The firm has maintained operating margins consistently above 18% over the last ten quarters, peaking at 24.9% in 2026Q3 despite aggressive global headcount expansion.
| 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 |
|---|
| Sales/Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Revenue Growth % | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Cost of Goods Sold | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| COGS % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Gross Profit | 2.57B | 919.92M | 737.05M | 696.64M | 861.32M | 554.26M | 421.61M | 392.31M | 326.73M | 289.85M | 232.16M | 205.77M | 177.53M | 520.28M |
| Gross Margin % | 98.37% | 38.5% | 38.5% | 38.5% | 37.94% | 36.33% | 36.37% | 36.18% | 33.92% | 33.24% | 33.46% | 30.22% | 29.97% | 100% |
| Gross Profit Growth % | 179.9% | 24.81% | 5.8% | -19.12% | 55.4% | 31.46% | 7.47% | 20.07% | 12.73% | 24.85% | 12.82% | 15.91% | -65.88% | - |
| Operating Expenses | 1.96B | 418.38M | 374.19M | 354.9M | 248.46M | 146.1M | 192M | 173.22M | 112.32M | 107.85M | 105.76M | 77.12M | 74.68M | 423.81M |
| OpEx % of Revenue | 74.74% | 17.51% | 19.55% | 19.61% | 10.95% | 9.58% | 16.56% | 15.97% | 11.66% | 12.37% | 15.24% | 11.33% | 12.61% | 81.46% |
| Selling, General & Admin | 0 | 188.48M | 185.32M | 142.9M | 127.81M | 95.56M | 93.3M | 83.22M | 64.16M | 57.8M | 63.16M | 43.83M | 38.06M | 372.55M |
| SG&A % of Revenue | - | 7.89% | 9.68% | 7.9% | 5.63% | 6.26% | 8.05% | 7.67% | 6.66% | 6.63% | 9.1% | 6.44% | 6.42% | 71.61% |
| Research & Development | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Operating Income | 618.53M | 501.54M | 362.86M | 341.74M | 612.86M | 408.16M | 229.6M | 219.1M | 214.41M | 182M | 126.4M | 128.65M | 102.85M | 95.39M |
| Operating Margin % | 23.63% | 20.99% | 18.95% | 18.89% | 27% | 26.76% | 19.8% | 20.2% | 22.26% | 20.87% | 18.22% | 18.9% | 17.36% | 18.33% |
| Operating Income Growth % | 23.33% | 38.22% | 6.18% | -44.24% | 50.15% | 77.77% | 4.79% | 2.18% | 17.81% | 43.98% | -1.75% | 25.09% | 7.81% | - |
| EBITDA | 661.17M | 542.81M | 391.4M | 399.96M | 661.4M | 423.38M | 246.89M | 233.57M | 222.32M | 190.85M | 133.9M | 134.16M | 108.89M | 100.76M |
| EBITDA Margin % | 25.26% | 22.72% | 20.44% | 22.1% | 29.14% | 27.75% | 21.3% | 21.54% | 23.08% | 21.88% | 19.3% | 19.7% | 18.38% | 19.37% |
| EBITDA Growth % | 21.8% | 38.69% | -2.14% | -39.53% | 56.22% | 71.49% | 5.7% | 5.06% | 16.49% | 42.53% | -0.2% | 23.21% | 8.07% | - |
| D&A (Non-Cash Add-back) | 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 |
| EBIT | 562.26M | 556.32M | 399.1M | 376.81M | 612.86M | 408.16M | 229.6M | 219.1M | 214.41M | 182M | 126.4M | 128.65M | 102.85M | 0 |
| Net Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 4.21M | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 4.21M | 0 | 1.84M |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Pretax Income | 562.26M | 531.34M | 390.54M | 324M | 603.94M | 409.23M | 235.65M | 224.32M | 217.84M | 178.49M | 125.63M | 132.13M | 105.33M | 98.31M |
| Pretax Margin % | 21.48% | 22.24% | 20.4% | 17.91% | 26.61% | 26.83% | 20.33% | 20.69% | 22.61% | 20.47% | 18.11% | 19.41% | 17.78% | 18.9% |
| Income Tax | 138.09M | 131.62M | 110.24M | 69.78M | 165.61M | 96.46M | 51.85M | 65.21M | 45.55M | 70.14M | 55.86M | 52.2M | 43.9M | 39.38M |
| Effective Tax Rate % | 24.56% | 24.77% | 28.23% | 21.54% | 27.42% | 23.57% | 22% | 29.07% | 20.91% | 39.3% | 44.47% | 39.5% | 41.68% | 40.06% |
| Net Income | 425.7M | 399.71M | 280.3M | 254.22M | 437.75M | 312.77M | 183.79M | 159.11M | 172.28M | 108.34M | 69.74M | 79.88M | 61.32M | 58.97M |
| Net Margin % | 16.26% | 16.73% | 14.64% | 14.05% | 19.28% | 20.5% | 15.85% | 14.67% | 17.88% | 12.42% | 10.05% | 11.73% | 10.35% | 11.33% |
| Net Income Growth % | 6.5% | 42.6% | 10.26% | -41.93% | 39.96% | 70.18% | 15.52% | -7.65% | 59.02% | 55.35% | -12.69% | 30.27% | 3.98% | - |
| Net Income (Continuing) | 424.17M | 399.71M | 280.3M | 254.22M | 438.32M | 312.77M | 183.79M | 159.11M | 172.28M | 108.34M | 69.77M | 79.94M | 61.43M | 58.97M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 110.55M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3.84M | 2.4M | 3.19M | 3M | 1.64M |
