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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our historical financial statements and related notes included elsewhere in this Form 10-K. Actual results and the timing of events may differ significantly from those expressed or implied in any forward-looking statements due to a number of factors, including those set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” and elsewhere in this Form 10-K. For discussion related to changes in financial condition and the results of operations for fiscal year 2024-related items, refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for fiscal year 2025, which was filed with the Securities and Exchange Commission on May 15, 2025.

Executive Overview

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.

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.

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.

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.

Business Environment and Outlook

Economic and global financial conditions can materially affect our operational and financial performance. See the section entitled “Risk Factors” for a discussion of some of the factors that can affect our performance.

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.

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.

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.

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.

Key Financial Measures

Revenues

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.

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Revenues for all three business segments are recognized upon satisfaction of the performance obligation and may be satisfied over time or at a point in time. The amount and timing of the fees paid vary by the type of engagement. In general, advisory fees are paid at the time an engagement letter is signed (“Retainer Fees”), during the course of the engagement (“Progress Fees”), or upon the successful completion of a transaction or engagement (“Completion Fees”).

CF provides general financial advisory services and advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions, including financial sponsors, on a wide variety of matters, including buy-side and sell-side M&A transactions, debt and equity financings in both the private and public markets, and other corporate finance transactions. The majority of our CF revenues consists of Completion Fees. A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to Retainer Fees and in some cases Progress Fees that may have been received.

FR provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; liability management transactions; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The majority of our FR revenues consists of Completion Fees. Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the Retainer Fees and/or Progress Fees.

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.

Operating Expenses

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.

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.

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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.

We refer to the ratio of our compensation expenses to our revenues as our “Compensation Ratio.”

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.

Other (Income) Expense, Net

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.

Results of Consolidated Operations

The following is a discussion of our results of operations for the years ended March 31, 2026 and 2025. For a more detailed discussion of the factors that affected the revenues and the operating expenses of our CF, FR, and FVA business segments in these periods, see “Business Segments” below.

Year Ended March 31, Change

Operating expenses:

Net income (loss) attributable to noncontrolling interest 1,523 — 100 %

Net income attributable to Houlihan Lokey, Inc. $ 425,697 $ 399,711 7 %

Year Ended March 31, 2026 versus March 31, 2025

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.

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.

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Other (income) expense, net increased to $(35.2) million for the year ended March 31, 2026, compared with $(28.8) million for the year ended March 31, 2025. The increase in other (income) expense, net was primarily due to higher interest income.

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%.

Business Segments

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.

Year Ended March 31, Change

Revenues by segment

Segment profit (1)

Segment Metrics:

Number of Managing Directors (3)

Financial Restructuring 59 57 4 %

Financial and Valuation Advisory 44 42 5 %

Number of closed transactions/Fee Events (4)

Financial Restructuring 143 145 (1) %

Financial and Valuation Advisory 2,519 2,441 3 %

(1)We adjust the compensation expense for a business segment in situations where an employee residing in one business segment is performing work in another business segment where the revenues are accrued. Segment profit may vary significantly between periods depending on the levels of collaboration among the different segments.

(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.

(3)As of the end of the respective reporting period.

(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.

Corporate Finance

Year Ended March 31, 2026 Compared to the Year Ended March 31, 2025

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.

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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.

Financial Restructuring

Year Ended March 31, 2026 Compared to the Year Ended March 31, 2025

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.

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.

Financial and Valuation Advisory

Year Ended March 31, 2026 Compared to the Year Ended March 31, 2025

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.

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.

Corporate Expenses

Year Ended March 31, 2026 Compared to the Year Ended March 31, 2025

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.

Liquidity and Capital Resources

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.

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.

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

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.

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.

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.

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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.

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).

Cash Flows

Our operating cash flows are primarily influenced by the amount and timing of receipt of advisory fees and the payment of operating expenses, including payments of incentive compensation to our employees. We pay a significant portion of our incentive compensation during the first and third quarters of each fiscal year. A summary of our operating, investing, and financing cash flows is as follows:

Year Ended March 31,

Operating activities:

Net cash provided by/(used in) investing activities 2,176 (265,058)

Effects of exchange rate changes on cash and cash equivalents 4,926 (756)

Net increase in cash, cash equivalents, and restricted cash 218,289 253,725

Year Ended March 31, 2026

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.

Year Ended March 31, 2025

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.

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Critical Accounting Policies and Estimates

We believe that the critical accounting policies and practices included below are both most important to the portrayal of the Company's financial condition and results, and require management's most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. For a discussion of these and other significant accounting policies and their impact on our consolidated financial statements, see Note 2 included in Part II, Item 8 of this Form 10-K.

The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period for which they are determined to be necessary.

Recognition of Revenue

See Note 2 and Note 3 included in Part II, Item 8 of this Form 10-K for additional information.

Business Combinations

Accounting for business combinations requires management to make significant estimates and assumptions to determine the fair value of assets acquired and liabilities assumed. Our most critical estimates in this area involve the valuation of contingent consideration, both at the time of acquisition and subsequently through the earn out period. The fair value of these instruments is determined using valuation models that require highly subjective management judgment regarding future performance. Key assumptions include, but are not limited to, projected revenues, backlog realization, and discount rates. These estimates are inherently uncertain and highly sensitive to changes in economic conditions and business performance. Changes in underlying assumptions to our contingent consideration liabilities can cause volatility in our earnings, resulting in potentially material recognized gains or losses.

Recent Accounting Developments

For additional information on recently issued accounting developments and their impact or potential impact, if applicable, on our consolidated financial statements, see Note 2 included in Part II, Item 8 of this Form 10-K.

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Item 7A.Quantitative and Qualitative Disclosures about Market Risk

Market Risk and Credit Risk

Our business is not capital intensive and we generally do not issue debt or invest in derivative instruments. As a result, our balance sheet is not subject to significant market risk (including interest rate risk) or credit risk (except in relation to receivables). We maintain our cash and cash equivalents with financial institutions with high credit ratings. Although these deposits are generally not insured, management believes we are not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.

