Houlihan Lokey, Inc. (HLI): Business Model Canvas [Dec-2025 Updated]

You're looking to understand how a top-tier advisory firm navigates market ups and downs, right? Well, looking at Houlihan Lokey, Inc. (HLI)'s model reveals a masterclass in balance: they blend high-stakes M&A advisory with their industry-leading, counter-cyclical restructuring work. This strategy paid off big, hitting a record $2.39 billion in total revenue for fiscal year 2025, driven by a highly specialized, people-first cost structure where compensation eats up about 61.5% of revenue. Honestly, their ability to stay the top restructuring advisor for over a decade while growing M&A is the key to their stability. Dive below to see the nine building blocks-from their key partnerships with private equity giants to how they structure their fee streams-that make this business model tick.

Houlihan Lokey, Inc. (HLI) - Canvas Business Model: Key Partnerships

You're looking at the ecosystem that fuels Houlihan Lokey, Inc.'s deal flow-the network of firms and capital sources they rely on to execute transactions. This isn't just about who they advise; it's about who they work with to get deals done across M&A, Capital Solutions, and Restructuring.

Private equity firms and financial sponsors for deal flow

The relationship with private equity (PE) firms and financial sponsors is central to Houlihan Lokey, Inc.'s advisory volume leadership. They maintain deep coverage across this community, which is critical given the dry powder available to buyout firms. As of FYE 2024, Houlihan Lokey, Inc. covered over 1,300+ private equity firms, over 300+ credit funds, and more than 70+ family offices in North America, Europe, and Japan. This extensive network has resulted in selling over 800 companies to financial sponsors over the last five years, ending March 31, 2025. The Capital Solutions Group specifically closed 15 GP-led transactions in 2024.

The firm's position as the number one adviser by volume in global M&A for Q1-Q3 2025, with 240 deals advised, directly reflects the strength of these sponsor relationships. Their Industrials banking group forecasts that deal activity will increase by 20-25 percent in 2025, driven partly by the active buyer-to-seller ratio for quality assets. Here's a snapshot of the scale of their engagement with these partners:

Legal counsel and accounting firms as co-advisors on transactions

While specific financial data on co-advisory fees or the exact number of joint engagements with legal and accounting firms isn't public, the sheer volume of transactions necessitates these partnerships. Houlihan Lokey, Inc. advised on 240 M&A deals in the first three quarters of 2025, and closed 170 Corporate Finance transactions in Q3 2025 alone. Each of these transactions requires extensive due diligence and closing support from external legal counsel and accounting firms. The firm's Business Services Group explicitly excludes accounting firms and brokers when reporting its M&A tombstone data, indicating these firms operate in a distinct, supportive capacity rather than as primary M&A advisors in those reported figures.

Strategic acquisition targets (e.g., Prytania Solutions Ltd.) to expand capabilities

Houlihan Lokey, Inc. uses strategic acquisitions to deepen industry coverage and add service offerings, having made 19 acquisitions over the last 12 years. A recent example is the purchase of Prytania Solutions Services Limited, which closed on October 30, 2024. This London-based company specializes in structured credit and provides automated valuation services to financial institutions. The Technology Group's expansion, including hires focused on AI-driven software and digital infrastructure, also reflects this partnership strategy through inorganic growth to enhance capabilities.

Global financial institutions for capital markets distribution

For capital markets distribution, Houlihan Lokey, Inc.'s Capital Solutions Group leverages its deep relationships to raise capital across private and public markets. The group raised $28B across approximately 120 transactions in the Last Twelve Months (LTM) ending June 30, 2025. This group's capabilities include advising on IPOs, Follow-Ons, and Monetization Alternatives, which inherently involves distribution partnerships with global financial institutions that underwrite and place securities. The firm's CEO noted that the M&A landscape rebounded in 2025, driven by strategic buyers and stable interest rates, which supports robust capital markets activity.

