HLI - Earnings call transcript Q4 2021

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Houlihan Lokey's Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. conference being this XX, today, that XXXX. note call recorded is May Please turn to call Lokey's will the I now over General Christopher Counsel. Houlihan Crain,

Christopher Crain

should website fourth Thank access can XXXX section. be operator, and the everyone. in which now, you, Houlihan the on Lokey Relations hello, earnings release, to www.hl.com and quarter everyone our found fiscal at year By have Investor

other caution We phrases statements, formal cause the relying that And risks forward-looking or and begin of should our for therefore, from financial results is for regulatory interpreting as remarks, XX-K are of discussion you you our including guarantees results anticipate, numerous could forward-looking statements March could that the filings, statements. materially today our similar we expect. to actual such everyone and we by of These SEC. Before review them. future all we to Form encourage remind identified a include performance. uncertainties recent to when should SEC year the XXXX, filings with impact investors discussion our will These when to the words use to risks filed not We which detailed refer usually ended XX, need subject it of are differ the future exercise and that more operating expect, will, condition. on are what

GAAP. comparable as to hl.com the of remarks, turn some financial for reconciliation be Company. measures is be questions. These financial the Scott. Officer Executive we not we a in Lokey's the call, in measures call and and Alley, non-GAAP Hosting will measures earnings During today's or to open available accordance these today, presentation most will and prepared that, Scott Company's in have in our believe measures, to will provide discuss Houlihan opening performance. substitute the isolation directly Officer; with They results over investor considered Financial useful I'll of website. call we the GAAP A Chief we financial Beiser, evaluating call on the Lindsey the which our can release our Chief then should With

Scott Beiser

to XXXX, to Houlihan Thank Christopher. that M&A mitigating levels XXXX, and financial with highlighted the XXXX model. Lokey's call. quarter and speed everyone, a of Welcome, impact activity. the in activity of reversed our year pandemic, up In with almost Finance XXXX levels global our early in roller fiscal employees the in reduction valuation fourth fall began By Financial of as of new the end you, our more normal increased, our Fiscal spring Year By to similar significantly returned complete the and over opportunities Restructuring Corporate a new XXXX that pace, our in $X.XXX fiscal activity, business period. year, the back business ninth consecutive year. business annual growth annual from over of is pause an and rate record a a produced year our and billion XX% coaster in best brought practice the the nine-year last activity an spring trends business we revenues, was of increase XX% of improved. a rapid balanced of Fiscal revenue in restructuring strength compounded earnings growth had these

our proud segments business We record are especially of achieved that results. all three

record against last grew revenues level, Finance year's XX%. grew over XXXX, record revenues Valuation Advisory last revenues XX% grew Corporate fiscal Financial year's XX% Financial Restructuring level. and For and the

achieved year's We per $X.XX earnings adjusted XX% also share, an results. increase last in of over

last Finance earnings last year. per and over up $X.XX, but year. FVA down another Corporate last from quarter, year. in revenues peak up adjusted revenues, Financial quarter, year quarter's up still over For Restructuring last record we XX% achieved over over XX% last up and the million fourth was reported were share $XXX XX% XX% was

industry paying which Furthermore, U.S. lines grew bullish dividends our investments environments strong We at as records of valuation one of were M&A, FVA businesses XXXX our revenues and in are results the this and all Our are in for groups, faster the our across our markets almost most fiscal achieved than the outside international of history. all U.S. revenues. year. with most entered operating record our market subproduct levels capital firm's

mandated levels project size transaction record estimated activity, at new We and fees. transaction are engagements, and for business

will balance cautiously business seen remain through consistently this this have the that at year. XXXX, it continue least we calendar and optimistic of We environment improved of since summer

has While revenues operating in are pre-pandemic the environment current pace our as levels, in record Restructuring bullish restructuring elements slowed highlighted early quarters, from is expect in previous The torrid firm business levels. at XXXX. at we those fiscal levels, of its return XXXX for Financial to now to and practice, our fiscal

the of programs, the finally, about restructuring industries, several medium the and support the are disruption of outlook likely that challenges long adjust that believe restructuring There the term. We eventual global to expansion support record we and major optimism, our including end leverage, pandemic-related product themes continue remain technology continued over optimistic as exist society's most government levels to norm. the company continued new across companies of

for over and experienced, during we we continue just our revenues revenue experienced so. economic will through be this business like the believe restructuring growth next decade cycles consistent volatile growth or the the this Although one have can cycles