| EPS (Diluted) | 6.22 | 5.82 | 4.11 | 3.76 | 6.41 | 4.55 | 2.80 | 2.42 | 2.60 | 1.63 | 1.10 | 1.32 | 1.01 | 1.00 |
| EPS Growth % | 6.87% | 41.61% | 9.31% | -41.34% | 40.88% | 62.5% | 15.7% | -6.92% | 59.51% | 48.18% | -16.67% | 30.69% | 1% | - |
| EPS (Basic) | 6.40 | 6.08 | 4.36 | 4.01 | 6.74 | 4.75 | 2.96 | 2.42 | 2.60 | 1.77 | 1.18 | 1.32 | 1.01 | 1.00 |
| Diluted Shares Outstanding | 68.43M | 68.66M | 68.16M | 67.59M | 68.26M | 68.67M | 65.73M | 65.85M | 66.32M | 66.58M | 63.48M | 60.46M | 60.46M | 58.79M |
| Basic Shares Outstanding | 66.55M | 65.72M | 64.34M | 63.36M | 64.97M | 65.79M | 62.15M | 65.75M | 66.26M | 61.1M | 59.04M | 60.06M | 58.4M | 58.79M |
| Dividend Payout Ratio | 40.88% | 41.33% | 52.96% | 55.22% | 26.23% | 29.42% | 43.88% | 42.07% | 30.23% | 51.04% | 163.89% | 2.71% | 1.75% | 105.77% |
Compensation ratio margin compression
As evidenced by the quarterly progression from $511.1 million in 2024Q3 to $635.6 million in 2026Q4, Houlihan Lokey has demonstrated a consistent ability to expand its top-line revenue despite the inherent cyclicality of the investment banking industry and fluctuating global capital market conditions.
The firm's revenue trajectory suggests a successful integration of its diversified advisory model, which balances transactional M&A with counter-cyclical restructuring mandates. This growth appears durable, as the firm captures fees across different economic environments, effectively mitigating the volatility typically associated with pure-play M&A advisory firms.
Based on reported financial statements, Houlihan Lokey has maintained operating margins consistently above 18% over the last ten quarters, peaking at 24.9% in 2026Q3, which highlights the firm's ability to preserve profitability even as it scales its global headcount and expands into new international markets.
The stability of these margins suggests that the firm possesses significant pricing power and effective cost management, particularly regarding its variable compensation structure. Investors should monitor whether the firm can sustain these levels if competitive pressures for talent continue to intensify across the mid-market advisory landscape.
According to recent SEC filings, Houlihan Lokey consistently utilizes stock-based compensation, with figures reaching as high as $60.9 million in 2026Q3, which serves as a critical non-cash expense that investors must adjust for to accurately assess the firm's true underlying cash-generating capacity and operational efficiency.
While this compensation strategy is essential for aligning the interests of managing directors with long-term firm performance, it creates a persistent wedge between GAAP net income and cash earnings. The reliance on equity-based incentives warrants further investigation into potential dilution risks and the long-term impact on shareholder value creation.
Based on the reported data, the primary challenge to the current narrative is the potential for structural margin compression, as the compensation-to-revenue ratio remains highly sensitive to talent wars and the firm's ongoing aggressive expansion into lower-margin international markets and diverse regulatory environments.
Short-term fluctuations in operating income, such as the dip to 14.8% in 2026Q1, suggest that the firm's profitability is not immune to operational inefficiencies or integration costs. If the firm fails to maintain its historical compensation discipline, the market may be forced to re-evaluate the premium multiple currently assigned to its earnings.
Quick answers to the most common questions about buying HLI stock.
Houlihan Lokey, Inc. (HLI) is profitable, generating $425.7M in net income for the fiscal year ending 2026 with a net profit margin of 16.3%.
Houlihan Lokey, Inc. (HLI) reported an operating income of $618.5M, resulting in an operating profit margin of 23.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Houlihan Lokey, Inc. (HLI) generated $2.57B in gross profit for the year, representing a gross profit margin of 98.4%. This demonstrates the company's core pricing power and production efficiency.