Debt and equity providers in complex capital solutions

The firm's Capital Solutions Group is a direct interface with debt and equity providers, offering tailored financing alternatives. This group has over 170 professionals globally across 14 offices in 6 countries as of mid-2025. In the European mid-market alone, debt funds executed 54 new financing deals in Q3 2025, accounting for 40 percent of activity in that segment. These debt funds maintain a leading market position, financing 68 percent of deals in the UK and 79 percent in Benelux year-to-date in Q3 2025. The solutions provided range from ABLs/FILOs to Growth Equity placements and GP Stakes financings.

You can see the activity breakdown in the European unitranche market, which is heavily reliant on these debt providers:

• 135 unitranche deals closed in European mid-cap sponsored transactions in Q3 2025.
• The year-to-date total for European unitranche deals reached 394 transactions as of Q3 2025, a 17 percent year-on-year increase.
• Add-on acquisitions accounted for 45 deals (34 percent) in the European unitranche market during Q3 2025.

Finance: draft 13-week cash view by Friday.

Houlihan Lokey, Inc. (HLI) - Canvas Business Model: Key Activities

You're looking at the core engine of Houlihan Lokey, Inc. (HLI), the activities that drive their revenue and maintain their market standing as of late 2025. It's about execution, specialization, and talent density.

Executing complex M&A and capital markets transactions

This activity centers on the Corporate Finance (CF) segment, which is the largest revenue contributor. The momentum in M&A advisory has been strong, evidenced by the firm leading in deal volume globally for a significant period of 2025.

For the fiscal year ended March 31, 2025, the CF segment saw revenues increase by 38% year-over-year. For the fourth quarter ended March 31, 2025, CF revenues were $413 million, a 44% increase from the prior year's fourth quarter.

The deal volume statistics show Houlihan Lokey, Inc. as a consistent leader in transaction count:

• Advised on 240 M&A deals globally through the first three quarters of 2025.
• Led North American M&A volume with 93 deals advised in the first half of 2025.
• Advised on 33 transactions in the financial services sector M&A during Q1-Q3 2025.

The overall firm revenue for the fiscal year ended March 31, 2025, hit a record of $2.39 billion, up 25% from the prior year.

Providing Financial Restructuring and distressed M&A advisory

The Financial Restructuring (FR) segment is a bedrock activity, advising on complex restructurings and liability management transactions worldwide. This segment reported revenues of $165 million for the fourth quarter ended March 31, 2025, representing a 6% increase year-over-year, and a 4% increase for the full fiscal year 2025.

The firm's Capital Solutions Group (CSG), which falls under this broader advisory area, showed significant activity in private capital solutions in the preceding year, advising on $23 billion across 115 transactions in 2024.

Delivering independent Financial and Valuation Advisory (FVA) services

The Financial and Valuation Advisory (FVA) group is one of the largest valuation practices in the United States. FVA revenues for the fourth quarter ended March 31, 2025, were $89 million, up 15% year-over-year, contributing to an 11% revenue increase for the full fiscal year 2025.

As of March 31, 2025, the FVA group had 42 Managing Directors.

Here's a quick look at how the segments stacked up in the record fiscal year 2025 (ended March 31, 2025) based on the latest full-year revenue data and the LTM June 30, 2025 breakdown:

Recruiting and retaining top-tier, specialized advisory talent

Talent acquisition is a critical activity, as the firm attributes its deal flow leadership to expanding its team while rivals paused hiring. The firm employed 2,702 people worldwide as of March 31, 2025. The Managing Director (MD) headcount stood at 347 as of the July 2025 investor presentation.

Productivity metrics reflect the success of this talent strategy:

• Revenue per MD for the fiscal year 2025 was $7.0 million.
• The Financial Restructuring segment reported $9.7 million in revenue per MD in Q4 FY2025.

The firm has consistently grown its MD headcount with a 20-year Compound Annual Growth Rate (CAGR) of 9%.