Our cash and cash equivalents are denominated primarily in U.S. Dollars, Pound Sterling, Euros, and Yen, and we face foreign currency risk in our cash balances and other assets and liabilities held in accounts outside the U.S. due to potential currency movements and the associated foreign currency translation accounting requirements.

We regularly review our accounts receivable and allowance for credit losses by considering factors such as historical experience, credit quality, age of the accounts receivable and recoverable expense balances, and the current economic conditions that may affect a customer’s ability to pay such amounts owed to us. We maintain an allowance for credit losses that, in our opinion, provides for an adequate reserve to cover losses that may be incurred.

Risks Related to Cash and Short-Term Investments

Our cash is maintained in U.S. and non-U.S. bank accounts. We have exposure to foreign exchange risks through all of our international affiliates, and through some of our investments. However, we believe our cash is not subject to any material interest rate risk, equity price risk, credit risk or other market risk. Consistent with our past practice, we expect to maintain our cash in bank accounts or invested in highly liquid securities.

Exchange Rate Risk

The exchange rate of the U.S. Dollar relative to the currencies in the non-U.S. countries in which we operate may have an effect on the reported value of our non-U.S. Dollar denominated or non-U.S.-based assets and liabilities and, therefore, be reflected as a change in other comprehensive income, net of tax. Our non-U.S. assets and liabilities that are sensitive to exchange rates consist primarily of trade payables and receivables, work in progress, and cash. For the years ended March 31, 2026, 2025, and 2024, the net impact of the fluctuation of foreign currencies in other comprehensive income within the Consolidated Statements of Comprehensive Income was $14.4 million, $3.3 million, and $(3.8) million, respectively. A hypothetical 10% depreciation in the U.S. Dollar relative to the functional currencies of our foreign subsidiaries as of March 31, 2026 would have resulted in an increase in our other comprehensive income, net of tax, of approximately $116 million for the year ended March 31, 2026.

In addition, the reported amounts of our revenues and expenses may be affected by movements in the rate of exchange between the currencies in the non-U.S. countries in which we operate and the U.S. Dollar, affecting our operating results. We have analyzed our potential exposure to changes in the value of the U.S. Dollar relative to the Pound Sterling, Euro, and Yen, the primary currencies of our international operations, by performing a sensitivity analysis on our net income, and determined that while our earnings are subject to fluctuations from changes in foreign currency rates, at this time we do not believe we face any material risk in this respect.

In summary, we have been impacted by changes in exchange rates and the potential impact of future currency fluctuation will increase as our international expansion continues. The magnitude of this impact will depend on the timing and volume of revenues and expenses of, and the amounts of assets and liabilities in, our foreign subsidiaries along with the timing of changes in the relative value of the U.S. Dollar to the currencies of the non-U.S. countries in which we operate.

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Item 8.Financial Statements

HOULIHAN LOKEY, INC. AND SUBSIDIARIES

Index to Consolidated Financial Statements Page

Report of Independent Registered Public Accounting Firm 34

Notes to Consolidated Financial Statements 43

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Houlihan Lokey, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Houlihan Lokey, Inc. and subsidiaries (the Company) as of March 31, 2026 and 2025, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended March 31, 2026, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the years in the three-year period ended March 31, 2026, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our report dated May 22, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Recognition of Revenue

As disclosed in Note 2 to the consolidated financial statements, the Company recognizes revenue from contracts with customers upon satisfaction of the performance obligation by transferring the promised service to the customers. A service is transferred to a customer when the customer obtains control of and derives benefit from that service. Revenues from Corporate Finance engagements primarily consist of fees generated in connection with advisory services related to mergers and acquisitions, capital markets, and other corporate finance transactions. Fees earned upon the successful completion of a Corporate Finance transaction or engagement (“Completion Fees”) are recognized when the related transaction has been effectively closed. Effective closure of a transaction or engagement occurs when the Company has transferred control of the promised service, the customer obtains control, and the variable consideration constraint has been resolved. The Company recorded revenue of approximately $1.7 billion for Corporate Finance for the year ended March 31, 2026.

We identified the evaluation of the revenue recognition related to uncollected Completion Fees of Corporate Finance transaction and engagement fees as a critical audit matter because auditor judgment was required in evaluating the effective closure of a transaction or engagement.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of the internal controls related to the Company’s uncollected transaction and engagement fee revenue recognition process, including controls related to the evaluation of the effective closure of transactions and resolution of the variable consideration constraints. For a sample of transactions, we tested the effective closure by comparing the transaction or engagement completion status to contract terms, using a combination of executed third party contracts and other relevant and reliable third-party information.

/s/ KPMG LLP

We have served as the Company’s auditor since 2006.

Los Angeles, California

May 22, 2026

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Houlihan Lokey, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Houlihan Lokey, Inc. and subsidiaries' (the Company) internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2026 and 2025, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended March 31, 2026, and the related notes (collectively, the consolidated financial statements), and our report dated May 22, 2026 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Los Angeles, California

May 22, 2026

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data and par value) March 31, 2026 March 31, 2025

Assets:

Liabilities, temporary equity and stockholders' equity

Liabilities:

Commitments and contingencies (Note 16)

Redeemable noncontrolling interest 110,554 —

Stockholders' equity:

Accumulated other comprehensive loss (48,910) (63,281)

See accompanying Notes to Consolidated Financial Statements

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Year Ended March 31,

(In thousands, except share and per share data) 2026 2025 2024

Operating expenses:

Revaluation of acquisition contingent consideration 17,895 (1,023) (10,373)

Net (income) loss attributable to noncontrolling interest 1,523 — —

Attributable to Houlihan Lokey, Inc. common stockholders:

Weighted average shares of common stock outstanding:

Earnings per share (Note 13)

