HOULIHAN LOKEY, INC.

Previous wording

Established in 1972, Houlihan Lokey is a global investment bank with expertise in mergers and acquisitions, capital markets, financial restructurings and liability management, and financial and valuation advisory. With offices in the Americas, Europe, the Middle East, and the Asia-Pacific region, the Company serves a diverse set of clients including corporations, institutions, and governments worldwide. Houlihan Lokey’s financial professionals deliver meaningful and differentiated advice to clients on strategy and financial decisions employing a rigorous analytical approach coupled with deep product and industry expertise.

Current wording

Established in 1972, Houlihan Lokey, Inc. is a leading global independent investment bank with expertise in mergers and acquisitions (“M&A”), capital markets, financial restructurings, liability management, and financial and valuation advisory services. We serve a diverse set of clients worldwide, including corporations, financial sponsors and government agencies. We provide our financial professionals with an integrated platform that enables them to deliver meaningful and differentiated advice to our clients. We advise our clients on critical strategic and financial decisions, employing a rigorous analytical approach coupled with deep product and industry expertise. We market our services through our product areas, our industry groups and our Financial Sponsors group, serving our clients in three business segments: Corporate Finance (“CF”), encompassing M&A and capital solutions; Financial Restructuring (“FR”), including restructurings both out-of-court and in formal bankruptcy or insolvency proceedings; and Financial and Valuation Advisory (“FVA”), including financial opinions and a variety of valuation and financial consulting services.

Previous wording

As of March 31, 2025, we served our clients globally with 1,893 financial professionals, including 339 Managing Directors. We plan to continue to grow our firm across industry sectors, geographies and products to deliver quality advice and innovative solutions to our clients, both organically and through acquisitions.

Current wording

As of March 31, 2026, we employed more than 1,900 financial professionals, including 354 Managing Directors. We plan to continue to grow our firm across industry sectors, geographies and products to deliver quality advice and innovative solutions to our clients, both organically and through acquisitions.

Previous wording

We generate revenues primarily from providing advisory services on transactions that are subject to individually negotiated engagement letters that set forth our fees. A significant portion of our engagements include Progress Fees (as defined herein) consisting of both periodic and milestone-related payments. The occurrence and timing of milestone-related payments, such as upon the closing of a transaction, are generally not within our control. Accordingly, revenue and net income in any period may not be indicative of full year results or the results of any other period and may vary significantly from year to year and quarter to quarter.

Current wording

We generate revenues primarily from providing advisory services on transactions that are subject to individually negotiated engagement letters that set forth our fees. A significant portion of our engagements include Progress Fees (as defined herein) and/or Completion Fees (as defined herein). The occurrence and timing of milestone-related payments, such as upon the closing of a transaction, are generally not within our control. Accordingly, revenue and net income in any period may not be indicative of full year results or the results of any other period and may vary significantly from year to year and quarter to quarter.

Previous wording

Corporate expenses represent expenses that are not allocated to individual business segments such as those relating to our executive management, accounting, information technology, legal and compliance, marketing, human capital, including related compensation expense for corporate employees.

Current wording

Corporate expenses represent expenses that are not allocated to individual business segments such as those relating to our executive management, accounting, information technology, legal and compliance, marketing, and human capital groups, including related compensation expense for corporate employees.

Previous wording

Our fiscal year ends on March 31 of each year. For the fiscal year ended March 31, 2025, we earned revenues of $2.39 billion, an increase of 25% from the $1.91 billion earned during the fiscal year ended March 31, 2024.

Current wording

Our fiscal year ends on March 31 of each year. For the fiscal year ended March 31, 2026, we earned revenues of $2.62 billion, an increase of 10% from the $2.39 billion earned during the fiscal year ended March 31, 2025.

Previous wording

For the fiscal years ended March 31, 2025, 2024, and 2023, we earned revenues of $687 million, $570 million, and $520 million, respectively, from our international operations.

Current wording

For the fiscal years ended March 31, 2026, 2025, and 2024, we earned revenues of $842 million, $687 million, and $570 million, respectively, from our international operations.