Integrating acquired firms like Triago to bolster the Capital Solutions Group

Strategic acquisitions are used to deepen sector coverage and add service offerings; the firm has made 19 acquisitions over the last 12 years. The integration of expertise, such as that bolstering the Capital Solutions Group, directly supports deal execution in private capital markets. The CSG advised on 15 GP-led transactions in 2024 alone, showing the immediate impact of specialized team expansion.

The overall firm financial health supports this, with the Board declaring a quarterly cash dividend of $0.60 per share, a 5% increase.

Houlihan Lokey, Inc. (HLI) - Canvas Business Model: Key Resources

You're looking at the core assets that power Houlihan Lokey, Inc.'s advisory engine. These aren't just line items; they are the people and the platform that generate their market position.

The firm's human capital is substantial, built on a philosophy of internal development. As of March 31, 2025, Houlihan Lokey employed 2,702 people worldwide. 2,702 people is a lot of specialized knowledge to coordinate.

A critical component of this workforce is the senior leadership tier. The Managing Director headcount has seen consistent growth, reaching 339 in 2025. This senior group is the direct interface for many of the firm's most complex mandates.

Market access is secured through a broad physical footprint. Houlihan Lokey operated a global network of 35 offices as of March 31, 2025. This network spans the Americas, Europe, Asia, Australia, and the Middle East, allowing for local execution on global mandates.

The firm's intellectual capital is quantified by its sustained dominance in specific advisory areas, particularly in complex financial situations. This proprietary knowledge base is a direct result of decades of transaction experience.

Here's a look at the scale of their restructuring track record, which underpins much of that intellectual capital:

The market-leading reputation in restructuring and middle-market M&A is not abstract; it's reflected in consistent top rankings. This reputation helps attract both talent and mandates, creating a positive feedback loop.

The firm's market leadership in key areas as of recent reporting includes:

• No. 1 investment bank for all global M&A transactions for the past two consecutive years.
• No. 1 M&A advisor for the past 10 consecutive years in the U.S.
• The Financial Restructuring segment maintains the highest revenue per managing director at $9.5 million for fiscal year 2025.
• The firm advised on 88 Global Distressed Debt & Bankruptcy Restructuring deals in 2024, ranking first.

The sheer volume of engagements supports the intellectual capital claim. For example, in 2024, Houlihan Lokey advised on 415 Global M&A transactions. That's a lot of reps and sets.

Houlihan Lokey, Inc. (HLI) - Canvas Business Model: Value Propositions

You're looking at the core strengths that make Houlihan Lokey, Inc. (HLI) a go-to advisor, even when the market feels uncertain. It all comes down to independence and proven results.

Unconflicted, independent advice (no balance sheet lending conflicts).

The firm's value proposition is built on pure advisory, meaning no conflicts from holding assets on its own balance sheet. This independence is a key differentiator when clients need objective counsel.

No. 1 global restructuring advisor for the past 11 years. This sustained leadership is backed by advising on more than 1,800 restructuring transactions since 1988, involving aggregate debt claims exceeding $3.8 trillion. Furthermore, the firm advised major parties-in-interest in 12 of the 15 largest corporate bankruptcies in the U.S. between 2000 and 2024.

Deep sector specialization across numerous verticals, ensuring defintely precise advice. Houlihan Lokey, Inc. (HLI) maintains deep expertise, with discussions at its 2025 Global Conference highlighting key themes from across more than 80 sectors within multiple industries and services.

Market leadership in M&A transaction volume, closing more deals than competitors. For the first three quarters (Q1-Q3) of 2025, Houlihan Lokey, Inc. (HLI) spearheaded the number of deals advised, closing 240 transactions, outpacing peers by a significant margin. This leadership in volume is consistent across different reporting periods and sectors.

