Houlihan Lokey, Inc. (HLI): BCG Matrix [Dec-2025 Updated]

You're looking at Houlihan Lokey, Inc. (HLI)'s business health as of late 2025, and the picture is clear: the engine is the Corporate Finance group, which drove a massive 64% of revenue with an impressive 38% growth, making it the clear Star in this portfolio. Meanwhile, the rock-solid Financial Restructuring practice acts as the reliable Cash Cow, bringing in a steady 23% of revenue counter-cyclically. But where should you focus your attention next? We break down the high-potential Question Marks in Valuation Advisory and the low-yield Dogs that are just taking up space, giving you the strategic map you need right now to understand where HLI is investing for tomorrow.

Background of Houlihan Lokey, Inc. (HLI)

You're looking at Houlihan Lokey, Inc. (HLI), which is a premier global financial advisory firm. Honestly, they don't do the big underwriting stuff like some bulge-bracket banks; instead, they focus on specialized advisory services across the world. HLI operates through three main business segments: Corporate Finance (CF), Financial Restructuring (FR), and Financial and Valuation Advisory (FVA).

The firm has established itself as a market leader in its core areas. For instance, looking at calendar year 2024 data, Houlihan Lokey ranked No. 1 globally in M&A deals, closing 415 of them, and also No. 1 in distressed debt and bankruptcy restructuring deals with 88 transactions. This leadership is built on a long history, including advising on 1,243 M&A fairness opinions between 2000 and 2024.

Fiscal year 2025, which concluded on March 31, 2025, was a record year for the company. You saw total revenues hit $2.39 billion, marking a 25% increase over the $1.91 billion generated in fiscal year 2024. This strong top-line performance translated to the bottom line, with net income reaching $400 million, up from $280 million the prior year.

When we break down that record fiscal year 2025 performance by segment, the Corporate Finance group was a major driver, with revenues increasing by 38%. Financial and Valuation Advisory (FVA) also saw solid growth, with revenues up 11%. Financial Restructuring, which can be cyclical, still managed a 4% revenue increase for the full fiscal year.

To give you a sense of where things stood as of late 2025, the most recent reported quarter (Q2 of fiscal year 2026, ending September 30, 2025) showed revenues of $659.45 million, which was a 14.70% year-over-year increase. In that quarter, Corporate Finance brought in $438.661 million (up 21% YoY), Financial Restructuring was at $133.803 million (up 2% YoY), and FVA contributed $86.988 million (up 10% YoY). The company's business mix, based on a July 2025 presentation, showed Corporate Finance accounted for 64% of revenue, Financial Restructuring at 23%, and FVA at 13%.

The firm's commitment to shareholders was evident as they announced a 5% increase in the quarterly dividend to $0.60 per share following the strong fiscal 2025 results. You should know that Houlihan Lokey, Inc. has a deep bench, reporting 339 managing directors in 2025, and they maintain a highly diversified client base, serving over 2,000+ clients annually.

Houlihan Lokey, Inc. (HLI) - BCG Matrix: Stars

You're looking at the engine room of Houlihan Lokey, Inc. (HLI) performance right now, which is the Corporate Finance (CF) segment. This is the classic Star: high market share in a high-growth area, demanding investment to maintain that lead.

The numbers for fiscal year 2025 clearly show where the momentum is. Corporate Finance drove 64% of the total revenue for the year, which works out to approximately $1.53 billion based on the reported total revenue of around $2.39 billion for FY2025. This segment is the primary growth driver. Its revenue growth was a massive 38% in FY2025 compared to the prior fiscal year, significantly outpacing the overall market's growth trajectory. That kind of acceleration in a mature advisory business tells you they are winning market share.

This dominant growth isn't accidental; it's fueled by a strong rebound in Mergers & Acquisitions (M&A) activity and capital markets advisory, which are the core of the CF business. To be fair, this segment consumes a lot of cash to support its leadership position-hiring top talent and expanding capabilities-but the payoff is market dominance.

Here's a quick look at how the segments stacked up in FY2025, based on the latest filings:

The leadership claim in the mid-cap space is backed up by transaction volume data from the first half of 2025. Houlihan Lokey led the pack in the global mid-cap M&A advisory space by the sheer number of deals closed. This is what keeps the Star burning bright.

Consider these key metrics that define the Star status:

• Led global M&A advisory by volume in H1 2025.
• Advised on 128 deals in H1 2025 to secure volume leadership.
• CF segment revenue growth hit 38% for FY2025.
• Total FY2025 revenue reached approximately $2.4 billion.
• Revenue per Managing Director (MD) was $7.0 million in FY2025.

If Houlihan Lokey can sustain this success as M&A markets eventually normalize from this high-growth phase, this segment is definitely on track to become a Cash Cow. Finance: draft 13-week cash view by Friday.

Houlihan Lokey, Inc. (HLI) - BCG Matrix: Cash Cows

You're analyzing the core stability of Houlihan Lokey, Inc. (HLI), and the Financial Restructuring (FR) segment is definitely where you see that bedrock. This division is the undisputed market leader, ranked No. 1 globally in Global Restructuring Advisor rankings based on 88 deals closed in 2024. That kind of market dominance in a mature, cyclical area is exactly what defines a Cash Cow for the firm.

This segment provides stable, counter-cyclical revenue, contributing exactly 23% of the total firm revenue for the last twelve months ended June 30, 2025. For the full fiscal year ended March 31, 2025, total revenues hit $2.39 billion, and the FR segment growth was a modest 4% compared to the prior year, indicating low market growth relative to the M&A advisory side. It's a reliable cash generator, requiring less aggressive investment to maintain its leading position.