See accompanying Notes to Consolidated Financial Statements

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year Ended March 31,

Other comprehensive income (loss), net of tax:

Comprehensive (income) loss attributable to noncontrolling interest 2,589 — —

See accompanying Notes to Consolidated Financial Statements

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(In thousands, except share data) Shares $ Shares $ $ $ $ $

Other comprehensive income — — — — — — (3,794) (3,794)

(In thousands, except share data) Shares $ Shares $ $ $ $ $

Other comprehensive income — — — — — — 3,327 3,327

See accompanying Notes to Consolidated Financial Statements

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (CONTINUED)

(In thousands, except share data) Shares $ Shares $ $ $ $ $

Other comprehensive income — — — — — — 14,371 14,371

See accompanying Notes to Consolidated Financial Statements

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended March 31,

Cash flows from operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Revaluation of acquisition contingent consideration 17,895 (1,047) (10,373)

Changes in operating assets and liabilities:

Cash flows from investing activities:

Acquisition of businesses, net of cash acquired (2,539) (69,188) (3,856)

Net cash provided by/(used in) investing activities 2,176 (265,058) (70,406)

Cash flows from financing activities:

Other financing activities — 710 587

Supplemental disclosures of non-cash activities:

Promissory note issued as consideration for acquisition — 351 14,500

Cash paid during the period:

See accompanying Notes to Consolidated Financial Statements

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share data or as otherwise stated)

Note 1 — Background

Houlihan Lokey, Inc. is a Delaware corporation. Unless the context otherwise requires, as used in this Annual Report on Form 10-K, the terms “Houlihan Lokey”, “HL, Inc.”, “the Company”, “we”, “our”, and “us”, refer to Houlihan Lokey, Inc., and, in each case, unless otherwise stated, all of its subsidiaries.

The Company offers financial services and advice to a broad clientele through more than thirty offices worldwide. The Company earns professional fees by providing focused services across the following three business segments:

• Corporate Finance (“CF”) provides general financial advisory services and advice on mergers and acquisitions and capital markets offerings. We advise public and private institutions, including financial sponsors, on a wide variety of matters, including buy-side and sell-side M&A transactions, debt and equity financings in both the private and public markets, and other corporate finance transactions. The majority of our CF revenues consists of fees paid upon the successful completion of the transaction or engagement (“Completion Fees”). A CF transaction can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to the fees paid at the time an engagement letter is signed (“Retainer Fees”) and, in some cases, fees paid during the course of the engagement (“Progress Fees”).

• Financial Restructuring (“FR”) provides advice to debtors, creditors and other parties-in-interest in connection with recapitalization/deleveraging transactions implemented through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. As part of these engagements, our FR business segment offers a wide range of advisory services to our clients, including: the structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; liability management transactions; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The majority of our FR revenues consists of Completion Fees. Although atypical, FR transactions can fail to be completed for many reasons that are outside of our control. In these instances, our fees are generally limited to Retainer Fees and/or Progress Fees.

• Financial and Valuation Advisory (“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.

Note 2 — Basis of Presentation and Consolidation

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”), pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), and include all information and footnotes required for consolidated financial statement presentation, and include all disclosures required under GAAP for annual financial statements.

In connection with certain acquisitions, contingent consideration is issued as part of the purchase price. Historically, the associated quarterly fair-value remeasurements of this consideration were recorded in Other (income) expense, net. Beginning with the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, these remeasurements are presented on the face of the Consolidated Statements of Income under the line item Revaluation of acquisition contingent consideration. Prior period amounts have been recast to conform with this presentation. These reclassifications did not affect net income, stockholders’ equity, or cash flows as previously reported.

Additionally, certain other prior year amounts have been reclassified to conform to the current period's presentation. These reclassifications had no impact on net income, shareholders' equity or net cash flows as previously reported.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries where it has a controlling financial interest. All intercompany balances and transactions have been eliminated.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Management estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period, and disclosure of contingent assets and liabilities at the reporting date. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Items subject to such estimates and assumptions include, but are not limited to: the allowance for credit losses; the valuation of deferred tax assets, valuation of acquired intangibles and goodwill, accrued expenses, and share based compensation; the allocation of goodwill and other assets across the reporting units (segments); and reserves for income tax uncertainties and other contingencies.

Revenues

Revenues consist of fee revenues from advisory services and reimbursed costs incurred in fulfilling the contracts. Revenues reflect fees generated from our CF, FR, and FVA business segments. Revenues for all three business segments are recognized upon satisfaction of the performance obligation, which may be satisfied over time or at a point in time. The amount and timing of the fees paid vary by the type of engagement.

The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for those promised services (i.e., the “transaction price”). In determining the transaction price, we consider multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, we consider the range of possible outcomes, the predictive value of our past experiences, the time period of when uncertainties are expected to be resolved and the amount of consideration that is susceptible to factors outside of our influence, such as market volatility or the judgment and actions of third parties. The substantial majority of the Company’s advisory fees (i.e., the success-related Completion Fees) are considered variable and constrained as they are contingent upon a future event which includes factors outside of our control (e.g., completion of a transaction or third-party emergence from bankruptcy or approval by the court).

Revenues from CF engagements primarily consist of fees generated in connection with advisory services related to mergers and acquisitions, capital markets, and other corporate finance transactions. Completion Fees from these engagements are recognized at a point in time when the related transaction has been effectively closed. At that time, the Company has transferred control of the promised service and the customer obtains control. CF contracts generally contain a variety of promised services that may be capable of being distinct, but they are not distinct within the context of the engagement as the various services are inputs to the combined output of successfully brokering a specific transaction. Completion Fees, Retainer Fees, and Progress Fees from these engagements are considered variable and constrained until the corresponding transaction has been effectively closed as they are contingent upon a future event, which includes factors outside of our control (e.g., completion of a transaction or regulatory approval).