Here's a quick look at the volume leadership in M&A for parts of 2025:

Counter-cyclical business model that performs well in both strong and weak markets. The firm's Fiscal Year 2025 results demonstrate strong performance even amid market shifts, reporting record revenues of $2.39 billion, a 25% increase over the prior year's $1.91 billion.

The financial performance highlights include:

• Fiscal Year 2025 Revenue: $2.39 billion.
• Fiscal Year 2025 Diluted EPS: $5.82.
• Fourth Quarter Fiscal 2025 Revenue: $666 million, up 28% year-over-year.
• Corporate Finance revenue growth for FY2025: 38% increase.

The board's confidence is shown by announcing a 5% hike in the quarterly dividend to $0.60 per share.

Houlihan Lokey, Inc. (HLI) - Canvas Business Model: Customer Relationships

The customer relationship strategy at Houlihan Lokey, Inc. (HLI) is fundamentally built on deep, sustained engagement, positioning the firm as the trusted advisor to more top decision-makers than any other independent global investment bank. This is not a transactional model; it is about embedding senior expertise within the client's strategic decision-making process.

High-touch, senior-level advisory relationships.

The firm ensures senior involvement is a constant, not an exception. This is evidenced by the high productivity metric achieved by the senior banker cohort. For the fiscal year ended March 31, 2025, Houlihan Lokey, Inc. (HLI) generated total revenues of $2.39 billion. With 347 Managing Directors as of June 30, 2025, this translated to an average revenue per Managing Director of $7.0 million in FY2025. This high revenue per senior banker underscores the premium placed on experienced, high-level advisory time.

Relationship-driven model focused on repeat business and referrals.

The focus on deep relationships drives recurring engagement, which is critical for stability, especially given the firm's diversified business mix across cyclical and counter-cyclical segments. While the exact percentage of revenue from repeat business isn't publicly itemized, the sheer volume of activity across market cycles suggests strong client loyalty. For example, in the first half of 2025, Houlihan Lokey, Inc. (HLI) led the financial services sector in M&A deal volume with 25 deals advised. Furthermore, through the third quarter of 2025, the bank handled 240 transactions overall. The firm competes directly on the strength of client relationships.

The client base is heavily weighted toward sophisticated financial actors, indicating established, long-term partnerships:

Dedicated industry coverage teams for long-term client engagement.

Houlihan Lokey, Inc. (HLI) organizes its advisory services around dedicated industry groups to foster long-term expertise and client continuity. The average tenure of the executive management team is over 35 years, and the average tenure of the management team is 7.3 years, signaling deep institutional knowledge that benefits long-term client relationships. The firm has dedicated professionals across numerous sectors, including:

• Corporate Finance
• Financial Restructuring
• Financial and Valuation Advisory
• FinTech
• Consumer Group (including E-Commerce and D2C)
• Business Services Group
• Financial Services Group

Commitment to client outcomes, not just transaction fees.

The firm's reputation is tied to achieving superior results, which is a direct measure of client outcome success. Houlihan Lokey, Inc. (HLI) has earned a reputation for providing superior service and achieving outstanding results across its advisory services. This commitment is reflected in the firm's ability to maintain high productivity metrics even while navigating complex market conditions. The focus is on analyzing a full range of strategic options-mergers, divestitures, capital raising, and advisory-based on comprehensive industry understanding, which is the core of driving the best outcome for the client, rather than simply closing a deal for a fee.

The firm's geographic footprint supports this global commitment, with 71% of revenue from the Americas, 23% from EMEA, and 6% from Asia for the LTM ended March 31, 2025. This global reach ensures that client outcomes are supported by worldwide market intelligence.

Houlihan Lokey, Inc. (HLI) - Canvas Business Model: Channels

You're looking at how Houlihan Lokey, Inc. (HLI) gets its advice and services to clients-it's all about high-touch, relationship-driven access, supported by a global footprint. The primary channel is definitely the direct line to the experts.

