusted non-compensation expense ratio for the second quarter was 12.5%, compared to 14.1% in the same period last year. On a per-employee basis, our adjusted non-compensation expense for the quarter was $30,000 vs $31,000 for the same period last year.

For the quarter, we adjusted out of non-compensation expenses $2.6 million in non-cash acquisition-related amortization. Looking at year-to-date performance, our adjusted non-compensation expenses increased 9.7% versus the same year-to-date period last year, consistent with our expectations for the fiscal year. Our other income and expense produced income of approximately $9 million vs income of approximately $5 million in the same period last year. The improvement was primarily driven by higher interest income earned on cash balances and investment securities. Our adjusted effective tax rate for the quarter was 29.7%, compared to 31.3% for the same quarter last year. The decrease was primarily a result of decreased state taxes and decreased taxes due to foreign operations. For the second quarter fiscal 2026, we adjusted out of our effective tax rate the effects of non-deductible acquisition-related costs.

Turning to the balance sheet, we ended the quarter with approximately $1.1 billion of unrestricted cash and investment securities. As a reminder, we will pay our deferred cash bonuses related to fiscal 2025 in November, which will reduce our balance sheet cash. Also, in our second quarter, we repurchased approximately 210,000 shares, and we will continue to evaluate balance sheet flexibility for acquisitions versus excess cash for share repurchases. With that, Operator, we can open the line for questions.

Operator (participant)

Ladies and gentlemen, at this time, we'll begin the question-and-answer session. To ask a question, you may press star and then one using a touchscreen telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the keys to ensure the best sound quality. Once again, that is star and then one to join the question queue. Our first question today comes from Brennan Hawkin from BMO. Please go ahead with your questions.

Brennan Hawkin (Managing Director and Senior Equity Analyst)

Hey, Scott. Hey, Lindsey. How are you doing?

Scott Adelson (CEO)

Hey, Brennan.

Lindsey Alley (CFO)

Hey, Brennan.

Scott Adelson (CEO)

Just great.

Brennan Hawkin (Managing Director and Senior Equity Analyst)

Thanks for the outlook commentary and your prepared remarks. Appreciate that. You made a reference to the restructuring business and the fact that the 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. Are you also beginning to see some slowdown in new business activity, or has that been more consistent for you?

Scott Adelson (CEO)

No, I mean, I think that what we're saying is that we have started to see the pace of things slowing, but that our backlog is still quite robust. We're also recognizing, as we've seen actually during this quarter, that things can spike in restructuring.

From a flow basis, I would say the lowering of interest rates and the increasing M&A environment just accompany overall does tend to put a damper on the level of restructuring activity. At the same time, as we've seen, there are episodic shocks that continue to add to it.

Brennan Hawkin (Managing Director and Senior Equity Analyst)

Got it. Makes a lot of sense. 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?

Scott Adelson (CEO)

I think we've been really consistent. It is getting better quarter-by-quarter, and clearly after Labor Day, a significant uptick in activity. We think that we just see that continuing.

Lindsey Alley (CFO)

Brennan, I would add, look, I have heard the same commentary from some of our peers. I mean, the sponsor community has been back since the beginning of the year for us. Our mix of sponsor versus strategic is similar this year than it has historically been. I would say it's business as usual for us with the sponsor community, although I do think that some of the larger cap peers, that dynamic is a little bit different. I do agree momentum continues to increase, but they have been a force of our growth since the beginning of the fiscal year.

Brennan Hawkin (Managing Director and Senior Equity Analyst)

Awesome. Thanks for the color.

Lindsey Alley (CFO)

Great, thanks so much.

Operator (participant)

Our next question comes from James Yaro from Goldman Sachs. Please go ahead with your question.

James Yaro (Experienced Equity Research VP)

Thanks a lot for taking the question. Could we just start with financial and valuation advisory 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. How do you think about the growth profile there over the long term?