Revenues from FR engagements primarily consist of fees generated in connection with advisory services to debtors, creditors and other parties-in-interest involving recapitalization or deleveraging transactions implemented both through bankruptcy proceedings and out-of-court exchanges, consent solicitations or other mechanisms, as well as in distressed mergers and acquisitions and capital markets activities. Retainer Fees and Progress Fees from FR engagements are recognized over time using a time elapsed measure of progress as our clients simultaneously receive and consume the benefits of those services as they are provided. Completion Fees from these engagements are recognized at a point in time when the related transaction has been effectively closed. At that time, the Company has transferred control of the promised service and the customer obtains control. Completion Fees from these engagements are considered variable and constrained until the related transaction has been effectively closed as they are contingent upon a future event, which includes factors outside of our control (e.g., completion of a transaction or third party emergence from bankruptcy or approval by the court).

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Revenues from FVA engagements primarily consist of fees generated in connection with valuation, diligence, tax transaction accounting, and other financial advisory services and rendering fairness, solvency and other financial opinions. Revenues are recognized at a point in time as these engagements include a singular objective that does not transfer any notable value to the Company’s clients until the opinions or reports have been rendered and delivered to the client. However, certain engagements consist of advisory services where fees are usually based on the hourly rates of our financial professionals. Such revenues are recognized over time as the benefits of these advisory services are transferred to the Company’s clients throughout the course of the engagement, and, as a practical expedient, the Company has elected to use the ‘as-invoiced’ approach to recognize revenue.

Taxes, including value added taxes, collected from customers and remitted to governmental authorities are accounted for on a net basis, and therefore, are excluded from revenue in the Consolidated Statements of Income.

Operating Expenses

The majority of the Company’s operating expenses are related to compensation for employees, which includes the amortization of the relevant portion of the Company’s share-based incentive plans (Note 14). Other types of operating expenses include: Travel, meals, and entertainment; Rent; Depreciation and amortization; Information technology and communications; Professional fees; and Revaluation of acquisition contingent consideration.

Redeemable Noncontrolling Interest

Noncontrolling interests subject to redemption features outside the Company's control are presented outside of permanent equity on the Consolidated Balance Sheets. Redeemable noncontrolling interests are initially recorded at fair value. At the end of each reporting period, the carrying amount is adjusted for the noncontrolling interest’s share of comprehensive income (loss), redemptions, and distributions, if applicable.

The Company subsequently measures the redeemable noncontrolling interest at the greater of its adjusted carrying amount or its current redemption value. The Company has elected to recognize the entire change in redemption value at each reporting period, such that the carrying amount of the noncontrolling interest equals the redemption amount at each reporting date (or its adjusted carrying amount, if greater). In accounting for these remeasurements, any excess of the redemption value over the fair value of the redeemable noncontrolling interest is recorded to retained earnings, with the residual difference between the carrying value and the redemption value recorded to additional paid-in capital. The remeasurement adjustment recorded to retained earnings is treated as a reduction to net income available to the Company's common stockholders in the calculation of earnings per share.

Translation of Foreign Currency Transactions

The reporting currency for the consolidated financial statements of the Company is the U.S. Dollar. The assets and liabilities of subsidiaries whose functional currency is other than the U.S. Dollar are included in the consolidation by translating the assets and liabilities at the reporting period-end exchange rates; however, revenues and expenses are translated using the applicable exchange rates determined on a monthly basis throughout the fiscal year. Resulting translation adjustments are reported as a separate component of Accumulated other comprehensive loss, net of applicable taxes.

From time to time, we enter into transactions to hedge our exposure to certain foreign currency fluctuations through the use of derivative instruments or other methods. As of March 31, 2026, we had no open foreign currency forward contracts outstanding. As of March 31, 2025, we had one foreign currency forward contract between the U.S. Dollar and Pound Sterling, with an aggregate notional value of $75,000 and one foreign currency forward contract between the Swedish Krona and the Pound Sterling, with an aggregate notional value of SEK 79,000. The fair value of these foreign currency forward contracts represented a gain included in Other operating expenses of $0 and $237 during the year ended March 31, 2026 and March 31, 2025, respectively.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Fair Value Measurements

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels in accordance with Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement:

•Level I Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

•Level II Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

•Level III Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

For Level III investments in which pricing inputs are unobservable and limited market activity exists, management's determination of fair value is based upon the best information available, and may incorporate management's own assumptions or involve a significant degree of judgment.

The following methods and assumptions were used by the Company in estimating fair value disclosures:

•Corporate debt securities: All fair value measurements are obtained from a third-party pricing service and are not adjusted by management.

•U.S. treasury securities: Fair values for U.S. treasury securities are based on quoted prices from recent trading activity of identical or similar securities. All fair value measurements are obtained from a third-party pricing service and are not adjusted by management.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the instrument.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, unbilled work in progress, accounts payable and accrued expenses, and deferred income approximates fair value due to the short maturity of these instruments.

The carrying value of loans to employees included in Other assets approximates fair value due to the variable interest rate borne by those instruments.

Cash and Cash Equivalents, and Restricted Cash

Cash and cash equivalents include cash held at banks and highly liquid investments with original maturities of three months or less. As of March 31, 2026, the Company had cash balances with banks in excess of insured limits. The Company believes it is not exposed to any significant credit risk with respect to Cash and cash equivalents.

The following table provides a reconciliation of cash and cash equivalents and restricted cash included within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.

Total cash, cash equivalents, and restricted cash $ 1,193,868 $ 975,579

(1)Restricted cash included deposits securing letters of credit for leases, cash held in escrow accounts, and collateral to support rent guarantees. Restricted cash is included within Other assets in the Consolidated Balance Sheets.