Previous wording

Based on historical experience, we believe current economic conditions provide a relatively stable environment for M&A and capital markets activities, but the continued threat from sustained elevated interest rates or inflation, international conflict, and international trade policies provide some level of uncertainty in the coming quarters. In the United States, our dialogue with clients who are evaluating strategic alternatives remains measured as we continue to see concerns around the macro-economic factors mentioned above.

Current wording

Based on historical experience, we believe current economic conditions provide a relatively stable environment for M&A and capital markets activities, but the continued threat from elevated interest rates or inflation, international conflict, and international trade policies provide some level of uncertainty in the coming year. Our dialogue with clients who are evaluating strategic alternatives remains positive as they consider their options for liquidity even in the face of the uncertainty caused by the factors mentioned above.

Previous wording

Our Financial Restructuring activity has improved as a result of the factors mentioned above (elevated interest rates, global trade policy and conflict). We continue to remain optimistic about the current restructuring and liability management outlook over the short to medium term due to elevated interest rates, record levels of company leverage, recent geopolitical events, global trade policy disruption, and contracting monetary policy.

Current wording

Our Financial Restructuring activity also remains stable as a result of the factors mentioned above (elevated interest rates, global trade policy and conflict). We continue to see sustained levels of restructuring and liability management activity over the short to medium term due to elevated interest rates, record levels of company leverage, disruption in the software space, recent geopolitical events and global trade policy disruption.

Previous wording

Revenues include fee revenues and reimbursements of expenses (see Note 2 and Note 3 included in Part II, Item 8 of this Form 10-K). Revenues reflect revenues from our CF, FR, and FVA business segments that substantially consist of fees for advisory services.

Current wording

Revenues include fee revenues and reimbursements of expenses (see Note 2 and Note 3 included in Part II, Item 8 of this Form 10-K). Revenues are generated from our CF, FR, and FVA business segments and primarily consist of fees for advisory services.

Previous wording

FVA primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties. Also, our FVA business segment provides dispute resolution services to clients where fees are usually based on the hourly rates of our financial professionals. Unlike our CF or FR segments, the fees generated in our FVA segment are generally not contingent on the successful completion of a transaction.

Current wording

FVA primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties. Also, our FVA business segment provides dispute resolution services to clients, for which fees are usually based on the hourly rates of our financial professionals. The majority of our FVA revenues consists of Retainer Fees, Progress Fees and/or Completion Fees.

Previous wording

Our operating expenses are classified as employee compensation and benefits expense and non-compensation expense; revenue and headcount are the primary drivers of our operating expenses. Reimbursements of certain out-of-pocket deal expenses are recorded on a gross basis and are therefore included in both Revenues and Operating expenses on the Consolidated Statements of Comprehensive Income.

Current wording

Our operating expenses are classified as compensation expenses and non-compensation expenses; revenue and headcount are the primary drivers of our operating expenses. Reimbursements of certain out-of-pocket deal expenses are recorded on a gross basis and are therefore included in both Revenues and Operating expenses in the Consolidated Statements of Income.

Previous wording

Employee Compensation and Benefits Expense. Our employee compensation and benefits expense, which accounts for the majority of our operating expenses, is determined by management based on revenues earned, headcount, the competitiveness of the prevailing labor market, and anticipated compensation expectations of our employees. These factors may fluctuate, and as a result, our employee compensation and benefits expense may fluctuate materially in any particular period. Accordingly, the amount of employee compensation and benefits expense recognized in any particular period may not be consistent with prior periods or indicative of future periods.

Current wording

Compensation Expenses. Our compensation expenses are comprised of employee compensation and benefits and acquisition related compensation and benefits expenses. Compensation expenses account for the majority of our operating expenses, and are determined by management based on revenues earned, headcount, the competitiveness of the prevailing labor market, and anticipated compensation expectations of our employees. These factors may fluctuate, and as a result, our compensation expenses may fluctuate materially in any particular period. Accordingly, the amount of compensation expenses recognized in any particular period may not be consistent with prior periods or indicative of future periods. In connection with certain acquisitions, certain employees may be entitled to deferred consideration, primarily in the form of retention payments, should certain service and/or performance conditions be met in the future. As a result of these conditions, such deferred consideration would be expensed as compensation in current and future periods and has been accrued as liabilities on the Consolidated Balance Sheets as of March 31, 2026 and 2025.