Financial We grew XXXX, for frame Great year compound financial Restructuring a pandemic, of just and April in X, groups. and reference, gas prior our care including has year of the that invest we a employee the almost the Throughout Since people. ever. the active we've calendar periods senior and our to dislocation, outsized employees As recently. the prior Great to our recruiting Recession, have challenging activity oil remain calendar while of XX and from addition at most new Managing revenues to Recession, both and just recruiting we oil cost pandemic. of risen announced by XXXX, junior business the capable year, in of crisis the very promoted gas during April, noting the continued and in And in punctuated XX%, class the to and to largest three successful rate growth annual Director MDs health

in On goal the use our remain $XX front, drive dialogue with cash in million excess position. cash, several deploy shareholder continue to to that manage quarter expect we fiscal to more issue over will to value. repurchase stock our our fourth we acquisition confident and of shares order we our than continue to repurchased are effectively firms in we In and to M&A

from per In our with our as of we cash share announce closing, are consistent a $X.XX and to June per in excess on during pleased success June with quarterly desire $X.XX to are our performance payable Finally, pleased return year. this our increase incredibly of to our shareholders, dividend share to XX X. we to record XX% shareholders difficult

We men and shareholders. who to thrilled are hard and proud Houlihan so women achieve and support from are results at of the our with these worked we continued clients Lokey receive the

we to challenges With that, call for are While beyond. XXXX ahead, Lindsey. turn we over always positioned new I'll the believe and are well there fiscal

Lindsey Alley

this when fee period the Thank you, period same the to closed year. $XXX transaction quarter for quarter to million last last average this year. XX% year, Scott. up Finance same increased XXX in Revenues the to compared quarter, We quarter our compared and when the Corporate transactions same XX were compared on in closed last deals

Financial We the fiscal Corporate increase As higher XXXX. compared last business in from momentum year. Scott and closed last the average Restructuring revenues the this same to quarter for deals when period XX% million same quarter XX our to transactions see same last continue transaction heading Finance period quarter, period significantly to suggested, we into our on XX fee very in was were $XXX closed strong this year. a compared the year,

we more As last period business In quarter fee And had to were in continues restructuring We during pre-pandemic levels. revenues returned same and XXX XX% expect the to year. Advisory, our increase per and significantly Financial XXX to the mix Valuation events Scott to an quarter, in for but activity stated, the fiscal lower to in revenues changes, we a XXXX. $XX from has year, see something restructuring events solid revenues evolve. continue unless fee million increase the period as last same compared see normal

grew FVA and momentum XXXX, its as fiscal we XX%, business drove continues XXXX. the fiscal For growth that enter

Turning to expenses.

were compensation Our year. for for expenses $XXX $XXX adjusted the versus fourth period quarter, same million million last the

payments deferred to related acquisitions. certain Our was only for adjustment

with expense ratio was expense fiscal ended the adjusted ratio XX.X%. XXXX an adjusted compensation XX.X% we quarter, and of Our compensation for

fiscal a revenue XXXX long-term result compensation pandemic. previous we ratio is attributable slightly reimbursable expenses to to discussed for primarily on As from higher target, impacts our lower of as the have due than our calls,

long-term to XX.X%, higher of and compensation -- reimbursable target XXXX, for the towards our XX.X% although continued the be to on fiscal return between we lower For expect based the range. expect we ratio end adjusted ratio expenses, of to expense

XX.X% million non-compensation for quarter This expenses same resulted period last X%. X.X% the versus last the quarter $XX Our decline versus quarter for adjusted non-compensation adjusted a $XX the were of in an same million of year, for the expense year. in ratio