Scott Adelson (CEO)

Yeah, I mean, I think the way that we like to think about it is it really breaks down into three segments. One of them is really not cyclical, which is our portfolio valuation business, which continues to grow very consistently, very nicely, regardless of cycle. We have an opinion business that a portion of it is tied to the business cycle and a portion of it that is not, honestly. That is more of a hybrid, if you will. Then our transaction advisory services, which we call advisory, is much more tied to the M&A cycle. We don't break out, as you know, the revenues within those segments, but it is a makeup of those three with, I will call it, a meaningful portion of it not being overly cyclical.

James Yaro (Experienced Equity Research VP)

Excellent.

Lindsey Alley (CFO)

I think over the longer run, look, our financial and valuation advisory business. In strong M&A cycles, our financial and valuation advisory business is going to grow. Likely to grow similar to our corporate finance business, but not quite as strong, just given the difference of businesses. In a weaker M&A cycle, it will likely not go down as much as our corporate finance business. I think that it's going to follow, in general, the same direction as our corporate finance business, but just less volatile. Whether that's half or 70% or 30%, it just depends on too many factors. What you're seeing now is pretty typical of what you might see as you're coming into a stronger M&A cycle.

James Yaro (Experienced Equity Research VP)

Awesome. Thanks for that. 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 the third is weaker and the fourth is stronger?

Scott Adelson (CEO)

I mean, I think the way that we think about it is second half of the year historically is stronger than the first half of the year. That's been pretty consistent over time. I think if you look at it, this is consistent with the ramping of the business that we've been talking about. I think that it is as much the momentum we're seeing building in the business as anything else. I don't know. Lindsey, you want to add something to that?

Lindsey Alley (CFO)

Yeah. There is a little bit of mix in there. There is a little bit of timing. It is unusual for us to see this dynamic from a seasonality standpoint. Our kind of general views of the year haven't changed. It's just you're just going to see kind of that difference in seasonality in Q3 vs Q4.

James Yaro (Experienced Equity Research VP)

Super clear. Thank you so much.

Lindsey Alley (CFO)

Appreciate it.

Operator (participant)

Our next question comes from Devin Ryan from Citizens Bank. Please go ahead with your question.

Brian Kleinhanzl (Equity Research Analyst)

Hey, guys. This is Brian Kleinhanzl.

Scott Adelson (CEO)

Hey, Devin. Hey, Brian.

Lindsey Alley (CFO)

Hey, Brian.

Brian Kleinhanzl (Equity Research Analyst)

I wanted to add a quick follow-up to Brendan's question on the restructuring. You guys had a press release earlier this week about some healthcare hires. I know there's been some headlines about stress in the healthcare 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. Thanks.

Scott Adelson (CEO)

Yeah. I mean, from our standpoint, there are always sectors that we see restructuring in, and I think some of them are thematic and some are not. Obviously, something—I'll give you an example—like the decline in alcohol consumption, something like that, which tends to persist for a prolonged period of time, has effects on those businesses to the extent they have leverage. That'd be an example. There are others, obviously, as well. There's been a tremendous amount of news lately, obviously, related to more, I'll call it, idiosyncratic risks associated with individual credits. There are no massive standout sectors at this point. I would say it's very much across the board. At this point, our business is very diversified across geographies as well as industries.

Brian Kleinhanzl (Equity Research Analyst)

Got it. Thank you. That's a good segue into my second question. I was going to ask just about the recent hires in EMEA and Asia-Pacific. I guess when you think about productivity of the non-U.S. bankers, is there anything like commentary on the timeline for ramping the full productivity between U.S., or just any MD-specific trends there? Thanks.

Scott Adelson (CEO)

Yeah. I mean, I think that the productivity does vary by geography. There's no doubt about that. Some of that is just maturation of the business, of the industry. We are, as we noted, seeing really strong growth in both EMEA and Asia-Pacific, and are very happy with how things are coming along in those regions. Having said that, the productivity per banker in those regions does tend to lag the U.S.

Brian Kleinhanzl (Equity Research Analyst)

Got it. Thank you.

Scott Adelson (CEO)

Pleasure.

Operator (participant)

Our next question comes from Brendan O'Brien from Wolfe Research. Please go ahead with your question.

