Houlihan Lokey CEO Cuts Off Analyst: 'No, No, No' To Bigger Deals After 142 Closings
Scott Adelson said the bank has made no decision to do bigger deals, even as fewer corporate finance closings carried richer fees.
Houlihan Lokey CEO Scott Adelson cut off an analyst on the company's second-quarter earnings call Wednesday to reject any reading that the firm is moving toward bigger deals. The bank, which posted $692 million in revenue, closed fewer corporate finance deals at higher fees.
"No, no, no" on the call
An analyst asked about what sounded like a tonal shift in the deal size the firm targets and what drove a decision to lean into bigger deals. Adelson interrupted: "No, no, no."
He said he had worried the analyst would take that message from remarks by Chief Financial Officer Lindsey Alley. The work, he said, is "squarely sub a couple billion dollars," mostly in the few-hundred-million-dollar range. "There's no decision to do bigger deals," he said.
Adelson said the firm is using its data on what closes and what doesn't to favor deals with a higher probability of closing over more speculative ones, and called that a long-term trend. Asked by a Morgan Stanley analyst whether the sub-$2 billion range holds, he answered "Yes, 100%."
Fewer deals, richer fees
Houlihan Lokey is an independent investment bank that advises on mergers and acquisitions, capital raising, restructurings and valuation. Corporate finance revenue was $481 million in the quarter, up 10% from a year earlier. Alley said the unit closed 142 transactions, down from 171, because a disproportionate number of higher-fee deals closed.
Year to date, she said, corporate finance revenue is down roughly 6% and closings roughly 9%, so the second-quarter gap reflects timing and an unusual first quarter. "I wouldn't read into it any further than that," she said. She added that the firm is more intentional about what it takes on, so revenue and deal counts may not track as closely going forward.
Alley said average transaction size has grown from about $100 million to "closer to 200 to 300 million," and should keep rising "in baby steps."
Restructuring and the second half
Financial restructuring brought in $118 million, up 7%, and Adelson said backlog points to a stronger second half and elevated restructuring revenue through fiscal 2028, with software a major driver. Financial and valuation advisory produced $93 million.
Alley said the firm should see unseasonably strong second-half results, though it needs cooperation from markets. Adelson said the firm remains cautious about macro volatility and will report third-quarter results this winter.
Adelson said the firm will update investors when it reports fiscal third-quarter results this winter.
Sources
- Houlihan Lokey: Fiscal Q2 Earnings Snapshot | wusa9.com — Associated Press
- Goldman Sachs and Houlihan Lokey lead North American M&A financial advisers in Q1–Q3 2026 — Yahoo Finance
- Houlihan Lokey Further Strengthens Equity Capital Solutions Platform With Senior Hire – Company Announcement - FT.com — Financial Times
- Houlihan Lokey Non-GAAP EPS of $1.85 beats by $0.20, revenue of $692M beats by $60.39M (NYSE:HLI) — seekingalpha.com
- A deal that benefited Hume Industries and HLI — The Edge Malaysia