Direct engagement via Managing Directors and senior bankers is the core delivery mechanism. These senior professionals are the ones who build and maintain the deep, long-standing client relationships that drive advisory mandates. The firm has been actively growing this key resource; as of July 2025, Houlihan Lokey had 347 managing directors globally. To give you a sense of the focus, as of March 31, 2025, the Financial Restructuring group alone had 57 FR Managing Directors working around the globe, which they believe is one of the largest restructuring groups in the industry. Productivity remains a key metric; revenue per MD reached $7.0 million in Fiscal Year 2025. This direct access is how they sell complex M&A, capital solutions, and restructuring advice.

The global network of physical offices serves as the essential infrastructure for this primary service delivery. While the relationships are personal, the execution requires a physical presence across key financial centers. Houlihan Lokey serves corporations, institutions, and governments worldwide, operating through offices in the Americas, Europe, the Middle East, and the Asia-Pacific region. As of July 2025, the firm maintained 33 locations worldwide. This physical reach is crucial for coordinating cross-border deals and maintaining proximity to clients, even though the total employee count as of March 31, 2025, stood at 2,702 people.

Here's a quick look at the scale supporting these channels as of the latest reporting:

Thought leadership and industry conferences act as a critical channel for brand reinforcement and lead generation, moving beyond one-to-one client servicing. The firm uses premier events to showcase expertise and build relationships at scale. For instance, the ONE Houlihan Lokey Global Conference in London was scheduled for November 18-20, 2025, covering key sectors like Consumer, Healthcare, Industrials, Technology, and Financial Services. They also held a New York version of this conference in May 2025. These events are designed to offer multi-industry content and unmatched networking opportunities.

Finally, targeted digital content for market insights and firm reputation supports the senior bankers by establishing intellectual authority. While not a direct transaction channel, digital distribution of white papers, proprietary data analysis, and market commentary keeps Houlihan Lokey top-of-mind. This includes launching platforms like their proprietary private credit analytics platform, which serves as a digital channel to deliver differentiated insights to clients. The firm's consistent ranking as the No. 1 global M&A advisor for the past 10 years in the U.S. is heavily promoted through these channels to cement their reputation. Finance: draft 13-week cash view by Friday.

Houlihan Lokey, Inc. (HLI) - Canvas Business Model: Customer Segments

You're looking at who Houlihan Lokey, Inc. serves, and the numbers show a broad, sophisticated client base.

Large public and closely held companies (mid-cap focus)

• Corporate Finance segment generated $1,526,756 thousand in revenue for fiscal year ended March 31, 2025.
• Corporate Finance segment accounted for 63.8% of total revenues for the last twelve months ended June 30, 2025.
• Corporate Finance revenues were $413 million for the fourth quarter ended March 31, 2025.
• The firm ranked No. 1 investment bank for all global M&A transactions for the past two years.
• The firm ranked No. 1 M&A advisor for the past 10 years in the U.S..

Private equity firms and financial sponsors

This group is a core focus, especially within the Corporate Finance and Financial Restructuring areas.

Debtors, creditors, and other stakeholders in distressed situations

This is the domain of the Financial Restructuring group.

• Financial Restructuring segment contributed 23% of total revenues for the last twelve months ended June 30, 2025.
• Financial Restructuring segment revenues were $164,546 thousand for the fiscal year ended March 31, 2025.
• The firm is the No. 1 global restructuring advisor for the past 11 years.
• Financial Restructuring revenues were $165 million for the fourth quarter ended March 31, 2025.

Governments and institutions requiring complex valuation and financial analysis

These clients utilize the Financial and Valuation Advisory services.

• Financial and Valuation Advisory segment represented 13% of total revenues for the last twelve months ended June 30, 2025.
• Financial and Valuation Advisory segment revenues were $86,988 thousand for the second quarter ended September 30, 2025.
• The firm is the No. 1 global M&A fairness opinion advisor over the past 25 years.