Previous wording

Our employee compensation and benefits expense consists of base salary, payroll taxes, benefits, annual incentive compensation payable as cash bonus awards, deferred cash bonus awards, and the amortization of equity-based bonus awards. Base salary and benefits are paid ratably throughout the year. Annual equity-based bonus awards granted prior to December 31, 2024 include fixed share compensation awards and liability classified fixed dollar awards as a component of the annual bonus awards for certain employees. These equity awards are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which typically occurs in the first quarter of each fiscal year; accordingly, expenses are amortized over the stated vesting period. In most circumstances, the unvested portion of these awards is subject to forfeiture should the employee depart from the Company, and in certain cases if certain financial metrics are not met. Cash bonuses, which are accrued monthly, are discretionary and dependent upon a number of factors including the Company's performance and are generally paid in the first quarter of each fiscal year with respect to prior year performance. Generally, a portion of the cash bonus is deferred and paid in the third quarter of the fiscal year in which the bonus is awarded. We refer to the ratio of our employee compensation and benefits expenses to our revenues as our “Compensation Ratio.”

Current wording

Employee compensation and benefits consist of base salary, payroll taxes, benefits, annual incentive compensation payable as cash bonus awards, deferred cash bonus awards, and the amortization of equity-based bonus awards. Base salary and benefits are paid ratably throughout the year. Equity awards are generally subject to annual vesting requirements over a four-year period beginning at the date of grant, which typically occurs in the first quarter of each fiscal year; accordingly, expenses are amortized over the stated vesting period. In most circumstances, the unvested portion of these awards is subject to forfeiture should the employee depart from the Company, and in certain cases if certain financial metrics are not met. Certain annual equity-based bonus awards granted prior to December 31, 2024 include fixed share compensation awards and liability classified fixed dollar awards as a component of the annual bonus awards for certain employees. Cash bonuses, which are accrued monthly, are discretionary and dependent upon a number of factors including the Company's performance, and are generally paid in the first quarter of each fiscal year with respect to prior year performance. Generally, a portion of the cash bonus is deferred and paid in the third quarter of the fiscal year in which the bonus is awarded.

Previous wording

Non-Compensation Expense. The balance of our operating expenses includes costs for travel, meals and entertainment, rent, depreciation and amortization, information technology and communications, professional fees, and other operating expenses. We refer to all of these expenses as non-compensation expenses. A portion of our non-compensation expenses fluctuates in response to changes in headcount.

Current wording

Non-Compensation Expenses. The balance of our operating expenses includes costs for travel, meals and entertainment, rent, depreciation and amortization, information technology and communications, professional fees, other operating expenses, and gains and/or losses associated with changes in the fair value of earnout liabilities. We refer to all of these expenses as non-compensation expenses. A portion of our non-compensation expenses fluctuates in response to changes in headcount.

Previous wording

Other income, net includes (i) interest income earned on non-marketable and investment securities, cash and cash equivalents, loans receivable from affiliates, employee loans, and commercial paper, (ii) interest expense and fees on our HLI Line of Credit (defined herein), (iii) equity income and/or gains or losses from funds and partnership interests where we have had more than a minor ownership interest or more than minor influence over operations, but do not have a controlling interest and are not the primary beneficiary, (iv) gains and/or losses associated with the reduction/increase of earnout liabilities, and (v) other miscellaneous non-operating expenses.

Current wording

Other (income) expense, net primarily includes interest income and gains earned on non-marketable and investment securities, cash and cash equivalents, loans receivable from affiliates, employee loans, and commercial paper.

Previous wording

Revenues were $2.39 billion for the year ended March 31, 2025, compared with $1.91 billion for the year ended March 31, 2024, representing an increase of 25%. The increase in revenues was primarily the result of an increase in CF revenues for the year ended March 31, 2025, compared with the year ended March 31, 2024, as described in further detail below. For the year ended March 31, 2025, CF revenues increased 38%, FR revenues increased 4%, and FVA revenues increased 11% when compared with the year ended March 31, 2024.

Current wording

Revenues were $2.62 billion for the year ended March 31, 2026, compared with $2.39 billion for the year ended March 31, 2025, representing an increase of 10%. The increase in revenues was primarily the result of an increase in CF revenues, as described in further detail below.

