stockrowWhat it does
Houlihan Lokey is an independent investment bank headquartered in Los Angeles. Founded in 1972, it helps organizations make financial decisions and carry out transactions. Scott J. Adelson is its chief executive officer.
The company advises businesses that want to sell themselves, buy another business or raise capital. It also works with companies and their creditors when debts need to be reorganized, including in bankruptcy. Another practice values businesses and assets, provides financial opinions on transactions and advises on related accounting, tax and diligence questions.
Clients include public and private companies, private equity firms and other financial sponsors, government agencies, boards of directors, creditors and investors. For a business owner considering a sale, Houlihan Lokey can advise on the transaction and help connect potential buyers and sellers. For a financially distressed company or its creditors, it can advise on negotiations over debt or on a restructuring process.
The company organizes its work into Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory. Its industry groups and financial sponsor specialists work with those practices across assignments. Houlihan Lokey operates through subsidiaries and has offices globally.
It focuses on advice rather than lending, securities sales and trading, or investment research. It does not engage in those activities, which can create conflicts with advisory clients’ interests.
How it makes money
Houlihan Lokey primarily earns advisory fees under individually negotiated engagement letters. Depending on the assignment, a client may pay a retainer when it hires the firm, progress fees during the work, or a completion fee when a transaction or engagement succeeds. The timing of milestone payments, including transaction closings, is generally outside the company’s control.
Corporate Finance advises on sales and purchases of businesses and on raising debt or equity. Most of its revenue comes from completion fees. If a deal does not close, the firm generally receives only any retainer and progress fees already earned. In fiscal 2026, Corporate Finance represented 66.7% of company revenue.
Financial Restructuring advises debtors, creditors and other parties on reorganizing obligations, including through bankruptcy and out-of-court arrangements. Most of its revenue also comes from completion fees. Its services extend to liability management, distressed mergers and acquisitions, and financing for companies in bankruptcy.
Financial and Valuation Advisory provides valuations, transaction opinions, diligence, tax and other financial advice. Most of its revenue consists of retainer, progress or completion fees; fees for dispute resolution are usually based on professionals’ hourly rates. The company also records reimbursements for certain deal expenses as revenue.
In the second quarter of fiscal 2027, Corporate Finance had higher average fees on closed transactions. Financial and Valuation Advisory’s growth was primarily driven by portfolio valuation.
| Segment | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| Corporate Finance | $1.7 billion | 66.7% | 14.3% |
| Financial Restructuring | $528.7 million | 20.2% | −2.91% |
| Financial and Valuation Advisory | $344.2 million | 13.2% | 8.19% |
Customers and how it sells
Houlihan Lokey serves corporations, financial sponsors and government agencies, as well as boards, investors and other parties to transactions. Its restructuring clients can include debt issuers, bondholders, banks, creditors’ committees, equity holders and potential acquirers. Its valuation practice also works with retained counsel, trustees and special committees.
The firm has financial professionals and offices globally. Clients range from closely held companies to large global corporations. A majority of Corporate Finance engagements relate to mid-cap transactions.
The United States accounted for 67.8% of fiscal 2026 revenue, and international operations accounted for 32.2%. The company conducts regulated advisory business in locations including the United Kingdom, Germany, Dubai, Australia, Hong Kong and India.
The company’s business practices, industry groups and Financial Sponsors group market services together. Its professionals also maintain relationships with law, consulting and accounting firms and other industry participants, both as potential sources of referrals and as clients.
| Region | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| United States | $1.8 billion | 67.8% | 4.30% |
| International | $842.2 million | 32.2% | 22.5% |
Suppliers and costs
Houlihan Lokey’s principal operating resource is its financial professionals. It recruits junior professionals from undergraduate and graduate programs and also hires experienced professionals for its businesses. It invests in training and mentoring and uses deferred cash and stock awards as part of compensation.
Compensation and benefits are the majority of operating expenses. Management determines compensation expense using factors including revenue, headcount, labor-market conditions and employees’ compensation expectations. Managing directors are assessed on profitable revenue, advice and execution, and collaboration rather than being paid under a commission-based model.
Some acquisitions also create deferred consideration that is expensed as compensation when payments depend on employees meeting service or performance conditions.
Other operating costs include travel, meals and entertainment, rent, technology and communications, professional fees, and depreciation and amortization. Certain out-of-pocket deal costs are recorded in both revenue and operating expenses when reimbursed by clients.