Investment Securities

Investment securities consist primarily of corporate debt and U.S. treasury securities with original maturities over 90 days. The Company classifies its corporate debt and U.S. treasury securities as trading and measures them at fair value in the Consolidated Balance Sheets. Unrealized holding gains and losses for trading securities are included in Other operating expenses in the accompanying Consolidated Statements of Income.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Allowance for Credit Losses

The allowance for credit losses on accounts receivable and unbilled work in progress reflects management’s best estimate of expected losses by applying the current expected credit losses model. This model analyzes expected losses based on relevant information about historical experience, current conditions, and reasonable and supportable forecasts that could potentially affect the collectability of the reported amounts. This is recorded through provision for bad debts, which is included in Other operating expenses in the accompanying Consolidated Statements of Income. Amounts deemed to be uncollectible are written off against the allowance for credit losses.

Property and Equipment

Property and equipment are stated at cost. Repair and maintenance charges are expensed as incurred and costs of renewals or improvements are capitalized at cost. Depreciation on furniture and office equipment is recognized on a straight-line basis over the estimated useful lives of the respective assets.

Income Taxes

The Company files a consolidated federal income tax return, as well as consolidated and separate returns in state and local jurisdictions, and the Company reports income tax expense on this basis.

We account for income taxes in accordance with ASC Topic 740, Income Taxes, which requires the recognition of tax benefits or expenses on temporary differences between the financial reporting and tax basis of our assets and liabilities. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The measurement of the deferred items is based on enacted tax laws and applicable tax rates. A valuation allowance related to a deferred tax asset is recorded if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The Company accounts for the tax impacts of the Global Intangible Low-Taxed Income tax as a period cost (permanent item).

The Company utilized a comprehensive model to recognize, measure, present, and disclose in its financial statements any uncertain tax positions taken or that are expected to be taken on a tax return. The impact of an uncertain tax position that is more likely than not of being sustained upon audit by the relevant taxing authority must be recognized at the largest amount that is more likely than not to be sustained. No portion of an uncertain tax position will be recognized if the position has less than a 50% likelihood of being sustained. Interest expense and penalties related to income taxes are included in the provision for income taxes in the accompanying Consolidated Statements of Income.

Share-Based Incentive Plans

We recognize compensation expense for all stock-based awards, including restricted stock and RSU awards, based on the estimate of fair value of the award at the grant date. The fair value of each restricted stock and RSU award is measured based on the closing stock price of our common stock on the date of grant. We account for forfeitures as they occur. The compensation expense is recognized using a straight-line basis over the requisite service periods of the awards.

The share awards are generally classified as equity awards at the time of grant unless the number of shares granted is unknown. Awards that are settleable in shares based upon a future determinable stock price are classified as liabilities until the price is established and the resulting number of shares is known, at which time they are re-classified from liabilities to equity awards.

Leases

We assess whether an arrangement is or contains a lease at the inception of the agreement. Right-of-use (“ROU”) assets represent our right to use underlying assets for the lease term and lease liabilities represent our obligation to make lease payments arising from leases. ROU assets and lease liabilities are recognized at the commencement date based on the present value of future lease payments over the lease terms utilizing the discount rate implicit in the leases. If the discount rate implicit in the leases is not readily determinable, the present value of future lease payments is calculated utilizing the Company’s incremental borrowing rate, which approximates the interest that the Company would have to pay on a secured loan. The Company elected to utilize a portfolio approach and applies the rates to a portfolio of leases with similar terms and economic environments. The terms of our leases include options to extend a lease when it is reasonably certain that we will exercise those options. ROU assets and lease liabilities are subject to adjustment in the event of modification to lease terms, changes in probability that an option to extend or terminate a lease would be exercised and other factors. In addition, ROU assets are periodically reviewed for impairment.

Lease expense is recognized on a straight-line basis over the lease terms. Lease expense includes amortization of the ROU assets and accretion of the lease liabilities. Amortization of ROU assets is calculated as the periodic lease cost less accretion of the lease liability. The amortized period for ROU assets is limited to the expected lease term.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

The Company has elected a practical expedient to combine the lease and non-lease components into a single lease component. The Company also elected the short-term lease measurement and recognition exemption and does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less.

Goodwill and Intangible Assets

Goodwill represents an acquired company’s acquisition cost over the fair value of acquired net tangible and intangible assets. Goodwill is the net asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible assets identified and accounted for include tradenames and marks, backlog, developed technologies, and customer relationships. Those intangible assets with finite lives, including backlog and customer relationships, are amortized over their estimated useful lives.

Goodwill is reviewed annually during the fourth quarter for impairment and more frequently if potential impairment indicators exist. Goodwill is reviewed for impairment in accordance with ASC Topic 350, Intangibles – Goodwill and Other, which permits management to perform a qualitative analysis to determine whether it is more likely than not that the fair value of a reporting unit is less than its corresponding carrying value. If management determines the reporting unit's fair value is more likely than not less than its carrying value, a quantitative analysis will be performed to compare the fair value of the reporting unit with its corresponding carrying value. If the conclusion of the quantitative analysis is that the fair value is in fact less than the carrying value, management will recognize a goodwill impairment charge for the amount by which the reporting unit’s carrying value exceeds its fair value. Impairment testing of goodwill requires a significant amount of judgment in assessing both qualitative factors and if necessary, quantitative factors used to estimate the fair value of the reporting unit. As of March 31, 2026, management concluded that it was not more likely than not that the Company’s reporting units’ fair value was less than their carrying amount and no further quantitative impairment testing was necessary.

Indefinite-lived intangible assets are reviewed annually for impairment through performance of a qualitative assessment. If it is more likely than not that the asset is impaired, the amount that the carrying value exceeds the fair value is recorded as an impairment expense. As of March 31, 2026, management concluded that it was not more likely than not that the fair values were less than the carrying values.

Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group (inclusive of other long-lived assets) be tested for possible impairment, management first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. As of March 31, 2026, no events or changes in circumstances were identified that indicated that the carrying amount of the finite-lived intangible assets were not recoverable.