Previous wording

Operating expenses were $1.89 billion for the year ended March 31, 2025, compared with $1.55 billion for the year ended March 31, 2024, an increase of 22%. Employee compensation and benefits expense, as a component of operating expenses, was $1.52 billion for the year ended March 31, 2025, compared with $1.21 billion for the year ended March 31, 2024, an increase of 26%. The increase in employee compensation and benefits expense was primarily due to the increase in revenues for the fiscal year. The Compensation Ratio was 64% and 63% for the years ended March 31, 2025 and 2024, respectively. Non-compensation expenses, as a component of operating expenses, were $363.6 million for the year ended March 31, 2025, compared with $338.0 million for the year ended March 31, 2024, an increase of 8%. The increase in non-compensation expenses was primarily a result of an increase in depreciation and amortization, other operating expenses, and information technology and communications expenses, partially offset by a decrease in professional fees.

Current wording

Operating expenses were $2.09 billion for the year ended March 31, 2026, compared with $1.89 billion for the year ended March 31, 2025, an increase of 11%. Compensation expenses, as a component of operating expenses, was $1.68 billion for the year ended March 31, 2026, compared with $1.52 billion for the year ended March 31, 2025, an increase of 10%. The increase was primarily due to the increase in revenues for the fiscal year. The Compensation Ratio was 64% for both the years ended March 31, 2026 and 2025, respectively. Non-compensation expenses, as a component of operating expenses, were $407.1 million for the year ended March 31, 2026, compared with $362.6 million for the year ended March 31, 2025, an increase of 12%. The increase in non-compensation expenses was primarily a result of increases in revaluation of acquisition contingent consideration, travel, meals and entertainment, and information technology and communications expenses.

Previous wording

The provision for income taxes for the year ended March 31, 2025 was $131.6 million, which reflected an effective tax rate of 25%. The provision for income taxes for the year ended March 31, 2024 was $110.2 million, which reflected an effective tax rate of 28%. The decrease in the Company’s tax rate during the year ended March 31, 2025 relative to the year ended March 31, 2024 was primarily a result of the release of the provision for an uncertain tax position as a result of the successful closure of a city audit.

Current wording

The provision for income taxes for the year ended March 31, 2026 was $138.1 million, which reflected an effective tax rate of 25%. The provision for income taxes for the year ended March 31, 2025 was $131.6 million, which reflected an effective tax rate of 25%.

Previous wording

The following table presents revenues, expenses, and contributions from our continuing operations by business segment. The revenues by segment represents each segment's revenues, and the profit by segment represents profit for each segment before corporate expenses, other income, net, and income taxes.

Current wording

The following table presents revenues, expenses and profit from our business segments. The revenues by segment represent each segment’s revenues, and the profit by segment represents profit for each segment before corporate expenses, other (income) expense, net, and income taxes.

Previous wording

(3)Fee Events applicable to FVA only; a Fee Event includes any engagement that involves revenue activity during the measurement period with a revenue minimum of one thousand dollars. References to closed transactions should be understood to be the same as transactions that are “effectively closed” as described in Note 2 of our Consolidated Financial Statements.

Current wording

(4)Fee Events applicable to FVA only; a Fee Event includes any engagement that involves revenue activity during the measurement period with a revenue minimum of $1,000. References to closed transactions should be understood to be the same as transactions that are “effectively closed” as described in Note 2 of our Consolidated Financial Statements.

Previous wording

Revenues for CF were $1.53 billion for the year ended March 31, 2025, compared with $1.11 billion for the year ended March 31, 2024, representing an increase of 38%. The increase in revenues was primarily due to a 25% increase in the number of closed transactions for the year ended March 31, 2025, compared with the year ended March 31, 2024, which was driven by favorable market conditions.

Current wording

Revenues for CF were $1.74 billion for the year ended March 31, 2026, compared with $1.53 billion for the year ended March 31, 2025, representing an increase of 14%. The increase in revenues was primarily due to an increase in the number of closed transactions during the period, which was driven by favorable market conditions.

Previous wording

Segment profit for CF was $474 million for the year ended March 31, 2025, compared with $303 million for the year ended March 31, 2024, representing an increase of 57%. The increase in segment profit was primarily a result of higher revenues for the year ended March 31, 2025, compared with the year ended March 31, 2024.