XXXX. expenses expense ended quarter, We of X.X% versus in ratio XXXX we non-compensation This $X.X adjusted of with non-compensation million fiscal a in our out amortization. fiscal acquisition-related XX.X%

to more fiscal in to expect we travel and normalized in increase latter operations, non-compensation We in XXXX see the the a part as return expenses especially to fiscal year. begin of significant

XX% the in it fiscal reminder, range that ratio that for below our XX% a expense long-term XXXX. likely revenues. non-compensation is adjusted We end As of and range we up will believe is between

primarily value for versus in approximately income future Our a acquisitions. last was and approximately other cash adjusted and balances investment This $X of of an related year. earn-out $XXX,XXX period result payments earned quarter and our to on same the the of of million expense in expected the expense to interest increase an income lower decreased

adjusted the quarter rate for period the year. same XX. fiscal for compared XX.X% rate was during year. Our compared adjusted tax to effective XX.X% for our was to And the last X% year, XX% the fiscal effective prior tax

long-term anticipate rate and our at For between XX%. an future years, we of tax XX% range targeted effective

fiscal of slightly long-term we discussed range result COVID-related ended quarters. have I as this previous For a XXXX, in that up factors below

and sheet uses balance the cash. to of Turning

had quarter we of of $X investment over and securities. equivalents cash end, billion and As the unrestricted

cover November. to XXXX this fiscal a earmarked this accrued the month of will is but As cash a significant that for bonuses in month unpaid and be reminder, paid portion of

to throughout share quarter, X likely, as fiscal given to cash XXXX. to years, for fourth XXXX. we our approximately In XXX,XXX addition previous be to position, compensation their offset that we we -- our intend that, share as paid plan to we new we expect shares with month, of exceed repurchases per employees price we excess these is repurchase fiscal for program. fiscal bonuses issue repurchased purchased repurchases average will open our cash questions. it this million an for Similar And $XX.XX the to what our of month. line shares issue XXXX And at can with this our of to part shares share operator, part In

Operator

first [Operator question Morgan Instructions] Stanley. Manan Our Gosalia is from of

Manan Gosalia

you travel XX% returning to XX% And last if It's point down year. used percentage months. might I margins at I it one last So or even maybe, XX% only look so. say, what the for six pretax if of to had be, go we normalize

not is, in cycle for we're future will do margins stay turns? foreseeable question that you Or the guess M&A something I the pretax thinking think is the range that there until about? this So

Lindsey Alley

settle that think non-compensation were tell to at elevated all expense you below early for certainly, us And have we're pretax too once pre-pandemic, little of where No. out it's I have slightly margins. Look, on going we're we elevated where to -- you're a while to this. our levels going kind TM&E of

the into pandemic, where hard settle. went we're tell right were XX%. going around we Before to to It's we

grown has business Our bit. quite a

expect do on at -- up pre-pandemic, of we it's understand upside versus kind on how to non-comp kind back, levels our end some to pretax need what of our but -- margins TM&E I I So going settling expense. where and what come think we is

Manan Gosalia

to M&A the current the of think your on were clients, without fact do we guess share of if still in system, continue correction is momentum market shock just you conversations based been have I on how being the that there prices at big some here enough reliant then is for on So while? a side, And sort it. activity to their for levels? Got some get with near these the there activity level highs

Scott Beiser

as I the we seems mean previous building, the been months, and be momentum better last said, for really, has months. each six than probably the to month

more being of a equal, positive it's they And right, when momentum. all or said, than bit now, couple year's a still is decline Whether side typically, is that's see, values asset a week month of things positive M&A more decline. a rising, when decline, if That of that's a quite everything you're So there negative. being practice. for valuation quarters we activity. a entered our worth markets it's we capital in or M&A, into difference of actually very and But right are the

Lindsey Alley

I or result, public. XX% business we swings is so though, a stock would XX% as tell is in as reminder, our private, a the you, a susceptible are little bit less to M&A And markets. probably of

that tend because if effect. longer see to mix. If a is start it term, be on have more we they're our monthly fundamental I they effects an to will think to bit if valuation, of Scott's little swings, from the just point, insulated we