Business Combinations

Accounting for business combinations requires management to make significant estimates and assumptions. We allocate the purchase consideration to identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with any consideration transferred in excess of these fair values recorded as goodwill. Contingent consideration obligations, typically associated with future revenue performance targets by the acquiree, are recognized at fair value on the acquisition date, generally as part of the purchase consideration. These arrangements are carried at fair value as of each reporting period, with changes in fair value recognized in the Consolidated Statements of Income. During the measurement period, which does not exceed one year from the acquisition date, we may record adjustments to the provisional amounts recognized, with a corresponding offset to goodwill. The results of operations of businesses acquired by the Company are included in the Consolidated Statements of Income from their respective dates of acquisition.

Recent Accounting Pronouncements

In December 2025, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU clarifies existing interim reporting disclosure requirements by providing a comprehensive list of required interim disclosures and introducing a principle that requires entities to disclose events occurring since the end of the most recent annual reporting period that materially affect the entity. The guidance is effective for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU modernizes the accounting for costs associated with internal-use software by replacing the project-stage approach with a principles-based model for capitalization. The guidance is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company has early adopted this ASU as of September 30, 2025, and the adoption did not have a material impact on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires disaggregated disclosure of certain income statement expenses within the footnotes of the financial statements. The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU enhances transparency in income tax reporting by expanding disclosure requirements for the rate reconciliation and income taxes paid. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company has adopted ASU 2023-09 in the current year and applied such adoption on a prospective basis. See Note 12 for the expanded disclosures required under this accounting update.

Note 3 — Revenue Recognition

Disaggregation of Revenues

The Company has disclosed disaggregated revenues based on its business segment and geographical area, which provides a reasonable representation of how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See Note 18 for additional information.

Contract Balances

The timing of revenue recognition may differ from the timing of payment by customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred income (contract liability) until the performance obligations are satisfied.

Costs incurred in fulfilling advisory contracts with point-in-time revenue recognition are recorded as a contract asset when the costs (i) relate directly to a contract, (ii) generate or enhance resources of the Company that will be used in satisfying performance obligations, and (iii) are expected to be recovered. The Company amortizes the contract asset costs related to fulfilling a contract based on recognition of fee revenues for the corresponding contract.

Costs incurred in fulfilling an advisory contract with over-time revenue recognition are expensed as incurred.

The change in the Company’s contract assets and liabilities during the period primarily reflects the timing difference between the Company’s performance and the customer’s payment. The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers:

Unbilled work in progress, net of allowance for credit losses 271,243 157,760

(1)Included within Accounts receivable, net of allowance for credit losses in the Consolidated Balance Sheets.

(2)Represents deferred income which is included within Other liabilities in the Consolidated Balance Sheets.

During the years ended March 31, 2026 and 2025, $37,129 and $21,514 of revenues, respectively, were recognized that were included in the Deferred income balance at the beginning of the period.

As a practical expedient, the Company does not disclose information about remaining performance obligations pertaining to (i) contracts that have an original expected duration of one year or less and/or (ii) contracts where the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct service that is or forms part of a single performance obligation. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at March 31, 2026.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Note 4 — Related Party Transactions

Other assets in the accompanying Consolidated Balance Sheets includes loans receivable from certain employees of $35,914 and $44,290 as of March 31, 2026 and 2025, respectively.

Note 5 — Fair Value Measurements

The following table presents information about the Company's financial assets, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values:

Level I Level II Level III Total

Common stock 5 — — 5

Certificates of deposit — 359 — 359

Level I Level II Level III Total

Common stock 21 — — 21

Certificates of deposit — 549 — 549

The Company had no transfers between fair value levels during the years ended March 31, 2026 and March 31, 2025.

Note 6 — Investment Securities

The amortized cost and gross unrealized gains (losses) of our investment securities accounted under the fair value method were as follows:

Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value

Common stock 5 — — 5

Certificates of deposit 359 — — 359

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value

Common stock 21 — — 21

Certificates of deposit 549 — — 549

Scheduled maturities of the debt securities held by the Company included within the investment securities portfolio were as follows:

Amortized Cost Fair Value Amortized Cost Fair Value

Note 7 — Allowance for Credit Losses

The following table presents information about the Company's allowance for credit losses:

Recovery/(write-off) of uncollectible accounts, net (7,046) (3,552)

Note 8 — Property and Equipment

Property and equipment, net of accumulated depreciation consists of the following:

Depreciation expense of $27,554, $21,942, and $17,782 was recognized during the years ended March 31, 2026, 2025, and 2024, respectively.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Note 9 — Goodwill and Other Intangible Assets

The following table provides a reconciliation of Goodwill and Other intangible assets, net reported on the Consolidated Balance Sheets.

The following table provides a reconciliation of goodwill attributable to the Company’s business segments:

(1)Change is primarily attributable to a business combination.

(2)Change is primarily attributable to foreign currency translation adjustments.

Amortization expense of approximately $15,080, $19,328, and $10,754 was recognized for the years ended March 31, 2026, 2025, and 2024, respectively.

The estimated future amortization for finite-lived intangible assets for each of the next five years and thereafter are as follows:

Year Ended March 31,

Note 10 — Other Liabilities

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 $150,000 (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 $200,000) 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 and 2025, no principal was outstanding under the HLI Line of Credit.

In December 2024, the Company acquired Waller Helms Advisors LLC (“WHA”). Contingent consideration was issued in connection with the acquisition of WHA, which had a fair value of $31,670 and $30,000 as of March 31, 2026 and 2025, respectively.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Note 11 — Accumulated Other Comprehensive (Loss)

Accumulated other comprehensive (loss) is comprised entirely of foreign currency translation adjustments.

Note 12 — Income Taxes

The Company’s provision for income taxes was $138,091, $131,624, and $110,238, for the years ended March 31, 2026, 2025, and 2024, respectively. These represent effective tax rates of 24.6%, 24.8%, and 28.2% for the years ended March 31, 2026, 2025, and 2024, respectively.