Brendan O'Brien (SVP and Research Analyst)

Good afternoon, and thanks for taking my questions. To start, I wanted to touch on the last question a bit more, and specifically, there's been a lot of—the general expectation has been the recovery will be driven largely by a pickup in U.S. activity. The data looks like trends in Europe have been quite strong as well. I just wanted to get a sense as to what the trends are that you're seeing in Europe today relative to the U.S. and how you think those two pools will track over the near to intermediate term?

Scott Adelson (CEO)

Yeah. I mean, clearly, the U.S. is still obviously the largest part of our market. Having said that, we continue to gain importance in both Asia-Pacific and in EMEA. We are seeing just that continue to grow with time. If you look at the levels of activity that we are seeing year over year in those regions, it is up quite significantly. We feel very good about that. Obviously, the U.S. business, though, is the major driver of our business. Just given the size differences, I mean, for us, in the kind of year-to-date period, EMEA and Asia have outperformed the U.S. corporate finance business. Having said that, we don't know if that's because there's more momentum on the continent or because we're just a much smaller business in those two regions than we are in the U.S. Those two regions have performed well.

We're super excited about our investments there. To answer your medium-term question, and we've said this to investors before, we think that fee pool in Europe for Houlihan Lokey can be as big as the fee pool for us in the U.S. Whether it takes us four years to get there or ten years to get there, we're less focused on the amount of time. We're going to do it deliberately. It's a very exciting market for us. We like the competitive dynamic. It's a step-by-step path to get us to where we want to get in Europe or in EMEA.

Brendan O'Brien (SVP and Research Analyst)

That's helpful color. Just to 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. I just wanted to get a sense as to whether that is something you're seeing in your own business. If so, what is driving that shift?

Scott Adelson (CEO)

Yeah. I mean, we still see quite a bit of liability management. To say that there is a trend away from that towards more traditional Chapter 11, it's probably a little early. We continue to see a pretty healthy amount of liability management business and still some traditional in-court restructurings. I think too early. I think maybe we could better address that three to six months from now when we've just got a little bit more time behind us.

Brendan O'Brien (SVP and Research Analyst)

Thank you for taking my questions.

Operator (participant)

Our next question comes from Ryan Kenny from Morgan Stanley. Please go ahead with your question.

Ryan Kenny (VP of Equity Research)

Hi. Thanks for taking my question. 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 U.S. and Europe. How are your clients feeling about the economy? Are animal spirits as high as they are for the large corporate deals? What are some of the risks that are top of mind? Is it interest rates? Is it something else?

Scott Adelson (CEO)

Yeah. I mean, I think that, again, it's hard to paint. We're so global and in so many industries that it's very hard to paint everything with one brush like that. I think that, in general, we are living in an environment due to geopolitical issues and everything else that just has a greater degree of uncertainty maybe than at other times in the past. That uncertainty is something that does weigh on people. Having said that, the level of noise that people are willing to accept and just get on with business has been quite impressive.

Ryan Kenny (VP of Equity Research)

When you think about— Oh, go ahead.

Scott Adelson (CEO)

I think Lindsey's going to add to that. Go ahead.

Lindsey Alley (CFO)

Yeah. With the larger cap peers, not only did they have kind of the same M&A winter that we went through for a couple of years, they had an administration that was opposed to bigger is better, and they had a regulatory overhang as well. There is probably a bit more pent-up demand for the larger cap, I mean, very large cap transactions, where the middle market has been, during these last, call it, five years, a bit less volatile. We're seeing increasing animal spirits, but there's been a lot of activity in the large cap space in the last six months and maybe a step ahead of what we're seeing in the mid-cap space.

Ryan Kenny (VP of Equity Research)

On the sponsor side, how sensitive are clients to doing transactions to interest rates? If Fed pauses, is that going to have any material impact on the pipeline?

Lindsey Alley (CFO)

Obviously, lower rates are better, but it's really not a material factor. Really, the biggest driver is whether or not capital is available. Right now, capital is extremely plentiful. People can adjust to rates within reason. That affects large cap much more than it affects the middle market.

