HOULIHAN LOKEY, INC.

Previous wording

The following is a discussion of our results of operations for the three months ended June 30, 2026 and 2025.

Current wording

The following is a discussion of our results of operations for the three and six months ended September 30, 2026 and 2025.

Previous wording

Revenues were $511 million for the three months ended June 30, 2026, compared with $605 million for the three months ended June 30, 2025, representing a decrease of (16)%. The decrease in revenues was primarily driven by lower revenues from our CF segment, as described in further detail below.

Current wording

Revenues were $692 million for the three months ended September 30, 2026, compared with $660 million for the three months ended September 30, 2025, representing an increase of 5%. The increase in revenues was primarily driven by higher revenues from our CF segment, as described in further detail below.

Previous wording

Compensation expenses were $328 million for the three months ended June 30, 2026, compared with $393 million for the three months ended June 30, 2025, representing a decrease of (16)%. The decrease was primarily a result of a decrease in revenues for the quarter when compared with the same quarter last year. The Compensation Ratio was 64.3% for the three months ended June 30, 2026, compared with 64.9% for the three months ended June 30, 2025.

Current wording

Compensation expenses were $441 million for the three months ended September 30, 2026, compared with $423 million for the three months ended September 30, 2025, representing an increase of 4%. The increase in compensation expenses was primarily a result of an increase in revenues for the quarter when compared with the same quarter last year. The Compensation Ratio was 63.7% for the three months ended September 30, 2026, compared with 64.2% for the three months ended September 30, 2025.

Previous wording

The provision for income taxes for the three months ended June 30, 2026 was $8 million, which reflected an effective tax rate of 10%. The provision for income taxes for the three months ended June 30, 2025 was $0 million, which reflected an effective tax rate of 1%. The increase in the Company’s effective tax rate was primarily a result of decreased stock-based compensation deductions.

Current wording

The provision for income taxes for the six months ended September 30, 2026 was $57 million, which reflected an effective tax rate of 23%. The provision for income taxes for the six months ended September 30, 2025 was $49 million, which reflected an effective tax rate of 19%. The increase in the Company's tax rate was primarily a result of decreased stock-based compensation deductions.

Previous 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.

Current wording

The following table presents revenues 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

(2)Corporate expenses include costs not allocated to individual segments, including certain acquisition related charges and share-based payments to corporate employees, as well as expenses of senior management and corporate departmental functions managed on a worldwide basis, including office of the executives, accounting, human capital, marketing, information technology, and legal and compliance.

Current wording

(2)Corporate expenses include costs not allocated to individual segments, including certain acquisition related charges and share-based payments to corporate employees, as well as expenses of senior management and corporate departmental functions managed on a worldwide basis, including office of the executives, accounting, human capital, marketing, data strategy group, information technology, and legal and compliance.

Previous wording

Revenues for CF were $303 million for the three months ended June 30, 2026, compared with $398 million for the three months ended June 30, 2025, representing a decrease of (24)%. Revenues decreased due to a decrease in the average transaction fee on closed transactions, which was driven by transaction mix and we believe does not represent a short-term trend in the average fee on closed transactions.

Current wording

Revenues for CF were $481 million for the three months ended September 30, 2026, compared with $439 million for the three months ended September 30, 2025, representing an increase of 10%. Revenues increased due to an increase in the average transaction fee on closed transactions, which was driven by transaction mix and improved market conditions for M&A and capital markets transactions. This increase was partially offset by a decline in the number of closed transactions, which we believe does not represent a trend.

Previous wording

Segment profit for CF was $89 million for the three months ended June 30, 2026, compared with $127 million for the three months ended June 30, 2025, a decrease of (30)%. Profitability decreased primarily as a result of a decrease in revenues when compared to the same quarter last year.

Current wording

Segment profit for CF was $259 million for the six months ended September 30, 2026, compared with $274 million for the six months ended September 30, 2025, a decrease of (5)%. Profitability decreased primarily as a result of a decrease in revenues when compared to the same period last year.

Previous wording

Revenues for FR were $119 million for the three months ended June 30, 2026, compared with $128 million for the three months ended June 30, 2025, representing a decrease of (8)%. Revenues decreased primarily due to a decrease in the number of closed transactions. This was partially offset by an increase in the average transaction fee on closed transactions. The reduction in transaction volume was driven by timing of transaction closings, while the higher average transaction fee on closed transactions resulted from transaction mix and we believe does not represent a trend.