Year Ended March 31,

Income before provision for income taxes by geography

The provision for income taxes on operations for the years ended March 31, 2026, 2025, and 2024 is comprised of the following:

Year Ended March 31,

Current:

Deferred:

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

The provision for income taxes on operations for the year ended March 31, 2026 is reconciled to the income taxes computed at the statutory federal income tax rate (computed by applying the federal corporate rate of 21% to consolidated operating income before provision for income taxes) as follows:

Year Ended March 31,

U.S. federal statutory tax rate $ 118,076 21.0 %

Nontaxable or nondeductible items

Executive compensation limit 10,485 1.9 %

Effect of cross-border tax laws (2,513) (0.4) %

Foreign tax effects

Other foreign jurisdictions 16,014 2.8 %

(1)State and local taxes in NYC, NY and CA made up the majority (greater than 50 percent) of the tax effect in this category.

A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rates prior to the adoption of the new income tax disclosures guidance is shown below for the years ended March 31, 2025 and 2024:

Year Ended March 31,

State and local taxes, net of federal tax effect 21,297 4.0 % 20,027 5.1 %

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Deferred income taxes arise principally from temporary differences between book and tax recognition of income, expenses, and losses relating to financing and other transactions. Deferred income taxes as of March 31, 2026 and March 31, 2025, comprise the following:

Deferred tax assets:

Deferred compensation expense/accrued bonus $ 139,533 $ 125,428

Accounts receivable and work in progress 1,153 950

Deferred tax asset valuation allowance (12,623) (13,415)

Deferred tax liabilities:

Operating lease right-of-use assets (79,940) (67,901)

The Company has various foreign net operating losses totaling $37,541. If not utilized, the foreign net operating loss carryforwards will begin to expire in two years, although in certain jurisdictions these attributes do not expire.

We continue to expect that the remaining balance of our undistributed foreign earnings will be indefinitely reinvested. If we determine that all or a portion of such foreign earnings are no longer indefinitely reinvested, we may be subject to additional foreign withholding taxes and U.S. state income taxes. Determination of the amount of unrecognized deferred tax liability on these unremitted earnings is not practicable.

A reconciliation of the unrecognized tax position as of March 31, 2026 and 2025 is as follows:

Unrecognized tax position at the beginning of the year $ 329 $ 15,800

Decrease related to prior year tax positions — (15,471)

Unrecognized tax position at the end of the year $ 329 $ 329

The Company files a consolidated federal income tax return, as well as consolidated and separate returns in state and local jurisdictions. As of March 31, 2026, all of the federal income tax returns filed since 2023 by the Company are still subject to adjustment upon audit. The Company also files combined and separate income tax returns in many states, which are also open to adjustment.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

The amount of cash income taxes, net of refunds paid during the fiscal year ended March 31, 2026 were as follows:

Federal taxes

State & local taxes

Other state jurisdictions 26,356

Foreign taxes

Other foreign jurisdictions 17,294

Total cash taxes paid $ 187,247

Note 13 — Earnings Per Share

The calculations of basic and diluted earnings per share attributable to holders of shares of common stock are presented below. The determination of weighted average shares of common stock outstanding includes both the Company's Class A common stock and Class B common stock. Please refer to Note 15 for further detail on our two classes of authorized Company common stock

Year Ended March 31,

Numerator:

Denominator:

Diluted earnings per share $ 6.22 $ 5.82 $ 4.11

Note 14 — Employee Benefit Plans

Share-Based Incentive Plans

Awards of restricted shares and restricted stock units have been and will continue to be made under the Amended and Restated Houlihan Lokey, Inc. 2016 Incentive Award Plan (the “2016 Incentive Plan”), which became effective in September 2017 and was amended in October 2017 and again in October 2024. Under the 2016 Incentive Plan, it is anticipated that the Company will continue to grant cash and equity-based incentive awards to eligible employees in order to attract, motivate, and retain the talent necessary to operate the Company's business. Equity-based incentive awards issued under the 2016 Incentive Plan generally vest over a four-year period. As of March 31, 2026, pursuant to the 2016 Incentive Plan, the number of remaining shares available for issuance was approximately 10.9 million.

Excess tax benefits of $31,330 and $20,387 were recognized during the years ended March 31, 2026 and 2025, respectively, as a component of the provision for income taxes.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Activity in equity-classified share awards which relate to the 2016 Incentive Plan during the years ended March 31, 2026, 2025, and 2024, is as follows:

Unvested Share Awards Shares Weighted Average Grant Date Fair Value

Activity in liability classified share awards during the years ended March 31, 2026, 2025, and 2024 is as follows:

Awards Settleable in Shares Fair Value

Share price determined-converted to cash payments (3)

Share price determined-transferred to equity grants (1) (1,806)

Forfeited —

Share price determined-converted to cash payments (5)

Share price determined-transferred to equity grants (1) (3,896)

Offer to grant 95

Converted to equity grants (unvested) (3,127)

Share price determined-transferred to equity grants (1) (4,703)

(1)27,165, 29,057, and 40,702 shares for the years ended March 31, 2026, 2025, and 2024, respectively.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Activity in RSU awards during the years ended March 31, 2026, 2025, and 2024, respectively.

Restricted Stock Units RSUs Weighted Average Grant Date Fair Value

Compensation expenses for the Company associated with both equity-classified and liability-classified awards totaled $201,304, $168,443, and $166,595 for the years ended March 31, 2026, 2025, and 2024, respectively. As of March 31, 2026 and March 31, 2025 there was $300,801 and $303,520, respectively, of total unrecognized compensation cost related to unvested share awards granted under the 2016 Incentive Plan. These costs are recognized over a weighted average period of approximately 1.9 years and 1.8 years, as of March 31, 2026 and March 31, 2025, respectively.