Here's a quick look at how the segments stacked up in terms of revenue contribution and growth for the fiscal year ended March 31, 2025, compared to the previous year:

Because the FR practice is the largest worldwide, it generates reliable cash flow while demanding lower promotional spending. The productivity here is excellent; the segment maintains the highest revenue per managing director at $9.5 million for the last twelve months ended June 30, 2024. You use this cash to fund the riskier Question Marks and maintain the Stars, so keeping this engine running efficiently is key.

The core characteristics of this Cash Cow segment are clear:

• Market share is high, ranking No. 1 globally.
• Revenue contribution is a steady 23% of the total.
• Market growth is low, evidenced by the 4% revenue increase in FY2025.
• It produces significant cash flow, reflected in $9.5 million revenue per MD.
• Investments focus on infrastructure to boost efficiency, not aggressive market capture.

Finance: draft the 13-week cash view incorporating FR segment projections by Friday.

Houlihan Lokey, Inc. (HLI) - BCG Matrix: Dogs

You're looking at the parts of Houlihan Lokey, Inc. that aren't pulling their weight in terms of market share or growth, even in a strong year. These are the units where the capital tied up might be better deployed elsewhere. For fiscal year 2025, the firm posted a solid GAAP net income of $400 million, but the Dogs quadrant represents the areas that don't materially contribute to that figure.

The concept here is that these units operate in markets that aren't expanding quickly, or Houlihan Lokey, Inc. has failed to capture significant share within them. Expensive turn-around plans for these areas rarely pay off; the better move is usually to minimize exposure or divest.

The Financial and Valuation Advisory (FVA) segment, which generated $318.2 million in revenue for fiscal year 2025, is where we look for these candidates. While FVA revenue grew by 11% year-over-year, this growth trailed the firm's total revenue growth of 25% for the same period, suggesting a relative drag in a high-growth environment.

Here's how the segment growth rates for fiscal year 2025 compare, giving you context for where the slower-growth areas might reside:

The FVA segment itself contains the likely Dogs, specifically non-strategic, commoditized sub-services. These are the offerings that have become more transactional and less reliant on Houlihan Lokey, Inc.'s premium intellectual capital.

Routine, low-margin valuation work that lacks the high-growth potential of specialized advisory falls squarely here. These are the necessary table stakes for client coverage but don't drive the high returns seen elsewhere. Think about the following FVA service lines as potential candidates for the Dog classification, depending on their specific margin profile and market growth:

• Portfolio Valuation and Fund Advisory for commoditized assets.
• Standardized Corporate Valuation Advisory Services for tax reporting.
• Transaction Opinions on routine, non-complex deals.
• Dispute Resolution Consulting outside of major litigation.

Also, consider certain legacy or smaller geographic offices with limited scale. These locations might be maintained primarily for historical client relationships or to support larger mandates elsewhere, but their revenue per managing director is low. They consume management attention and overhead without materially contributing to the $400 million net income achieved in fiscal year 2025. If an office's annual revenue contribution is less than $20 million, for example, and its growth is flat, it fits the Dog profile perfectly.

These areas are necessary for client coverage, but they are cash traps if they require more than minimal maintenance. The focus should be on streamlining operations or finding a buyer for these specific, lower-return practices.

Houlihan Lokey, Inc. (HLI) - BCG Matrix: Question Marks

You're looking at the Financial and Valuation Advisory (FVA) segment of Houlihan Lokey, Inc. (HLI) and seeing a classic Question Mark profile: high growth potential but still a relatively small piece of the overall revenue pie. Honestly, it's where the future growth engine might be forged, but it demands serious capital right now.

Financial and Valuation Advisory (FVA) is currently the smallest segment, representing only 13% of total revenue for Houlihan Lokey, Inc.. For the fiscal year ended March 31, 2025, the firm posted total revenues of $2.39 billion. That 13% share means FVA contributed roughly $310.57 million to the top line, though the reported quarterly figures show significant momentum, which is what makes this a Question Mark.

The segment revenue grew a solid 11% in FY2025 when compared to the prior fiscal year, showing high potential in a market that's definitely recovering. This growth suggests buyers are starting to discover the value in these specialized services, but the low market share means it's still burning cash relative to its size.

Here's a quick look at how the FVA segment's revenue has been trending in the latter half of FY2025, showing that high-growth environment:

To turn this potential into a Star, Houlihan Lokey, Inc. requires continued, heavy investment in new managing directors and technology to gain market share. You can see the firm is already investing, with 347 managing directors across the firm as of July 2025, but the FVA group needs its own dedicated infusion to outpace competitors in its niche.

This segment includes high-growth, niche areas like Capital Solutions and complex financial reporting advisory. These are the areas where the market is expanding rapidly, but Houlihan Lokey, Inc. hasn't yet captured a dominant share. You need to decide where to place your bets.

The strategic imperative for Question Marks like FVA is clear:

• Invest Heavily: Fund the hiring of specialized talent, particularly in areas like Capital Solutions.
• Technology Spend: Deploy capital into tech platforms that can scale advisory services efficiently.
• Market Adoption: Drive marketing and business development to get buyers to discover these specific offerings quickly.
• Risk of Dog Status: If market share doesn't increase rapidly, this segment will continue to consume cash without delivering Star-level returns.

If onboarding new senior talent takes longer than two quarters, market momentum could definitely stall. Finance: draft the 13-week cash view for the FVA hiring plan by Friday.