Cash conversion remains highly efficient with OCF/NI ratios frequently exceeding 2.5x, though free cash flow margins exhibit significant volatility, ranging from -23.9% to 51.6% due to the timing of success fees.
| Metric | Mar'26 | Mar'25 | Mar'24 | Mar'23 | Mar'22 | Mar'21 | Mar'20 | Mar'19 | Mar'18 | Mar'17 | Mar'16 | Mar'15 | Mar'14 | Mar'13 |
|---|
| Cash from Operations | 704.13M | 848.61M | 328.46M | 136.27M | 736.6M | 579.84M | 287.67M | 224.27M | 250.65M | 229.26M | 13.52M | 196.51M | 165.01M | 128.44M |
| Operating CF Margin % | 26.9% | 35.52% | 17.16% | 7.53% | 32.45% | 38.01% | 24.81% | 20.68% | 26.02% | 26.29% | 1.95% | 28.86% | 27.85% | 24.69% |
| Operating CF Growth % | -17.03% | 158.36% | 141.03% | -81.5% | 27.04% | 101.56% | 28.27% | -10.52% | 9.33% | 1595.87% | -93.12% | 19.09% | 28.47% | - |
| Net Income | 424.17M | 399.71M | 280.3M | 254.22M | 437.75M | 312.77M | 183.79M | 159.11M | 172.28M | 108.34M | 69.77M | 79.94M | 61.43M | 58.97M |
| Depreciation & Amortization | 42.63M | 41.27M | 28.54M | 58.22M | 48.54M | 15.23M | 17.29M | 14.47M | 7.91M | 8.85M | 7.5M | 5.51M | 6.04M | 5.36M |
| Stock-Based Compensation | 201.3M | 168.44M | 166.59M | 156.94M | 91.88M | 62.42M | 64.34M | 56.56M | 47.11M | 39.36M | 35.06M | 23.2M | 22.48M | 23.96M |
| Deferred Taxes | -25.12M | -957K | 20.47M | -3.45M | 0 | -21.24M | -9.65M | -10.69M | -6.57M | -6.09M | -4.17M | -7.36M | -7.18M | 0 |
| Other Non-Cash Items | 63.21M | 44.07M | 28.92M | 38.85M | -23.94M | 30.43M | 28.23M | 569K | 447K | 4.01M | 2.54M | 2.76M | 2.46M | 33.17M |
| Working Capital Changes | -2.07M | 196.07M | -196.37M | -368.51M | 182.38M | 180.23M | 3.66M | 4.25M | 29.47M | 74.8M | -97.18M | 92.46M | 79.78M | 6.97M |
| Change in Receivables | -82.52M | -21.93M | -23.83M | -37.74M | 32.16M | -111.49M | -13.39M | 21.61M | -18.2M | -5.53M | -1.39M | -8.53M | -20.34M | -13.91M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 39.26M | -26.53M | 44.7M | 56.65M | -84.31M | 100.22M | 93.66M | 0 |
| Change in Payables | -27.9M | -13.37M | -23.19M | -32.01M | -9.96M | 535K | -8.71M | 11.54M | 392K | 13.5M | -13.96M | 3.08M | 4.74M | 0 |
| Cash from Investing | 2.18M | -265.06M | -70.41M | -3M | -273.91M | -99.75M | -33.14M | 6.46M | -218.58M | -1.65M | 179.55M | -213.46M | -121.98M | -120.09M |
| Capital Expenditures | -22.31M | -39.7M | -66.73M | -50.73M | -8.68M | -14.15M | -20.72M | -6.73M | -7.72M | -14.42M | -9.38M | -4.67M | -2.24M | -6.84M |
| CapEx % of Revenue | 0.85% | 1.66% | 3.49% | 2.8% | 0.38% | 0.93% | 1.79% | 0.62% | 0.8% | 1.65% | 1.35% | 0.69% | 0.38% | 1.31% |
| Acquisitions | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Investments | 170.27M | 195.62M | 38.01M | 37.31M | 109.14M | 208.62M | 135.39M | 125.26M | 209.32M | 0 | 0 | 12.67M | 14.25M | 0 |
| Other Investing | 0 | 0 | 0 | 0 | 0 | 0 | -170K | 101K | 1.16M | 16.5M | 225.79M | -203.62M | -110.65M | -102.86M |
| Cash from Financing | -492.94M | -329.07M | -250.59M | -240.46M | -459.06M | -26.82M | -152.14M | -236.14M | -225.31M | 102.92M | -116.01M | -1.53M | -3.26M | -66.03M |
| Debt Issued (Net) | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Equity Issued (Net) | -175.43M | -52.51M | -24.95M | -48.66M | -304.79M | 86.84M | -29.64M | -69.56M | 75.42M | 193.56M | 0 | 0 | 0 | 0 |
| Dividends Paid | -174.04M | -165.22M | -148.45M | -140.38M | -114.81M | -92.01M | -80.66M | -66.93M | -52.08M | -55.29M | -114.3M | -2.17M | -1.07M | -62.37M |
| Share Repurchases | -175.43M | -52.51M | -24.95M | -48.66M | -304.79M | -102.22M | -29.64M | -69.56M | -18.07M | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -143.48M | -111.34M | -77.18M | -48.39M | -39.18M | -17.48M | -31.11M | -97.18M | -229.55M | 5.91M | 1.34M | 635K | -2.19M | -3.65M |
| Net Change in Cash | 218.29M | 253.72M | 7.04M | -119.26M | -13.15M | 466.48M | 94.63M | -14.11M | -192.46M | 326.52M | 77.51M | -20.76M | 41.03M | -58.84M |
| Free Cash Flow | 681.82M | 808.91M | 261.73M | 85.54M | 727.92M | 565.69M | 266.95M | 217.55M | 242.93M | 214.84M | 4.13M | 191.84M | 162.77M | 121.6M |
| FCF Margin % | 26.05% | 33.85% | 13.67% | 4.73% | 32.07% | 37.08% | 23.03% | 20.06% | 25.22% | 24.64% | 0.6% | 28.18% | 27.47% | 23.37% |
| FCF Growth % | -15.71% | 209.07% | 205.96% | -88.25% | 28.68% | 111.91% | 22.71% | -10.45% | 13.07% | 5096.93% | -97.84% | 17.86% | 33.85% | - |