Operator

of JMP Devin Our Securities. Ryan next is question from

Devin Ryan

the. on staying Maybe

Lindsey Alley

don't you're Devin, caller? the to circle next little. we Why out up Devin? cutting a

Operator

Worthington Our from JPMorgan. next question Ken of is

Ken Worthington

for you on thank restructuring. your So comments

a As to 'XX levels. returning at idea might what a the of the the you better about point Houlihan look represent the pipeline? some fiscal to trying think pipeline elevated this of either is balanced still of the rate? already I'm better we about talked with outlook, working XXXX like. where is or outlook And replenishment get sort Does are through here? you Or pre-pandemic

Scott Beiser

clearly growth we've long-term is, Yes. I seen What business. our said, restructuring rate like a in

quarters last and There to periods couple years, in to these based -- that it, that of periods the long-term of I'll the several now we've not always over really upward continue profile two line. we decades. one right above, factors trend the upon escalates growth have of last those many a We or whether seem expect a seen it periods We're results that described. are call normal

we to a increase, our think to line But there assume not look is that unless people example best continue would to but trend those think or many pre-pandemic good fiscal in to you for said, I we fiscal whether out change it's saw punch reasons marketplace. think environment. And meaningfully it are still we in we I the why is about 'XX that. going expect grow business that trend line, like -- can at So at look to clearly that levels the continues there's 'XX, from above dramatic

fiscal expect don't 'XX. 'XX fiscal occur another Just to short in term,

Lindsey Alley

to I talk And about when pre-pandemic, it's revenues. put talking mean on about numbers we we're levels. activity not hard

in on. levels our client mix of product change on But we does years Our fees we're bit little change, the pre-pandemic. we working fall restructuring. in mix activity are And to the so a outsized in does Where have some some depend are out revenues years, don't. transactions nature and going

Ken Worthington

Okay.

prior I gains was in Okay. little know elections. a capital about Great. feels to changes maybe calls, And like real it but bit tax we've is rate than more it talked following

and seem environment not years? tax is does does forward the current to it a Or that from both to that feel own maybe into And tangible that. sort I perspective? Might then deadline? possibly M&A perspective like deals you into you've more willing participate got eight growth company's business sellers looking get more from in year-end think your questions I to of having on M&A? extent extent an middle-market what what get in years it pull your like future in prior from discussions the So a impact wrapped to you'll because through

clear. Just to be

Scott Beiser

as and environment. So their to I it environment tax pending think transactions core in today's in clients the pertains really do desire change a two and questions there's to tax our

driving change probably might change it's doing in occur. are in beat saw pull in has thought clients elections that same I now the a of terms you clearly say of congressional clients, discussion the when I The right but would a all Ultimately, transactions our point and year not of not presidential we lot. and thing forward is if there little to convincing would that there think we might but a amount occur. whole to newspapers. we if something a amongst calendar a noted that read believe, might case moved now change of We do summer some it's that's done. I potential XXXX, back the a today force, be Obviously, in on.

So not why not but significant of say point, talking deals now, decent to it's sure any it's right driving I'd and be people doing a component it's are going flow. deal the

get reasons top right you would closer in say handful are December that it's activity. As M&A to maybe we a XX, usually not something participating of But people that occurs. is now,

to, thing people talking specific nothing we do As a and something of urgently might But or before it ability deal a influence want this very and with activity when are is to to our specifically acquisitions reasons almost are force or them or of looking us. that all think us out we're that they to just talking acquire with to Lokey's also a not that going and pertains really rate to in quarter close tax there do driving calendar want same is deal changes. there do there wanting to outcome anticipation companies the to companies, That why Houlihan about we're M&A we concern year businesses. the the is to next

Operator

from Sachs. Goldman Ramsden question of Richard next Our is

Richard Ramsden

on I perhaps question a can So productivity. ask

a got Corporate so very broader are a you've more in a into obviously can such down day brand, more cyclical perhaps that break the product base working You've to client seen significant are factors you've could the and on? think in business improvement set, structural broader done the recognizable having think in they productivity get you are as the improvement so And Finance such this got in people that environment, fact versus it fact us just just the help more wondered you remotely factors I particular. in as you a that stick likely if

