Executive Summary

Record quarter: Q4 FY2025 revenue $666.4M and adjusted diluted EPS $1.96; all three segments grew double/single digits YoY; dividend raised to $0.60 per share .
Broad-based strength: Corporate Finance +44% YoY to $412.7M (147 closed transactions), Financial Restructuring +6% to $164.5M (38 closed), and FVA +15% to $89.2M (1,224 fee events) .
Cost discipline: Adjusted compensation ratio held at 61.5% and adjusted non-comp ratio fell to 12.8%; adjusted tax rate improved to 24.5% due to lower state taxes and audit-related item .
Outlook: Management highlighted macro volatility and refrained from revenue guidance; expects restructuring to remain elevated and reaffirmed 61.5% comp ratio target for FY2026 .
Catalysts: Dividend increase, continued Capital Solutions momentum (record year), and elevated restructuring cycle; expanding sector/geographic coverage via senior hires (Oil & Gas midstream, Digital Infrastructure) .

What Went Well and What Went Wrong

What Went Well
- Strong CF recovery with larger deal size/fees; CF revenues +44% YoY to $412.7M and 147 closes; “average transaction fee continued to grow” (CEO) .
- Elevated restructuring activity; FR revenues +6% YoY to $164.5M; management expects “restructuring to remain at elevated levels” .
- FVA resilience with cyclical and non-cyclical drivers; revenues +15% YoY to $89.2M and 1,224 fee events; portfolio valuation and opinions grew nicely .
What Went Wrong
- Forecastability challenged; management cited “current volatility makes meaningful forecasts difficult” and gave no revenue guidance .
- GAAP comp ratio slightly higher YoY/QoQ to 64.6% in Q4 (seasonality and acquisitions), though adjusted held at 61.5% .
- Macro/tariffs creating sector/geography bifurcation; management noted differential impacts across industrials and regions, adding uncertainty to throughput .

Financial Results

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue ($USD Millions)	$574.957	$634.428	$666.422
Diluted EPS (GAAP) ($)	$1.37	$1.39	$1.76
Adjusted Diluted EPS ($)	$1.46	$1.64	$1.96
Operating Income ($USD Millions)	$130.669	$136.102	$139.205
Compensation Ratio (GAAP, %)	62.7%	63.5%	64.6%
Compensation Ratio (Adjusted, %)	61.5%	61.5%	61.5%
Non-Comp Ratio (GAAP, %)	14.5%	15.0%	14.5%
Non-Comp Ratio (Adjusted, %)	14.1%	13.1%	12.8%
Effective Tax Rate (GAAP, %)	31.3%	34.3%	18.9%
Effective Tax Rate (Adjusted, %)	31.3%	33.3%	24.5%

Segment breakdown

Segment Revenue ($USD Millions)	Q2 2025	Q3 2025	Q4 2025
Corporate Finance	$364.028	$421.602	$412.709
Financial Restructuring	$131.568	$130.942	$164.546
Financial & Valuation Advisory	$79.361	$81.884	$89.167

KPIs

KPI	Q2 2025	Q3 2025	Q4 2025
CF Managing Directors (count)	224	238	240
CF Closed Transactions (count)	131	170	147
FR Managing Directors (count)	58	57	57
FR Closed Transactions (count)	33	41	38
FVA Managing Directors (count)	41	42	42
FVA Fee Events (count)	903	1,005	1,224

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q4 FY2025	$0.57 (declared for Q4 FY2025)	$0.60 (Q2FY26 pay date June 15, 2025)	Raised (~5%)
Adjusted Compensation Ratio	FY2026	61.5% target (company benchmark)	Maintain 61.5% target	Maintained
Adjusted Non-Comp Expense Growth	FY2026	n/a	High single-digit growth expected	New commentary
Adjusted Effective Tax Rate	FY2026	FY2025 adjusted ETR 29.8%	Expect lower adjusted ETR; 1Q FY26 benefit from vesting policy	Lowered trajectory
Revenue guidance	Near-term	n/a	None provided due to volatility	Maintained “no guidance” stance
Other Income & Expense (OIE)	FY2026	n/a	Performance linked to interest rate levels globally	Directional (rate-dependent)

Earnings Call Themes & Trends

Topic	Q2 2025 Mentions	Q3 2025 Mentions	Q4 2025 Mentions	Trend
Macro volatility/forecastability	Positive outlook; recognized uncertainties	“Stronger macro environment,” optimistic outlook	“Current volatility makes meaningful forecasts difficult”; no revenue guidance	Cautious
Tariffs/sector/geography dispersion	n/a	n/a	Sector-by-sector, geography-by-geography impacts; industrials mixed	Emerging headwind
Restructuring cycle	n/a	Strong Q4 seasonality noted	Elevated levels expected; strong Q4 close	Up/Elevated
Capital Solutions momentum	n/a	n/a	Record year; rebranded Capital Solutions; diversified, less volatile revenues	Growing
Private equity fundraising	n/a	n/a	Smaller sponsors constrained; continuation vehicles/directs filling voids	Constrained PE; alternative capital rising
Non-U.S. business	n/a	n/a	Stepwise improvement; gaining share; less impacted vs U.S.	Improving
Mid-market resilience vs large-cap	n/a	n/a	Mid-cap more resilient across cycles	Structural advantage