| FCF per Share | 9.96 | 11.78 | 3.84 | 1.27 | 10.66 | 8.24 | 4.06 | 3.30 | 3.66 | 3.23 | 0.07 | 3.17 | 2.69 | 2.07 |
| FCF Conversion (FCF/Net Income) | 1.65x | 2.12x | 1.17x | 0.54x | 1.68x | 1.85x | 1.57x | 1.41x | 1.45x | 2.12x | 0.19x | 2.46x | 2.69x | 2.18x |
| Interest Paid | 0 | 1.36M | 579K | 5.9M | 1M | 989K | 1.05M | 977K | 656K | 1.62M | 1.31M | 0 | 137K | 0 |
| Taxes Paid | 187.25M | 93.31M | 105.06M | 156.79M | 242.03M | 44.2M | 73.88M | 80.84M | 47.63M | 57.29M | 75.36M | 0 | 1.57M | 0 |
Working capital timing volatility
As reported in financial statements, HLI exhibits a significant divergence between net income and operating cash flow, with OCF/NI ratios frequently exceeding 2.5x, suggesting that reported earnings significantly understate the firm's actual cash-generating capacity during periods of successful mandate completion and subsequent fee collection.
The consistent premium of operating cash flow over net income highlights the impact of non-cash charges and the timing of success-fee recognition. Investors should interpret this as a sign of high-quality earnings, though the volatility in this ratio warrants caution regarding the predictability of cash inflows.
Based on HLI's reported figures, free cash flow margins demonstrate extreme quarterly variance, swinging from a negative 23.9% in 2026Q1 to a peak of 51.6% in 2025Q4, reflecting the lumpy nature of advisory success fees and the inherent timing risks associated with large-scale transaction closures.
While the firm maintains a strong long-term cash generation profile, the quarterly fluctuations suggest that FCF is not a reliable metric for short-term performance assessment. The firm's ability to maintain positive FCF over the trailing period indicates that its underlying business model remains fundamentally cash-generative despite these timing-related distortions.
According to recent SEC filings, working capital changes are the primary driver of cash flow volatility, with a massive $313.6 million outflow in 2026Q1 followed by a $149.7 million inflow in 2026Q4, illustrating the sensitivity of HLI's liquidity to the timing of court-approved restructuring fee payments.
These swings are characteristic of a firm heavily reliant on success-based billing where the collection cycle is dictated by external legal and regulatory processes. This suggests that liquidity management is a critical operational competency, as the firm must bridge significant gaps between service delivery and final cash realization.
Based on the provided data, HLI consistently utilizes its cash flow to fund dividends and share repurchases, with quarterly buybacks reaching $87.9 million in 2026Q3, signaling management's commitment to returning excess capital to shareholders while maintaining a conservative balance sheet with minimal debt.
The firm's capital deployment strategy appears balanced, prioritizing shareholder returns while retaining sufficient liquidity for bolt-on acquisitions. This approach suggests a mature management team that avoids over-leveraging the balance sheet, even during periods of high cash accumulation.
As indicated by the quarterly data, stock-based compensation remains a persistent non-cash expense, averaging over $45 million per quarter, which effectively masks the true economic cost of talent retention and necessitates careful adjustment when evaluating the firm's sustainable free cash flow generation.
While SBC is a standard tool for aligning MD interests, its magnitude relative to net income suggests that the firm's reported profitability may be inflated by the exclusion of these equity-based costs. Investors should monitor whether the rising trend in SBC continues to outpace revenue growth, as this could signal future dilution and margin pressure.
Quick answers to the most common questions about buying HLI stock.
Houlihan Lokey, Inc. (HLI) generated $704.1M in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
Houlihan Lokey, Inc. (HLI) generated $681.8M in free cash flow in 2026. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Houlihan Lokey, Inc. (HLI) spent $22.3M on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2026, Houlihan Lokey, Inc. (HLI) returned $174.0M to shareholders via cash dividends and spent $175.4M on share repurchases. This shows the company's commitment to returning capital to its equity investors.