Ryan Kenny (VP of Equity Research)

Thank you.

Lindsey Alley (CFO)

Sure thing.

Operator (participant)

Our next question comes from Alex Bond from KBW. Please go ahead with your question.

Alex Bond (Senior Research Analyst)

Good afternoon, guys. You've noted that your acquisition pipeline remains pretty strong, and it certainly seems like a competitive hiring environment for senior talent at the moment. I'm curious to what extent this is maybe having an impact on the acquisition front. Have you seen ask prices step up here recently with the hiring environment still very competitive? Is pricing maybe somewhat of an obstacle on the acquisition side at the moment? Thanks.

Lindsey Alley (CFO)

It is very much unchanged from our perspective. Continuing along, we feel really good about the pipeline in both near-term and long-term on it and really have not seen any fundamental shifts at all.

Alex Bond (Senior Research Analyst)

Got it. Okay. Maybe on the capital solutions business, wondering if you could expand upon the results for that area of the business this quarter. You noted it was pretty strong. Was the contribution maybe to the overall corporate finance revenues higher than typical this quarter? Also, how did this compare to last quarter's levels? Thank you.

Scott Adelson (CEO)

Yeah. I think we're going to keep away from specifics to the capital markets business. I will tell you that it has continued to grow very well. We can safely say that that business has grown in this cycle faster than our M&A business. That may not always be the case. M&A is starting to come back. It continues to perform well, and as a percentage of our corporate finance business, and we've said this before, it's now at or above 20% of the total corporate finance business. Getting into the specifics, I think we prefer to wait.

Alex Bond (Senior Research Analyst)

Understood. Great. Thank you both.

Scott Adelson (CEO)

Sure thing.

Operator (participant)

Once again, if you would like to ask a question, please press star and one. To withdraw your questions, you may press star and two. Our next question comes from Nathan Stein from Deutsche Bank. Please go ahead with your question.

Nathan Stein (VP of Equity Research)

Hey, everyone. Thanks for taking the question. I wanted to ask about an increase in, call it, macro-negative headlines recently associated with some outsized or at least unexpected losses at traditional banks and private credit funds, not to mention an ongoing government shutdown. Does any of this impact how either your clients are thinking about doing deals or how you guys are thinking about potential future acquisitions?

Scott Adelson (CEO)

Yeah. We really have not seen any of that having any material impact. I think that all falls under what I was saying, call it. There is just more noise in this environment than in other really improving environments. People seem to be comfortable with a reasonable level of noise. It's not, from our perspective and our acquisitions, affecting it at all.

Nathan Stein (VP of Equity Research)

Thanks. That's helpful. If I could also ask, the business is performing very well broadly, and the stock's performed well this year. Does any of this impact how you guys think about open market share repurchases?

Lindsey Alley (CFO)

It's interesting. The stock performance on the margin does not affect our share repurchases. I think we repurchase shares to the extent that we issue shares as part of the compensation to our employees, and so we do our best to maintain our share count and minimize dilution. We also repurchase shares to the extent we think we have enough excess cash capital to both support our acquisition strategy and have enough to do some share repurchases. Unless there is a significant change in stock price on the downward side, I think our strategy around share repurchases is more taking a look at opportunities that are out there on the acquisition side, making sure we have enough capital to support them, and then to the extent we have excess, repurchasing shares. You can see that we did start a little bit last quarter.

I can't comment on what we will do this quarter or next quarter because it depends. You will see us kind of dribble back into the market on occasion to the extent we feel comfortable with that balance.

Nathan Stein (VP of Equity Research)

All right. Thank you.

Lindsey Alley (CFO)

Thanks, Nate.

Operator (participant)

Ladies and gentlemen, at this time, showing no additional questions, I'd like to turn the floor back over to Scott Adelson for closing comments.

Scott Adelson (CEO)

I want to thank you all for participating in our second quarter fiscal 2026 earnings call. We look forward to updating everyone on our progress when we discuss our third quarter results for fiscal 2026 this winter. Thank you, everybody.

Operator (participant)

Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.