Current wording

Segment profit for CF was $581 million for the year ended March 31, 2026, compared with $474 million for the year ended March 31, 2025, representing an increase of 23%. The increase in segment profit was primarily a result of higher revenues when compared to the same period last year.

Previous wording

Revenues for FR were $544 million for the year ended March 31, 2025, compared with $522 million for the year ended March 31, 2024, representing an increase of 4%. The increase in revenues was primarily due to a 15% increase in the number of closed transactions for the year ended March 31, 2025, compared with the year ended March 31, 2024, which was driven by favorable market conditions.

Current wording

Revenues for FR were $529 million for the year ended March 31, 2026, compared with $544 million for the year ended March 31, 2025, representing a decrease of (3)%. The decrease in revenues was primarily due to a decrease in the number of closed transactions, which was driven by less favorable market conditions for restructuring.

Previous wording

Segment profit for FR was $209 million for the year ended March 31, 2025, compared with $194 million for the year ended March 31, 2024, an increase of 8%. The increase in segment profit was primarily a result of higher revenues for the year ended March 31, 2025, compared with the year ended March 31, 2024.

Current wording

Segment profit for FR was $179 million for the year ended March 31, 2026, compared with $209 million for the year ended March 31, 2025, a decrease of (14)%. The decrease in segment profit was primarily a result of lower revenues and higher compensation expenses as a percentage of revenue when compared to the same period last year.

Previous wording

Revenues for FVA were $318 million for the year ended March 31, 2025, compared with $286 million for the year ended March 31, 2024, an increase of 11%. The increase in revenues was primarily due to an increase in the number of Fee Events for the year ended March 31, 2025, compared with the year ended March 31, 2024, driven by improvements in the M&A markets, which affected one or more of the service lines within our FVA business.

Current wording

Revenues for FVA were $344 million for the year ended March 31, 2026, compared with $318 million for the year ended March 31, 2025, an increase of 8%. The increase in revenues was primarily due to an increase in the average fee per Fee Event, driven by improvements in the M&A markets.

Previous wording

Segment profit for FVA was $89 million for the year ended March 31, 2025, compared with $74 million for the year ended March 31, 2024, representing an increase of 19%. The increase in segment profit was primarily a result of higher revenues and lower non-compensation expenses for the year ended March 31, 2025, compared with the year ended March 31, 2024.

Current wording

Segment profit for FVA was $94 million for the year ended March 31, 2026, compared with $89 million for the year ended March 31, 2025, representing an increase of 6%. The increase in segment profit was primarily a result of higher revenues.

Previous wording

Corporate expenses were $271 million for the year ended March 31, 2025, compared with $208 million for the year ended March 31, 2024, representing an increase of 30%. The increase in corporate expenses was primarily a result of higher compensation expenses for the year ended March 31, 2025, compared with the year ended March 31, 2024.

Current wording

Corporate expenses were $327 million for the year ended March 31, 2026, compared with $270 million for the year ended March 31, 2025, representing an increase of 21%. The increase in corporate expenses was driven primarily by increased compensation expense and increased revaluation of acquisition contingent consideration when compared to the same period last year.

Previous wording

Our current assets comprise cash and cash equivalents, investment securities, accounts receivable, and unbilled work in progress related to fees earned from providing advisory services. Our current liabilities include deferred income, accounts payable and accrued expenses, accrued salaries and bonuses, income taxes payable, and current portion of other liabilities.

Current wording

Our current assets are primarily comprised of cash and cash equivalents, investment securities, accounts receivable, and unbilled work in progress related to fees earned from providing advisory services. Our current liabilities are primarily comprised of accrued salaries and bonuses and accounts payable and accrued expenses.

Previous wording

Our cash and cash equivalents include cash held at banks. We maintain moderate levels of cash on hand in support of regulatory requirements for our registered broker-dealers. As of March 31, 2025 and 2024, we had $686 million and $545 million of cash in foreign subsidiaries, respectively. Our excess cash may be invested in short-term investments, including treasury securities, commercial paper, certificates of deposit, and investment grade corporate debt securities. Please refer to Note 6 for further detail.