Current wording

Revenues for FR were $118 million for the three months ended September 30, 2026, compared with $134 million for the three months ended September 30, 2025, representing a decrease of (12)%. Revenues decreased primarily due to a decrease in the number of closed transactions, driven by timing of transaction closings. This was partially offset by an increase in the average transaction fee on closed transactions, driven by transaction mix, which we believe does not represent a trend.

Previous wording

Segment profit for FR was $42 million for the three months ended June 30, 2026, compared with $43 million for the three months ended June 30, 2025, a decrease of (4)%. Profitability decreased primarily as a result of a decrease in revenues when compared to the same quarter last year.

Current wording

Segment profit for FR was $82 million for the six months ended September 30, 2026, compared with $93 million for the six months ended September 30, 2025, a decrease of (12)%. Profitability decreased primarily as a result of a decrease in revenues when compared to the same period last year.

Previous wording

Segment profit for FVA was $23 million for the three months ended June 30, 2026, compared with $18 million for the three months ended June 30, 2025, an increase of 34%. Profitability increased primarily as a result of an increase in revenues when compared to the same quarter last year.

Current wording

Segment profit for FVA was $52 million for the six months ended September 30, 2026, compared with $43 million for the six months ended September 30, 2025, an increase of 21%. Profitability increased primarily as a result of an increase in revenues and lower compensation expenses as a percentage of revenues when compared to the same period last year.

Previous wording

Corporate expenses were $76 million for the three months ended June 30, 2026, compared with $98 million for the three months ended June 30, 2025, a decrease of (22)%. Corporate expenses decreased primarily as a result of a decrease in revaluation of acquisition contingent consideration and a decrease in depreciation and amortization when compared with the same quarter last year.

Current wording

Corporate expenses were $161 million for the six months ended September 30, 2026, compared with $169 million for the six months ended September 30, 2025, a decrease of (5)%. Corporate expenses decreased primarily as a result of a decrease in revaluation of acquisition contingent consideration and a decrease in depreciation and amortization, partially offset by an increase in other operating expenses, when compared with the same period last year.

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-dealer. As of June 30, 2026 and March 31, 2026, we had $546 million and $860 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.

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 September 30, 2026 and March 31, 2026, we had $622 million and $860 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

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 June 30, 2026, Accounts receivable, net of allowance for credit losses was $224 million. As of June 30, 2026, Unbilled work in progress, net of allowance for credit losses was $255 million.

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 September 30, 2026, Accounts receivable, net of allowance for credit losses was $285 million. As of September 30, 2026, Unbilled work in progress, net of allowance for credit losses was $267 million.

Previous wording

Operating activities resulted in a net outflow of $(132) million, primarily attributable to cash bonus payments in May 2025. Investing activities resulted in a net inflow of $110 million, primarily attributable to sales or maturities of investment securities. Financing activities resulted in a net outflow of $(197) million, primarily attributable to payments made to settle employee tax obligations on share-based awards and dividends paid.

Current wording

Operating activities resulted in a net outflow of $(84) million, primarily attributable to cash bonus payments in May 2026, partially offset by net income. Investing activities resulted in a net inflow of $51 million, primarily attributable to sales or maturities of investment securities, partially offset by cash consideration transferred in connection with business acquisitions and cash paid for capital expenditures. Financing activities resulted in a net outflow of $(314) million, primarily attributable to dividends paid, payments made to settle employee tax obligations on share-based awards, and share repurchases.

Previous wording

Operating activities resulted in a net outflow of $(336) million, primarily attributable to cash bonus payments in May 2026. Investing activities resulted in a net inflow of $112 million, primarily attributable to sales or maturities of investment securities. Financing activities resulted in a net outflow of $(217) million, primarily attributable to payments made to settle employee tax obligations on share-based awards, dividends paid, and share repurchases.

Current wording

Operating activities resulted in a net inflow of $193 million, primarily attributable to net income, partially offset by cash bonus payments in May 2025. Investing activities resulted in a net outflow of $(5) million, primarily attributable to purchases of investment securities and cash paid for capital expenditures, partially offset by sales or maturities of investment securities. Financing activities resulted in a net outflow of $(269) million, primarily attributable to payments made to settle employee tax obligations on share-based awards, dividends paid, and share repurchases.

Previous wording

During the three months ended June 30, 2026, there were no significant changes to our critical accounting policies and estimates. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Part II, Item 7 of our 2026 Annual Report, for a more complete discussion of our critical accounting policies and estimates.

Current wording

During the six months ended September 30, 2026, there were no significant changes to our critical accounting policies and estimates. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in Part II, Item 7 of our 2026 Annual Report, for a more complete discussion of our critical accounting policies and estimates.