Q1 Earnings Confirm Revenue & EPS Decline, Operating Cash Flow Worsens
HLI is trading near its 52-week low of $112.83 (11% above the low).
Summary
Houlihan Lokey's Q1 results show a 16% revenue drop and 20% net income decline year-over-year, with operating cash flow significantly worsening, despite ongoing share repurchases.
Key Events · Earnings and Guidance · HLI
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Significant Revenue and Earnings Decline
Total revenues decreased 16% year-over-year to $511 million, and net income attributable to Houlihan Lokey fell 20% to $78 million, resulting in a 19% drop in diluted EPS to $1.15.
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Deterioration in Operating Cash Flow
Net cash used in operating activities significantly worsened to $(336) million for the quarter, compared to $(132) million in the same period last year, primarily due to cash bonus payments.
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Mixed Segment Performance
Corporate Finance revenues dropped 24% and Financial Restructuring revenues decreased 8%, while Financial and Valuation Advisory revenues increased 13% year-over-year.
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Continued Share Repurchase Program
The company repurchased $50 million of Class A common stock during the quarter, with $180 million remaining under the existing $500 million authorization.
Analysis · HLI · Finance
This quarterly report confirms the significant year-over-year declines in revenue and net income previously hinted at in a preliminary 8-K. The substantial increase in net cash used in operating activities is a key concern, indicating a worsening cash burn from core operations. While the company continues its share repurchase program, the overall financial performance for the quarter is negative.
At the time of this filing, HLI was trading at $125.49 on NYSE in the Finance sector, with a market capitalization of approximately $8.8B. The 52-week trading range was $112.83 to $211.78. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.