Scott Beiser

just a improve And continues has year Yes. just today increased, years been One, notoriety brand on improves, of with -- few part we're would they as have ago. DNA were bigger fees. I transactions and transactions and on think, things. ago, I as mention think we years. asset businesses the months brand than a work bigger that, able values our a for the are as five to size more selling that of our ago, as six Two, were I to result bigger

So the asset of part escalation that of valuations. just is

the to whether it per In per you as per I the comes productivity this and travel. think we do so benefited se of have down terms by lack MD, employee, of clearly others

some You just go then be marketplace remotely, the And going to everything going is remotely, to They more airport. to didn't Effectively They get meetings. to a come back. our able have to the planes. do on transactions they expect willing lot bankers didn't were to of the done. do have that's once we do to and weren't

that where probably shift never like and will all to needed. going back were a pre-pandemic, where longer-term I being things fiscal may are the fundamental in some We to 'XX, et we is of it equal, 'XX. types do but come look So into bit cetera, it meetings that think was eat little completely but believe 'XX, method 'XX, hard in-person other to occurs, there's productivity when

them best but I'd say them negative. some people, So good level. is remotely will in-person. as level that start last as at level, And things last you assume of the The with we train the to I especially a again, as we are to is which class hires think point, as training some is we of the junior positive efficiency traveling of our had, could, still never an we thing those have productivity new

once in their in much junior of and team improvement So they our will easily back that get most colleagues, an I the with actually office members probably the we're think once can more and all better work has productivity.

Lindsey Alley

to want just couple things it. to of a add I

from the which performance in average of the productivity younger market much very from of than of the space a strong amount Europe -- than thing tended couple is helped of saw our Corporate sustainable. in is that saw note I'd there than The operations, And this class. and economies to been results, first the be our European see operations, productivity in we European a We There's over mid-cap has our group age our we a are U.S. really is then the Finance is different U.S. bit banker drive which in space lower financial second some fair year. is the last productivity, little the large-cap that a strong drag given the the Director origination bit think we years, which middle of

you'll see And generated folks across become so per made a productivity because -- you of big when us, have them at lines those Director. of look year bit their about this you'll a just Managing and delivered three is Lokey from Richard, business see quite are at pretty those to the just Houlihan for a MD. MD, really Directors that product all class promote lot way to And

kind so of we do does business have of Houlihan you've not Lokey, up in the MD below picked class us a that numbers. for And bit that's these group at a quite --

Richard Ramsden

really Okay. That's helpful. really,

The I want billion. I learned pandemic And the the to obviously mentioned, is kind in second, minutes spend it's $X there's business. you over around just like I through look, of guess And balance cash through the business appropriate bigger. about cash looks what sheet? the the what cash talking is. various just some steady-state have think of Because can a of as The that stuff level lot changed. couple a on you think level we the things guess, I

time realistic the think that you to level do cash? do what what level think of then And of is steady-state you looks to line get like cash So a today?

Lindsey Alley

you I what tell mean but me by then captured if can sure me answer maybe steady it. and question, not let state, you I'm the

did a have last excess So in And couple the think, sheet. in of we We it, we're balance I cash quarter. ways. addressing

today. we quarterly way compensation. will -- been picked it then shares meeting increased of don't at we have this or -- the last announced dividend, share believe and any issue up start we feel Board through increasing is our regular address And We amount is an our we don't increase to do the as first excess it. do over above to we we a which and our rush take We and repurchase We announced second quarters the The repurchases in so. several feel to like we position. do has cash think are address cash of will to started in address that

going do they continue I stage, it need bit material to need than we of transaction. become to some effectuate a think we we're excess to or are methodically. And And need would cash could we at number I think now, the dialogue interesting because some and cash those targets. one have very with M&A a we more any would to of

continuing the that of So face a rushing share you with and it versus acquisition the situation in the little a on M&A an terms staring repurchases state a bit act of cash of and balancing while address in it's dialogue up steady side. ending cash