Current wording

Our cash and cash equivalents include cash held at banks. We maintain moderate levels of cash on hand in support of regulatory requirements for our registered broker-dealer. As of March 31, 2026 and 2025, we had $860 million and $686 million of cash and cash equivalents in foreign subsidiaries, respectively. Our excess cash may be invested in short-term investments, including treasury securities, commercial paper, certificates of deposit, and investment grade corporate debt securities. Please refer to Note 6 for further detail.

Previous wording

As of March 31, 2025 and 2024, our cash and cash equivalents, investment securities, and restricted cash were as follows:

Current wording

As of March 31, 2026 and 2025, our cash and cash equivalents and investment securities were as follows:

Previous wording

As of each fiscal year end, a material portion of our cash and cash equivalents is reserved to cover accrued, but unpaid bonuses, that are paid the following May and November.

Current wording

As of each fiscal year end, a material portion of our cash and cash equivalents is reserved to cover accrued bonuses that are paid the following May and November.

Previous wording

Our liquidity is highly dependent upon cash receipts from clients that are generally dependent upon the successful completion of transactions as well as the timing of receivables collections, which typically occur within 60 days of billing. As of March 31, 2025 and 2024, we had $257 million and $200 million of Accounts receivable, net of credit losses, respectively. As of March 31, 2025 and 2024, we had $158 million and $192 million of Unbilled work in progress, net of credit losses, respectively.

Current wording

Our liquidity is highly dependent upon cash receipts from clients that are generally dependent upon the successful completion of transactions as well as the timing of receivables collections, which typically occur within 60 days of billing. As of March 31, 2026, accounts receivable, net of allowance for credit losses was $228 million. As of March 31, 2026, Unbilled work in progress, net of allowance for credit losses was $271 million.

Previous wording

Subsequent to the end of fiscal 2025, our board of directors declared a quarterly cash dividend of $0.60 per share of common stock, payable on June 15, 2025 to shareholders of record as of the close of business on June 2, 2025.

Current wording

Subsequent to the end of fiscal 2026, our board of directors declared a quarterly cash dividend of $0.70 per share of common stock, payable on June 15, 2026 to shareholders of record as of the close of business on June 1, 2026.

Previous wording

On August 23, 2019, the Company entered into a syndicated revolving line of credit with the Bank of America, N.A. and certain other financial institutions party thereto, which was amended by a First Amendment to Credit Agreement dated as of August 2, 2022 (the “HLI Line of Credit”), which allows for borrowings of up to $100 million (and, subject to certain conditions, provides the Company with an uncommitted expansion option, which, if exercised in full, would provide for a total credit facility of $200 million), and matures on August 23, 2025 (or if such date is not a business day, the immediately preceding business day). Borrowings under the HLI Line of Credit bear interest at a floating rate, which can be either, at the Company’s option, (i) Term Secured Overnight Financing Rate (“SOFR”) plus a 0.10% SOFR adjustment plus a 1.00% margin or (ii) base rate, which is the highest of (a) the Federal Funds Rate plus one-half of one percent (0.50%), (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) Term SOFR plus a 0.10% SOFR adjustment. Commitment fees apply to unused amounts. The HLI Line of Credit contains debt covenants which require that the Company maintain certain financial ratios, including but not limited to the maintenance of minimum consolidated earnings before interest, taxes, depreciation and amortization of no less than $150 million as of the end of any quarterly 12-month period and certain leverage ratios including a consolidated leverage ratio of less than 2.00 to 1.00. As of March 31, 2025, we were, and expect to continue to be, in compliance with such covenants. As of March 31, 2025, no principal was outstanding under the HLI Line of Credit.

