"A significant driver of our growth has been our ability to execute on acquisitions. This year was our most active year ever..." - Scott Adelson
— Scott Adelson
03Detailed Report
HLI
Houlihan Lokey Inc
Period
Q4 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 22, 2026
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Executive Summary
Houlihan Lokey reported a strong Q4 2025 performance, with revenues hitting $666.4 million, representing an increase of 28% year-over-year. This marks the highest annual revenue in the firm's history, totaling $2.4 billion for the fiscal year 2025, up 25% compared to the prior year. Management credited growth to successful acquisitions and a diversified service offering that is positioned well despite economic volatility. Looking ahead, the firm remains optimistic about maintaining momentum across its core business lines amid uncertain market conditions.
CEO Scott Adelson highlighted the firm's adaptability and strength in managing through complex markets, stating, "These results are a testament to our business strategy, our diversified business model, and the perseverance of our colleagues around the globe." Linday Alley, CFO, outlined expectations for continued growth driven by increased headcount and ongoing investment in technology and branding, despite predicting high-single-digit growth in adjusted non-compensation expenses for the upcoming fiscal year.
Key Performance Indicators
Revenue
Increasing
666.42M
QoQ: 5.04% | YoY: 28.05%
Gross Profit
Increasing
220.51M
33.09% margin
QoQ: 8.07% | YoY: 15.49%
Operating Income
Increasing
139.21M
QoQ: 2.28% | YoY: 35.55%
Net Income
Increasing
121.92M
QoQ: 27.93% | YoY: 50.38%
EPS
Increasing
1.84
QoQ: 26.90% | YoY: 46.03%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue Performance: Q4 2025 revenues reached $666.4 million, a 28.05% increase year-over-year and 5.04% quarter-over-quarter growth. Operating income stood at $139.2 million with an operating margin of 20.89%.
Profitability Metrics: Net income was $121.9 million, reflecting growth of 50.38% compared to Q4 2024, with an EPS of $1.84. The firm maintained solid gross and operating margins at 33.09% and 20.89% respectively, suggesting strong cost management.
Balance Sheet Overview: Houlihan Lokey’s cash reserves increased to $975.58 million, supporting a strong current ratio of 26.07, indicating excellent liquidity. Total liabilities amounted to $1.645 billion against total assets of $3.819 billion, resulting in a debt-to-equity ratio of 0.201, demonstrating manageable leverage.
Cash Flow Analysis: The company noted a free cash flow of $343.9 million, indicating robust cash generation capabilities amidst sizable investments.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
666.42M
28.05%
5.04%
Gross Profit
220.51M
15.49%
8.07%
Operating Income
139.21M
35.55%
2.28%
Net Income
121.92M
50.38%
27.93%
EPS
1.84
46.03%
26.90%
Key Financial Ratios
Gross Profit Margin
Fair
33.10%
Gross profit margin is moderate, room for improvement in cost management
Operating Profit Margin
Good
20.90%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Good
18.30%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Fair
3.19%
Return on assets is acceptable but below top-tier companies
Return on Equity
Fair
5.61%
Return on equity is acceptable but below top-tier companies
Current Ratio
Strong
26.07
Current ratio indicates excellent liquidity and financial flexibility
Debt to Equity
Conservative
0.20
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Fair Value
21.93x
P/E ratio in line with market averages
Price to Book
Premium
4.92x
Trading at premium to book value, reflects strong intangibles or growth
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