Management Commentary

“Fiscal 2025 was a record year for our firm as all three groups ended the year with a strong fourth quarter… we are well positioned to handle the uncertainty of current market conditions.” — Scott Adelson, CEO .
“We ended the quarter with revenues of $666 million and adjusted earnings per share of $1.96… Financial Restructuring and Financial and Valuation Advisory produced record revenues for the year.” — CEO prepared remarks .
“Our adjusted compensation expense ratio… was 61.5%. We expect to maintain our target of 61.5% for this ratio in fiscal 2026.” — CFO .
“Our adjusted non-compensation expense… we expect… to grow in the high single digits for fiscal 2026.” — CFO .
“We tend to see a very strong fourth quarter restructuring year after year… not necessarily a reflection of each quarter next year.” — CFO .
“Acquisitions continue to be an important component of our overall growth strategy… we closed 3 acquisitions… expanding our industry, geographic and product reach.” — CEO .

Q&A Highlights

Revenue tracking/visibility: Management emphasized normal throughput but refrained from near-term guidance amid volatility; activity improving “quarter by quarter” .
Tariffs/macro dispersion: Impacts vary by sector/geography; not uniformly negative across industrials; Europe less affected in mid-market .
Restructuring mix/capacity: Expect elevated activity; capacity well above FY2025 levels (historical revenue/MD +40% at Great Recession peak) .
Corporate Finance pipeline/mid vs large-cap: Backlogs “strong and growing”; mid-cap volumes more resilient than large-cap across cycles .
Capital Solutions and sponsors: Sponsor client base ~50% of clients; multiple forms of capital (e.g., continuation vehicles) addressing liquidity needs .

Estimates Context

Comparison vs Wall Street consensus (S&P Global) and actuals

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue Consensus ($USD Millions)	537.591*	604.098*	628.253*
Revenue Actual ($USD Millions)	$574.957	$634.428	$666.422
Revenue Beat/(Miss)	Bold Beat (+$37.4M)*	Bold Beat (+$30.3M)*	Bold Beat (+$38.2M)*
EPS Consensus (Primary EPS) ($)	1.31*	1.52*	1.62*
EPS Actual (Adjusted Diluted) ($)	$1.46	$1.64	$1.96
EPS Beat/(Miss)	Bold Beat (+$0.15)*	Bold Beat (+$0.12)*	Bold Beat (+$0.34)*

Values retrieved from S&P Global.*

Implications: HLI delivered clean beats on both revenue and adjusted EPS for three consecutive quarters, aided by CF throughput improvements, elevated restructuring fees, and disciplined non-comp expense, with an improving adjusted tax rate .

Key Takeaways for Investors

Broad-based strength with three straight quarters of revenue/EPS beats; CF momentum and elevated FR provide dual-cycle support .
Operating leverage intact: adjusted comp ratio sustained at 61.5% and adjusted non-comp ratio trending lower (12.8% in Q4), supporting margin durability .
Near-term visibility limited (no revenue guidance) due to macro/tariffs; expect seasonality and potential FR uplift if macro stress increases .
Capital Solutions (record year) diversifies revenue and reduces cyclicality; continued build-out via senior hires enhances sector coverage and fee mix .
Adjusted effective tax rate expected lower in FY2026 (benefit in Q1), providing EPS tailwind if operations hold .
Mid-market focus and international share gains position HLI to outperform large-cap M&A cycles; Europe/non-U.S. business less impacted by U.S. disruptions .
Dividend raised to $0.60/share and ongoing repurchases signal balanced capital return; supports shareholder yield while offsetting comp dilution .

Appendix: Additional Q4-Period Press Releases (Context)

Oil & Gas coverage expansion: Head of Midstream hire in Houston (strategic sector depth) .
Digital Infrastructure expansion: Senior MD hire to drive TMT/digital infra transactions (pipeline/international reach) .

Cross-Period Trend Snapshot (Q2 → Q3 → Q4)

Revenue progression: $574.96M → $634.43M → $666.42M .
Adjusted EPS progression: $1.46 → $1.64 → $1.96 .
CF throughput: Closed deals 131 → 170 → 147 (seasonal) with higher average fees .
FR resilience: Revenues $131.6M → $130.9M → $164.5M; Q4 seasonality strong; elevated cycle expected ahead .
FVA growth: Fee events 903 → 1,005 → 1,224; non-cyclical portfolio valuation and opinions underpin stability .

HOULIHAN LOKEY, INC. (HLI)·Q4 2025 Earnings Summary