- Revenue$2.6B
- Cost of revenue−$1.7B
- Other operating costs−$408.3M
- Operating income$527.0M
Competitive position
Houlihan Lokey competes with investment banks and financial advisory firms globally and regionally. In Corporate Finance, competitors include industry- or geography-focused boutiques, other independent investment banks and large full-service banks. No competing companies are named.
The company competes on industry knowledge, transaction execution, client relationships, reputation and price. Some rivals can offer financing or market-making services that help bring transactions about; Houlihan Lokey does not provide lending or securities sales and trading.
The company says its sector expertise, senior banker involvement, financial sponsor relationships and global platform provide an advantage in mid-cap transactions. Its practices also draw on one another: restructuring teams can call on industry, capital solutions and financial sponsor specialists. Relationships with professional services firms can provide referrals as well as direct client work.
Our reading: Sector knowledge and senior involvement can support a competitive position in complex assignments, but other advisers also compete on knowledge and execution. Our reading: Client and referral relationships can help the firm win work, although the evidence does not establish how difficult those relationships are for rivals to replicate. Our reading: Its advisory-only model limits some potential conflicts, but the lack of financing and market-making services can also put it at a disadvantage.
Growth opportunities
Houlihan Lokey plans to expand across industry sectors, geographies and products through internal growth and acquisitions. It also develops industry capabilities through internal promotions and external hiring. The company continues to build its presence outside the United States, while seeking opportunities domestically.
Fiscal 2026 Corporate Finance revenue was $1.7 billion, compared with $1.5 billion in fiscal 2025. The increase reflected more closed transactions, driven by favorable market conditions. Financial and Valuation Advisory revenue was $344.2 million in fiscal 2026, compared with $318.2 million in fiscal 2025; the company attributed the increase primarily to a higher average fee per fee event.
In the second quarter of fiscal 2027, the company added managing directors, including some from its acquisition of energy-focused investment bank Intrepid Financial Partners, which closed in September. The company expects acquisitions and internal growth to expand its talent base.
Houlihan Lokey expects software-sector restructuring engagements it has won to begin contributing revenue in calendar 2027. It also expects elevated restructuring revenue through fiscal 2028 based on backlog and recent new deal activity. The company reported growth in portfolio valuation as the primary driver of Financial and Valuation Advisory’s second-quarter growth.
- $2.3BFY2022
- $1.8BFY2023
- $1.9BFY2024
- $2.4BFY2025
- $2.6BFY2026
Structural risks
- Deal conditions and timing: Changing market conditions can reduce the volume or size of transactions and materially reduce revenue. Completion payments are generally outside the company’s control, and deals that fail to close can leave it with only retainer or progress fees.
- Competition: Other financial advisory firms can offer a wider range of products and services. Competition can cause lost engagements and pricing pressure, affecting revenue and profitability.
- People and compensation: Effective competition depends on attracting and retaining employees. Compensation expense can fluctuate with revenue, headcount and labor-market conditions, while acquisition-related retention payments can add compensation costs.
- International operations: Foreign operations involve risks including currency fluctuations, longer transaction cycles, difficulty collecting fees, higher operating costs and changes in regulatory requirements.
- Regulation: The company faces extensive financial-services regulation. Broker-dealer rules include minimum net capital requirements, while failures to comply with client-information privacy rules can expose the company to liability or reputational damage.
- Shareholder control: The dual-class structure and HL Voting Trust concentrate voting control, limiting Class A shareholders’ ability to influence corporate matters. The company relies on certain exemptions available to controlled companies.
Leadership
The HL Voting Trust controlled a majority of the company’s voting power as of March 31, 2026. Houlihan Lokey is a controlled company and uses certain exemptions from stock-exchange corporate governance requirements.
| Name | Role | Since | Total pay, FY2026 |
|---|---|---|---|
| Scott J. Adelson | — | $13.0 million | |
| J. Lindsey Alley | — | $4.3 million | |
| Scott L. Beiser | — | $3.0 million | |
| Christopher M. Crain | — | $3.3 million | |
| P. Eric Siegert | — | $17.5 million |
Bottom line
Our reading
Our reading: Houlihan Lokey is an advisory business built around its professionals, relationships and transaction expertise, with compensation its principal operating cost. Our reading: Its exposure to completed deals makes revenue sensitive to market conditions and timing, although restructuring and valuation give it sources of work beyond conventional mergers and acquisitions. Voting control remains concentrated in the HL Voting Trust.