Note 15 — Stockholders' Equity

There are two classes of authorized Company common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share, and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock may be converted into one share of Class A common stock at the option of its holder and will be automatically converted into one share of Class A common stock upon transfer thereof, subject to certain exceptions. All Class B shares are held by the HL Voting Trust.

Dividends

Previously declared dividends related to unvested shares of $19,084 and $22,790 were unpaid as of March 31, 2026 and 2025, respectively.

On April 30, 2026, the Company's board of directors declared a quarterly cash dividend of $0.70 per share of Class A and Class B common stock, payable on June 15, 2026, to shareholders of record on June 1, 2026.

Share Repurchases

In April 2022, the board of directors authorized an increase to the existing July 2021 share repurchase program, which provides for share repurchases of an aggregate amount of up to $500,000 of the Company's Class A common stock and Class B common stock. As of March 31, 2026, shares with a value of $230,125 remained available for purchase under the program.

During the years ended March 31, 2026, 2025, and 2024, the Company repurchased 792,248, 676,572, and 772,794 shares, respectively, of our common stock, to satisfy $142,738, $102,343, and $70,713 of required withholding taxes in connection with the vesting of restricted awards, respectively. During the years ended March 31, 2026, 2025, and 2024, the Company repurchased an additional 977,600, 322,344, and 240,666 shares of its outstanding common stock, respectively, at a weighted average price of $179.42, $161.90, and $103.68 per share, excluding commissions, for an aggregate purchase price of $175,399, $52,189, and $24,952, respectively.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Note 16 — Leases

Lessee Arrangements

Operating Leases

We primarily lease real estate which is utilized for our office locations. As of March 31, 2026, the remaining term of our operating leases ranged from 1 to 13 years with various automatic extensions.

The following table outlines the maturity of our existing operating lease liabilities on a fiscal year-end basis as of March 31, 2026.

Maturity of Operating Leases

Operating Leases

Less: present value discount (152,680)

Operating lease liabilities $ 492,108

Lease costs

Short-term lease expense 268 231

(1)Primarily consists of payments for property taxes, common area maintenance and usage-based operating costs.

Weighted-average details

Weighted-average remaining lease term (years) 10 11

Weighted-average discount rate 5.5 % 5.4 %

Supplemental cash flow information related to leases:

Operating cash flows:

Non-cash activity:

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Note 17 — Commitments and Contingencies

The Company has been named in various legal actions arising in the normal course of business. In the opinion of the Company, in consultation with legal counsel, the final resolutions of these matters are not expected to have a material adverse effect on the Company’s financial condition, operations and cash flows.

The Company provides routine indemnifications relating to certain real estate (office) lease agreements under which it may be required to indemnify property owners for claims and other liabilities arising from the Company’s use of the applicable premises. In addition, the Company guarantees the performance of its subsidiaries under certain office lease agreements. The terms of these obligations vary, and because a maximum obligation is not explicitly stated, the Company has determined that it is not possible to make an estimate of the maximum amount that it could be obligated to pay under such contracts. Based on historical experience and evaluation of specific indemnities, management believes that judgments, if any, against the Company related to such matters are not likely to have a material effect on the consolidated financial statements. Accordingly, the Company has not recorded any liability for these obligations as of March 31, 2026 or March 31, 2025.

Note 18 — Segment and Geographical Information

The Company’s reportable segments, described in Note 1, were identified based on several primary factors, including: each segment operates under independent management, offers distinct services, and requires specialized expertise for service delivery. Revenues by segment represent fees earned on the various services offered within each segment. 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. 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. The balance of our operating expenses (non-compensation expense) includes costs for travel, meals and entertainment, rent, depreciation and amortization, information technology and communications, professional fees, and other operating expenses.

Segment profit consists of segment revenues, less (1) direct expenses including employee compensation and benefits, travel, meals and entertainment, professional fees, and bad debt and (2) expenses allocated by headcount such as communications, rent, depreciation and amortization, and office expense. The corporate expense category includes 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.

The following tables present information about revenues, profit and assets by segment and geography. The Company's Chief Operating Decision Maker ("CODM") is its Chief Executive Officer. The CODM oversees the performance of the Company's three reportable segments by analyzing their financial metrics, including revenues by segment and segment profit. The financial metrics the CODM regularly receives does not include asset information and the CODM does not use segment asset information to assess performance or allocate resources.

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Year Ended March 31,

Revenues by segment

Employee compensation and benefits by segment (1)

Non-compensation expense by segment

Segment profit

Assets by segment

Year Ended March 31,

Revenues by geography:

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HOULIHAN LOKEY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(In thousands, except share data or as otherwise stated)

Assets by geography

Note 19 — Redeemable Noncontrolling Interest

In February 2026, the Company closed the Audere Partners transaction, resulting in a controlling interest in the France-based entity. The remaining noncontrolling interest is subject to a series of put and call option redemption features, which may be exercised to acquire the remaining non-controlling interest over a period of approximately three years.

The following table presents the changes in the Company’s redeemable noncontrolling interest for the year ended March 31, 2026.

Balance as of April 1, 2025 $ —

Redeemable noncontrolling interest acquired 98,846

Net income (loss) attributable to noncontrolling interest (1,523)

Change in redemption value of redeemable noncontrolling interest 13,231

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2026.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness, as of March 31, 2026, of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013). Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of March 31, 2026.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

The Company’s independent registered public accounting firm, KPMG LLP, has issued an audit report on the Company’s internal control over financial reporting. This report appears on page 36 of this report.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control over financial reporting performed during the fiscal quarter ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

During the fiscal quarter ended March 31, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408 of Regulation S-K).

HLI US Equity

HLI · 10-K · period ended 2026-03-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A.Quantitative and Qualitative Disclosures about Market Risk

Item 8.Financial Statements

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

HLI US Equity☆

HLI · 10-K · period ended 2026-03-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A.Quantitative and Qualitative Disclosures about Market Risk

Item 8.Financial Statements

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

HLI US Equity