Houlihan Lokey CEO Scott Adelson noted that the mid-market M&A "party" has not yet begun, despite improving market conditions. The firm reported a year-on-year decline in quarterly earnings per share, though it achieved record full-year profits and raised its quarterly dividend.
Houlihan Lokey's commentary on the M&A market and its own financial performance provides insight into the health of the mid-market deal landscape and the company's strategic direction amid fluctuating economic conditions.
Houlihan Lokey CEO Scott Adelson commented that the anticipated surge in mid-market M&A activity has yet to materialize, describing it as a "party" that has not yet begun. This sentiment comes as the firm reported a year-on-year decline in its quarterly earnings per share, despite achieving record full-year profits. The company also announced an increase in its quarterly dividend to $0.70 per share.
Adelson, who has been with Houlihan Lokey since 1987 and became CEO in 2024, noted that the firm is built to perform in various market environments. He highlighted the firm's strong balance sheet flexibility, which supports an active acquisition pipeline aimed at expanding its global advisory platform. Despite missing analyst expectations for the quarter, Houlihan Lokey ended fiscal 2026 with record revenue across all advisory segments.
The firm's investment narrative relies on its diversified advisory model and balance sheet strength to navigate choppy quarterly results. A key near-term catalyst is the conversion of its record backlog into revenue, while risks include elevated costs and weaker-than-expected quarterly execution potentially compressing margins. Analysts have differing views on the firm's future revenue and earnings, with some projecting higher figures than the baseline scenario.