Houlihan Lokey, Inc. · NYSE:HLI
Houlihan Lokey — Q1 2025 Earnings Presentation
33 slides from Houlihan Lokey's earnings presentation, Jul 30, 2024
Slide 1: Investor Presentation
Investor July 2024 Presentation
Slide 2: Disclaimers
Disclaimers Forward-Looking Information This presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation may be forward-looking statements. The words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “in
Slide 3: Our Culture
Our Culture Employee Firm’s Ownership DNA DNA and Controls → Analytically driven → Partnership culture → Broad-based, long-term employee ownership → Client service and solution driven → Not a “star” culture → Sophisticated corporate procedures and financial systems → Entrepreneurially motivated → Co
Slide 4: Our Product Knowledge and Industry Expertise
CORE SERVICES Corporate Finance Financial Restructuring Financial and Valuation Advisory Our Product Knowledge and DEDICATED INDUSTRY GROUPS Industry Expertise Deliver Superior Business Services Financial Services Industrials Results Consumer FinTech Real Estate Energy Healthcare Technology KEY FACT
Slide 5: Investment Tenets
Investment Strong Track Record of Growth and Lower Revenues and Earnings Volatility Through Strong Growth Tenets Profitability Economic Cycles Prospects Strong and consistent financial Given our diversified business model, HL has significant room to grow performance since going public. focus on mid-
Slide 6: Strong Financial Performance
Strong Financial Performance Corporate Finance $2,270 Revenues Financial Restructuring $1,914 13% $1,809 Financial and Valuation Advisory $1,525 17% 15% 16% $1,159 12% 27% $1,084 22% 15% 14% 35% Strong revenue growth with a five-year 29% 30% 70% CAGR of 12% 62% 58% 56% 53% 56% 2019 2020 2021 2022 20
Slide 7: Strong Partnership Culture with Experienced Leadership
Strong Partnership Culture with Experienced Leadership Deep and Experienced Executive Management Team Long Tenure Results in Collaborative Culture Scott J. Adelson Irwin N. Gold 1 Tenured Management Over 35-year average tenure of our Executive Management Team and over 27-year average tenure of our 1
Slide 8: A Culture of Caring
A Culture of Caring HL has a matching charitable contribution program for active employees, which results in a number of donations to causes around the globe, and a give-a-day program that results in significant participation by our employees in programs local to our offices. Listed below are severa
Slide 9: Market Leader in All Three Business Segments
Market Leader in All Three Business Segments Top Global M&A Firm1 Top Global Restructuring Firm Top Global Fairness Opinion Firm Investment Banks by Number of Global CY 2023 Global Distressed Debt and Global M&A Fairness Advisors: Announced or M&A Deals in CY 2023 Bankruptcy Restructuring Deals Comp
Slide 10: No.1 Global Market-Leading Advisor Across Industries
No.1 Business Services HOULIHAN LOKEY Rothschild & Co 63 Consumer1 HOULIHAN LOKEY Rothschild & Co 50 Financial Services1 HOULIHAN LOKEY Rothschild & Co 41 Global 46 48 32 Market-Leading Lincoln International Lazard Goldman Sachs & Co 32 32 29 Advisor Across Clearwater International Goldman Sachs & C
Slide 11: Diversified Across Geography, Client, Industry, Professional and Segment
Diversified Across Client Mix1 Geography, Client, Industry, Industry Mix1 Professional and Segment 23% 5% 13% Financial Public 46% Energy Institutions Financial Companies More than Sponsors 15% 12% 2,000+ Consumer Healthcare 19% 17% Industrials Business Services clients served annually 31% 5% 14% Pr
Slide 12: Comprehensive Coverage and Global Scale
Comprehensive Coverage and Global Scale AMERICAS Atlanta Los Angeles EUROPE AND Amsterdam Milan ASIA- Beijing Shanghai Baltimore Miami MIDDLE EAST Antwerp Munich PACIFIC Fukuoka Singapore Boston Minneapolis Dubai Paris Gurugram Sydney Charlotte New York Frankfurt Stockholm Hong Kong SAR Tokyo Chicag
Slide 13: Robust Long-Term Growth Opportunities
Robust Long-Term Growth Opportunities Growth will be driven by: CORPORATE → Adding incremental industry expertise globally We will continue to grow our FINANCE → Continued geographic expansion talent pool through: → Building out our Capital Markets and Fund Placement platforms → Increasing deal size
Slide 14: Growth Through Hiring and MD Productivity
Growth Through Hiring and MD Productivity History of Growing Managing 313 316 289 Director Headcount 190 198 198 165 169 173 146 125 115 HL has increased its Managing Director 100 107 85 88 Headcount by a CAGR of 8% over the last 65 72 75 78 62 20 years through internal promotions, opportunistic hir
Slide 15: Growth Through Recent Acquisitions
Growth Through Recent Acquisitions Consumer-Focused Continental European Investment Data and Analytics, Content, Investment Banking Firm Banking Firm Software, and Services Advisory Firm → HL has made 17 acquisitions over the last 12 years September 2015 November 2015 April 2018 → We have made acqui
Slide 16: Overview of Business Segments
Overview of Business Segments 16
Slide 17: A Houlihan Lokey Model for Growth and Success