Overall, total revenues for fiscal year ended March 31, 2025, reached $2.39 billion.

Finance: draft 13-week cash view by Friday.

Houlihan Lokey, Inc. (HLI) - Canvas Business Model: Cost Structure

For Houlihan Lokey, Inc., the cost structure is defintely weighted toward its human capital. You can think of it as primarily a people-driven, fixed-cost structure, which is typical for a top-tier advisory firm. This means that a significant portion of the operating expenses is tied directly to the compensation of its bankers and support staff, and these costs don't immediately scale down if revenue dips a little.

To give you a clear picture of the scale, here are the key financial components for the fiscal year ended March 31, 2025. We need to look at the total revenue to put these expenses in context. Houlihan Lokey, Inc. reported total revenues of $2.39 billion for fiscal year 2025.

The compensation component is the single largest driver of costs. Here's how that breaks down based on the required figures and the relationship to revenue:

• Employee compensation and benefits expense for FY2025 was reported at approximately $1.524 billion, as per the required structure data.
• The GAAP compensation ratio, which is the expense as a percentage of revenue, was approximately 63.8% for the fiscal year ended March 31, 2025.
• The high compensation ratio, when looking at adjusted figures, settles around 61.5% of revenue.
• Non-compensation expenses, covering things like rent, technology infrastructure, and data subscriptions, totaled $364 million for FY2025.

Beyond the recurring personnel and overhead costs, you always have to factor in the costs associated with strategic growth. Houlihan Lokey, Inc. has a history of using acquisitions to expand its geographic reach and service offerings. These activities bring in non-recurring expenses, such as legal fees, integration costs, and sometimes, deferred retention payments related to the acquired teams. These costs can temporarily inflate the non-compensation or compensation lines, so you have to look at the adjusted figures to see the core operating cost base, which is what that 61.5% adjusted ratio helps you see.

Houlihan Lokey, Inc. (HLI) - Canvas Business Model: Revenue Streams

You're looking at how Houlihan Lokey, Inc. (HLI) actually brings in the money, which is key to understanding its stability. Honestly, their revenue streams are heavily weighted toward transaction success, which means they earn the big fees when deals close.

For the fiscal year ended March 31, 2025, Houlihan Lokey, Inc. (HLI) posted record total revenues of $2.39 billion. This performance shows a strong rebound and execution across all their main advisory groups.

The core of the revenue generation is tied to fees earned upon transaction completion; this success-based component makes up the majority of the total take. It's a classic investment banking model, but HLI's diversification helps smooth out the inevitable deal-making troughs.

Here is the breakdown of the reported revenue by segment for FY2025, which really shows where the bulk of the activity was:

You can see the Corporate Finance segment is the clear leader, driving over 60% of the firm's total income for the year. This segment includes advisory services for mergers and acquisitions (M&A) and capital markets transactions.

The Financial Restructuring group remains a critical, counter-cyclical revenue source. For FY2025, this segment brought in $544 million. As of the last twelve months ending June 30, 2025, Financial Restructuring accounted for about 23% of the firm's revenue, showing its consistent importance.

The Financial and Valuation Advisory (FVA) segment, which handles things like fairness opinions, contributed $318 million in revenue for the fiscal year. This segment's revenue growth for the fiscal year ended March 31, 2025, was 11% compared to the prior year.

To be defintely clear on the structure of these earnings, the revenue sources are characterized by:

• Success-based fees upon transaction completion, which is the majority of the revenue recognized.
• Fees derived from M&A and capital markets advisory work within Corporate Finance.
• Advisory fees from restructuring engagements, which often involve complex debt and equity solutions.
• Fees for independent valuation services and fairness opinions from the FVA group.

The overall revenue performance for the fiscal year ended March 31, 2025, was a 25% increase from the $1.91 billion reported in the previous fiscal year. Finance: draft 13-week cash view by Friday.