Current wording

On August 23, 2019, the Company entered into a syndicated revolving line of credit with Bank of America, N.A. and certain other financial institutions party thereto, which was amended by the First Amendment to Credit Agreement dated as of August 2, 2022, and further amended by the Second Amendment to Credit Agreement on August 19, 2025 (as amended, the "HLI Line of Credit"). The HLI Line of Credit allows for borrowings of up to $150 million (and, subject to certain conditions, provides the Company with an uncommitted expansion option, which, if exercised in full, would provide for a total credit facility of $200 million) and matures on August 19, 2030 (or if such date is not a business day, the immediately preceding business day). Borrowings under the HLI Line of Credit bear interest at a floating rate, which can be either, at the Company's option, (i) a term Secured Overnight Financing Rate ("SOFR") plus a 0.95% margin per annum or (ii) a base rate, which is the highest of (a) the Federal Funds Rate plus one-half of one percent (0.50%), (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) a term SOFR rate plus a 1.00% margin. Commitment fees apply to unused amounts. The HLI Line of Credit contains certain financial covenants and other restrictions, including a financial loan covenant to maintain a consolidated leverage ratio of less than 2.00 to 1.00. As of March 31, 2026, we were, and expect to continue to be, in compliance with such covenants. As of March 31, 2026, no principal was outstanding under the HLI Line of Credit.

Previous wording

The majority of the Company's payment obligations and commitments pertain to routine operating leases. The Company also has various obligations relating to notes payable and contingent consideration issued in connection with businesses previously acquired (see Note 10 included in Part II, Item 8 of this Form 10-K).

Current wording

The majority of the Company's payment obligations and commitments pertain to routine operating leases. The Company also has various obligations, including notes payable and contingent consideration issued in connection with businesses previously acquired (see Note 10 included in Part II, Item 8 of this Form 10-K).

Previous wording

Operating activities resulted in a net cash inflow of $328.5 million for the year ended March 31, 2024, primarily due to net income of $280.3 million and non-cash charges of $244.5 million, partially offset by a decrease in other operating activities of $(196.4) million. Investing activities resulted in a net outflow of $(70.4) million for the year ended March 31, 2024, primarily due to acquisitions of property and equipment and purchases of investment securities, partially offset by the sale or maturity of investment securities. Financing activities resulted in a net outflow of $(250.6) million primarily due to dividends paid, payments to settle employee tax obligations on share-based awards, and share repurchases made during the year ended March 31, 2024.

Current wording

Operating activities resulted in a net cash inflow of $704.1 million, primarily due to net income reflecting the strong business performance. Investing activities resulted in a net inflow of $2.2 million, primarily attributable to sales or maturities of investment securities, largely offset by purchases of investment securities and capital expenditures. Financing activities resulted in a net outflow of $(492.9) million, primarily attributable to share repurchases, dividends paid, and payments made to settle employee tax obligations on share-based awards.

Previous wording

Operating activities resulted in a net cash inflow of $848.6 million for the year ended March 31, 2025, primarily due to net income of $399.7 million, non-cash charges of $252.8 million, and other operating activities of $196.1 million. Investing activities resulted in a net outflow of $(265.1) million for the year ended March 31, 2025, primarily due to purchases of investment securities and cash consideration transferred in connection with business acquisitions. Financing activities resulted in a net outflow of $(329.1) million primarily due to dividends paid, payments to settle employee tax obligations on share-based awards, and share repurchases made during the year ended March 31, 2025.

Current wording

Operating activities resulted in a net cash inflow of $848.6 million, primarily attributable to net income, non-cash charges, and changes in our operating assets and liabilities. Investing activities resulted in a net outflow of $(265.1) million, primarily attributable to purchases of investment securities and cash consideration transferred in connection with business acquisitions. Financing activities resulted in a net outflow of $(329.1) million, primarily attributable to dividends paid, payments to settle employee tax obligations on share-based awards, and share repurchases.

Previous wording

FVA primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties. Also, our FVA business segment provides dispute resolution services to clients where fees are usually based on the hourly rates of our financial professionals. Unlike our CF or FR segments, the fees generated in our FVA segment are generally not contingent on the successful completion of a transaction.

Current wording

FVA primarily provides financial advisory and valuation services with respect to companies, debt and equity interests (including complex illiquid investments), and other types of assets and liabilities; fairness opinions in connection with mergers and acquisitions and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions in connection with other transactions; as well as diligence, tax, transaction accounting, and other financial advisory services to companies, boards of directors, special committees, retained counsel, financial and strategic investors, trustees, and other parties. Also, our FVA business segment provides dispute resolution services to clients, for which fees are usually based on the hourly rates of our financial professionals. The majority of our FVA revenues consists of Retainer Fees, Progress Fees and/or Completion Fees.