Houlihan Lokey(HLI) - 2025 Q1 - Quarterly Report

Financial Performance - Revenues for the three months ended June 30, 2024, were $513.6 million, a 24$415.8 million in the same period of 2023[122]. - Net income attributable to Houlihan Lokey, Inc. was $88.9 million, representing a 45$61.4 million in the prior year[121]. - Total segment profit increased by 31% to $157.2 million, with Corporate Finance segment profit rising by 63$100.4 million[127]. - Operating expenses rose to $418.0 million, a 22$342.5 million in the prior year, driven by a 25% increase in employee compensation and benefits expense[123]. - The Compensation Ratio for the quarter was 64.3%, up from 63.4% in the same quarter last year[123]. Segment Performance - Corporate Finance segment revenues increased by 45% to $328.4 million, while Financial Restructuring segment revenues decreased by 5$117.4 million[127]. - The number of closed transactions in Corporate Finance increased by 22% to 116, while Financial Restructuring closed transactions rose by 10% to 33[127]. - CF revenues increased by 45% to $328.4 million for the three months ended June 30, 2024, compared to$227.1 million in the same period last year[128]. - Segment profit for CF rose by 63% to $100.4 million, driven by increased revenues and lower non-compensation expenses[129]. - FR revenues decreased by 5$117.4 million, primarily due to a decrease in average transaction fees and lower retainer fees[131]. - Segment profit for FR declined by 10% to $39.1 million, attributed to decreased revenues and increased non-compensation expenses[132]. - FVA revenues increased by 4$67.8 million, mainly due to a rise in the number of Fee Events[133]. - Segment profit for FVA grew by 18% to $17.6 million, resulting from increased revenues and decreased compensation expenses[133]. Cash and Liquidity - As of June 30, 2024, cash and cash equivalents totaled$449.7 million, down from $721.2 million as of March 31, 2024[137]. - Net cash used in operating activities was$(64.5) million, a 52% improvement compared to $(133.6) million in the same quarter last year[141]. Foreign Currency and Risk Management - The company had three foreign currency forward contracts outstanding with an aggregate notional value of$67.0 million as of June 30, 2024[153]. - The company has been impacted by changes in exchange rates, with potential future currency fluctuations increasing as international expansion continues[154]. - For the three months ended June 30, 2024, the net impact of foreign currency fluctuations on other comprehensive income was $(2,962) compared to$2,974 for the same period in 2023[151]. - The change in fair value of foreign currency contracts resulted in a net loss of $(521) for the three months ended June 30, 2024, compared to a net gain of$129 for the same period in 2023[153]. - The company maintains cash and cash equivalents primarily in U.S. dollars, pound sterling, and euros, facing foreign currency risk due to potential currency movements[148]. - The company does not face significant market risk or credit risk, as it does not issue debt or invest in derivative instruments[148]. Internal Controls and Compliance - The company's management evaluated the effectiveness of disclosure controls and procedures and concluded they were effective at the reasonable assurance level as of June 30, 2024[157]. - There were no changes in internal control over financial reporting that materially affected the company's internal control during the fiscal quarter ended June 30, 2024[158]. - The company regularly reviews accounts receivable and maintains an allowance for credit losses deemed adequate to cover potential losses[149]. - There has been no material change in the nature of the company's legal proceedings from the descriptions in the 2024 Annual Report[159].