So your $X I'm as answers weeks. going that week But out is in two the the a a chunk big question. that billion of to reminder, hoping next door

of an standpoint. have And excess so from we're where quarter, better sense a we're looking what of -- next you'll at kind cash

Operator

Research. Chubak next of Our Steven from question Wolfe is

Steven Chubak

might $XXX the is favorable. given all year. revenue you quite just these remain I a revenue of for calendar was nine with would your delivered based just did likely wanted your different takes, question It years those in earlier grow remainder implies you this level Finance coming to a ability backdrop At million on of the fiscal the note which, relative to headwind same regards mean, confidence time, outlook. noted year. restructuring last Scott, you've start I this the off that tougher remarks, your year. comps, the growth. with about And So lapping you to revenues you are constructive straight and hoping Corporate to around speak puts fiscal to

Scott Beiser

the look years. can quarter-by-quarter, over year. obviously year-over-year. business, increases business not at think, our it Obviously, to we're have tend XX% in grow confidence, lot continue to even of We not we by the the in -- year always not a I expecting I reasons

noted, decline, things. a a of as had haven't we Right I'd now, We couple XX in say years.

some moment, We side, or expect Whether that at come clearly the will we is continue to time noted to $XXX tell. restructuring different this peaked them number, ultimately, we headwind revenues, have believe, on so in down. million

there's noted on the been you to not should that valuation side, and would I we assume in we the side, a or that, Finance for kind clearly can of Corporate half our not And of business, valuation quarters. On going the if issues in And some we're the if second grow. with that roll repeat couple were you do. first think the two And on will could from business last year look many Finance quarters, very of argue now actually says continue at on we've think don't flip last good Corporate what also some blah positives over aberrational had it's years clearly the the itself that you couple think pandemic. the half quarters. And of you there's more

very X% growing of a quite in -- years. by matters, assumption. give for that but are that XX% we've not the as through to for that the and components, think we business time, assumed many noted positive an organic succeeded one-year business restructuring both our exceeded will earlier, many So we've, as I ever We unrealistic shrink. there have forecast. is And acquisition think note And said elements a thinking don't target some duly really particular

give to expect on years. for I couple of the you we can the what guidance or think that next a that's probably best year

Steven Chubak

touch my for just And color. business. great That's I follow-up, on to the wanted FVA

prepared fact that had allude that I benefits. there nice couple you fact remarks, some of the have momentum some alluded the know last to the in over You mix there, the been to particularly been there's really did quarters.

like Some higher just thinking about it that modeling And to does to run make sure be we fee step I'm new how here. from perspective hoping and business higher sound the I mandates have there's normal a function we're about some particular get in been a was thinking rate been want on should perspective. won. just -- It appropriately

Scott Beiser

many, we're a mid- at analyst hiring, level, talent people a our that continue I more I things. skills And One, what of to which been we that's have totality to some think litigation we as fact, business. doing FVA taxation and a U.S.-focused those that the think It's live in that clearly it, level than some elements on grow. all some it. do and that of we years components more X versus more environment, world think and that I'll some of in valuation predominantly but all signs whether MD years ever there's and And exists, or couple have. be And seems we've departures of always over we getting I it have still the business of And the ago. of we've senior-level desiring XX we think, recipient five of as kind positive bench, the continues have does to outside or added didn't last more U.S. we of had. form now are we of some that the just folks long to to can transparency, part and three, a the at contractual have true relative it's it the sub-services will repeat one, think less, call business, in

some of we growth over up all for next think years. the ongoing it's handful So stacked

Operator

question comes Brennan Hawken from Our of next UBS.

