Houlihan Lokey (HLI) Earnings Date & Reports

Key Takeaways

• Houlihan Lokey reported second quarter fiscal 2027 results on October 28, 2026, for the quarter ended September 30, 2026.
• Revenue rose to $692 million, up roughly 5% from $659 million a year earlier and ahead of the approximately $626 million consensus estimate.
• Net income was $110 million, essentially flat versus $111 million in the year-ago quarter, marking a clear sequential rebound from the prior quarter's miss.
• The results followed a difficult fiscal first quarter, when revenue of $511 million and adjusted earnings per share (EPS) of $1.35 fell well short of Wall Street's expectations.
• Investors focused on management's commentary around the mergers and acquisitions (M&A) pipeline, restructuring demand, and fee conversion trends.
• The company maintained its $0.70 per-share quarterly dividend.
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Earnings Context and Why It Matters

Houlihan Lokey is one of the world's leading independent investment banks, consistently ranked among the top global advisors by transaction count. Because the firm earns advisory fees tied directly to deal activity, its quarterly results serve as a real-time barometer of corporate M&A (mergers and acquisitions), capital markets, and restructuring conditions. The second quarter carried extra weight after a disappointing fiscal first quarter, when revenue fell about 16% year over year and both revenue and EPS missed consensus. With shares trading well below their 52-week high and global deal volumes under pressure, investors were looking for evidence that fee generation had stabilized and that the firm's diversified platform could regain momentum.

Reported Results

Houlihan Lokey reported revenue of $692 million for the second quarter of fiscal 2027, up from $659 million in the prior-year period and ahead of the roughly $626 million Wall Street consensus. The result represented a meaningful sequential improvement from the fiscal first quarter's $511 million, reflecting a partial recovery in advisory fee generation.

Net income came in at $110 million, essentially flat versus $111 million a year earlier and a notable rebound from the $78 million reported in the prior quarter. Operating income was $154 million, compared with $151 million in the year-ago period.

On a per-share basis, diluted EPS (earnings per share) rebounded sharply from the fiscal first quarter's $1.35 adjusted figure, which had missed the $1.64 consensus. Heading into the report, analysts had modeled roughly $1.63 in adjusted EPS, though the company's adjusted results include add-backs for acquisition-related amortization and other non-recurring items. Management's discussion centered on fee events across its Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory segments, as well as the strength of its new-business pipeline.

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Market Reaction and Investor Sentiment

Investor sentiment entering the quarter was cautious. Houlihan Lokey's shares had declined from a 52-week high above $200 to the low-$130s as global M&A activity cooled, and the prior quarter's miss had raised concerns about whether weakening deal flow was beginning to weigh on fee generation and conversion rates. Analysts broadly maintained a constructive longer-term view, with a "Moderate Buy" consensus and an average price target near $155, but near-term conviction was limited, with EPS estimates holding essentially flat in the weeks leading up to the report. The second quarter's return to year-over-year revenue growth and stable net income was viewed as an early sign of stabilization, though the market's focus remained on whether the improved momentum could be sustained into the back half of the fiscal year.

Forward Outlook and Key Factors to Monitor

Looking ahead, investors will be watching several signals closely. First, the durability of the M&A recovery is paramount. Global deal volumes softened in recent quarters, and whether announced transactions convert into completed fee events will determine revenue trajectory over the next several quarters.

Second, management's commentary on the pipeline and backlog across Corporate Finance will be critical. A strengthening advisory pipeline, combined with recovering private-equity and sponsor activity, would support the view that the firm's market-leading position by deal count can translate into revenue resilience.

Third, the Financial Restructuring segment remains a potential offset. If corporate distress accelerates, restructuring and liability-management mandates could provide a counterweight to any slowdown in traditional M&A work.

Finally, investors should monitor margin and cost trends, particularly the compensation ratio, which is a key profitability lever for advisory firms. The company's ability to balance hiring and retention against near-term revenue fluctuations will shape profitability as the fiscal year progresses.

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