A Houlihan Lokey Model for Growth and Success Corporate Financial Financial and Finance Restructuring Valuation Advisory HL maintains three primary service Mergers/Acquisitions Debtor and Creditor Restructuring Financial Opinions Core Services Capital Markets Advisory Distressed M&A Valuation Servic
Slide 18: Corporate Finance
Corporate Finance PRODUCT SPECIALISTS Integrated Platform combining Industry Coverage, Product Expertise, Mergers and Acquisitions Balanced and insightful mergers and acquisitions advice and Global Reach Capital Markets Comprehensive range of debt and equity capital raisings for companies, private e
Slide 19: Corporate Finance: Market-Leading Advisor Across Industries
Corporate Finance Market-Leading Advisor Across Industries1 2023 M&A Advisory Rankings 2023 M&A Advisory Rankings Global Consumer Transactions Under 2023 M&A Advisory Rankings Houlihan Lokey’s Corporate Finance All Global Business Services Transactions $1 Billion All Global Healthcare Transactions g
Slide 20: Corporate Finance Mergers & Acquisitions
Corporate Finance Mergers & Acquisitions 1% Global Closed M&A Mid-Cap Transactions CY 2023 Transactions Our market share in the Global mid-cap 44,359 43,938 space is approximately 1%, based on the Transactions Transactions number of closed Corporate Finance 1% 1% transactions we completed in CY 2023
Slide 21: Corporate Finance Capital Markets
Corporate Finance Capital Markets Private Capital → Houlihan Lokey is a market leader in placing bespoke capital in the private markets— from senior debt to equity Solutions – Access capital when traditional markets / providers are inappropriate or unreceptive We believe we have one of the largest →
Slide 22: Financial Restructuring
Financial Restructuring Top Global Restructuring Advisor 15 Largest Bankruptcies 2023 Global Distressed Debt and Bankruptcy Advisor in 12 of the 15 Largest Restructuring Rankings Bankruptcies 2000–2023 By Deal Count HOULIHAN LOKEY Deepest bench in the industry with 54 73 Assets ($B) Managing Directo
Slide 23: Financial and Valuation Advisory
Financial and Valuation Advisory No. 1 Global M&A Fairness Opinion Services → Transaction (including Solvency) Opinions → Corporate Valuation Advisory Services Offered → Portfolio Valuation and Fund Advisory → Fund Opinions Advisor Over the Past 25 Years → Transaction Advisory Services → Dispute Res
Slide 24: Financial Sponsors Group
Financial Sponsors Group Houlihan Lokey has one of the largest Broad and → HL has 30 senior officers dedicated to the sponsor community Financial Sponsors Groups focused on Deep Financial in North America, Europe, and Japan as of FYE 2024 Sponsor Group → Coverage of 1,300+ private equity firms, 300+
Slide 25: Private Equity Portfolio Company Inventory
Given our strong market Private Equity Portfolio Company Inventory share serving the PE community, HL is well Current Inventory of U.S. Private-Equity-Backed Companies (2014–2024) positioned to benefit Greater than 5 Years Old from the growing Less than 5 Years Old number of portfolio companies held
Slide 26: Financial Overview
Financial Overview 26
Slide 27: Strong Top-Line Growth and Disciplined Expense
Strong Top-Line Growth and Disciplined Expense Revenues $2,270 $1,809 $1,914 $1,525 Long history of revenue growth through $1,159 various market cycles $416 $514 → Resilient business mix consisting of cyclical and 2020 2021 2022 2023 2024 3-mo ended 3-mo ended countercyclical elements 6/30/23 6/30/2
Slide 28: Business Segment Financials
Business Segment Financials Revenues By Business Segment $2,270 Financial and Valuation Advisory Financial Restructuring 12% $1,914 Corporate Finance $1,809 35% 16% 13% $1,525 14% 22% 17% $1,159 15% 30% 29% 53% 70% $514 62% $416 13% 56% 15% 23% 56% 27% 64% 58% 2020 2021 2022 2023 2024 3-mo ended 3-m
Slide 29: Expense, Balance Sheet and Cash Management
Expense, Balance Sheet and Cash Management Operating Expenses Balance Sheet Health Shareholder Return Compensation We operate We are committed to the following with extremely low levels of debt principles: Given our diversified business model, we are able to maintain a tight compensation ratio We ma
Slide 30: Reconciliation of GAAP to Adjusted Financials
Three Months Ended June 30, 2024 (In thousands, except per share data) 2024 2023 Revenues $ 513,609 $ 415,829 Reconciliation of GAAP to Adjusted Financials Employee compensation and benefits expenses Employee compensation and benefits expenses (GAAP) $ 330,116 $ 263,483 Less: Acquisition related ret
Slide 31: Comparable GAAP vs. Adjusted Financial Figures
Comparable GAAP vs. Adjusted Financial Figures GAAP Pre-tax Income GAAP Pre-tax Margin GAAP Net Income $604 $438 26.8% 26.6% $313 $409 $391 20.7% 20.3% 20.4% $280 17.9% $254 $324 $236 $184 $224 $159 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024 Adjusted Pr
Slide 32: Our Vision and Our Mission
Our We will be recognized globally for providing the finest financial advice Our Vision Mission and service to our clients and the best place to work for our colleagues. We help our clients achieve superior outcomes by providing thoughtful, caring advice while acting with honor and integrity We are
Slide 33: HL.com
HL.com