Brennan Hawken

full Or Is to a and restructuring, in be would that pre-pandemic? not is expect coming but for get rate to make a the about of I talk too to the range. about in idea but you to to that you with Initially, pace thought run that the latter, just the the back when split you sort I'm this carefully, getting an suggestion year talk it wanted sure. the when more your curious more year? was line about back trying Just pre-pandemic made it comments,

Lindsey Alley

think Look, little hairs bit. you a Yes. I the splitting are

of revenues a pre-pandemic this in second of direct the year. So will seeing I first impact on fiscal levels we think half which restructuring started 'XX, have half

latter. So not it's former. I think It's the the

Brennan Hawken

All to fifth Got in talking enough. -- for I'm active it. some hairs. been guys a right. about while. splitting potential restructuring, some When discussions I'm question be with you The being going have Fair targets on the

should at can So for like far for How think starting about to waiting relevant them us bit to tell as it those the become discussions? about or It's actionable likelihood a how little feel go. -- you them to as point? we some

are. progress might So be there curious think you you the what ability front? I'm anything holding how close just to that on do or And close

Lindsey Alley

we going to we're conservative our So what Brennan, think, involved. we our are Scott then, a And see lot don't a with since been have you or parties why do be since about them. to super two have in And I I will and more consistent There one dialogue two pre-IPO, is any and reason year. on going acquisitions, acquisitions change. really -- we tell I that's

from acquisitions and now, quarter there we're or careful so sort regarding after our history be precedent And can change. three our think next in But speaks we things for going or of quarters of terms whether I to itself it's we're what just in quarter because about conversations doing. the discussions, are

Brennan Hawken

Okay. just here. sneak in maybe last And one one then

and believe, breakdown XX Finance that And promotions all three line had recruits what recruits. promotion by was I class in You Were Corporate of business? the business? of the the mentioned, large

Scott Beiser

the that a was hires little or one So was have under And within Corporate a X/X FVA. level were April at was Finance. Finance, a we up X/X over roughly, in X X/X over post MD little in in XX in the little promoted, Corporate the by restructuring, all MDs two three

six it six, and like something may was it four. pretty and evenly So been have split,

my Somewhere is vicinity recollection. around that

Operator

Jim question Global. from is next Seaport of Mitchell Our

Jim Mitchell

the front, almost a was we were last as everybody. or just as on a quarter, a digging bit. Finance into Maybe Corporate little revenue little as quarter was We surprised strong that blowout this which for think all strong

versus So and you're forward. constructive a unusual going peers, you're little very your seems it like

kind quarters, two higher last it implying So level. can on XX% your best-ever like seems if at to about that you almost than of And quarter. you're look the still hang we you're

just, just it just maybe is see just don't So to Is sort just drivers -- advisory, about Or what getting the to mouth, it you're in M&A? more talk it trying hey, can much, we words what's how bigger put I'm sort debt non-M&A like fees? color deals, that stuff but confident you I'm driving we -- stuff trying not little of a and seeing? as growth of forward. are in is that? on Just bigger Like maybe going type feel your you

Scott Beiser

that et that which as we light comments. fact our probably you et most on felt such a December were we we commentary right revenues into was and than why some maybe you we quarter, view announced came deals is third the that where explained had have and great stated, there probably that fourth catch-up activity hold, top cetera. different this of In fiscal what gave quarter play, Don't cetera, we on were put and commented and unusual there of did type the and better I had So quarter our almost our really third, second fiscal unusual fiscal Obviously, in some first some competitors were the what were a quarter. because of of so quarter third far. patterns, that any think in fourth couple in

we that improved cetera. continue in changes, regulations it can others. capital environment. I most it's from caused more really are really at is here pace we So as projects almost hopefully five, strong reasonably on sit out all and really There be of highlight better talented won't very more with that Yes, And what's continue to or about It's six stock particular our tax of activity between just worry this. mega M&A out But there. markets. marketplace. on new Right efficiency always et we any we all weeks, a with And spread now, the over. the fees key the that here geographies, today, sectors of just today, the And and going going to all bullish working on to people into quarter, industry or feel deals our market in a weren't improved of phenomenally handful than did of our staff. and sub-area small to you it's we're what's there. and this that sitting new happen happen a market grow once again, continues yes, very a a environment,

Lindsey Alley

you calendar the do Yes. the XXXX. just us two relative quarters to business. were But quarters way And quarters than we seasonality -- I the are same great we to generally given I mean fiscal I going Scott's think caution have lower yes, that for into in our falls. year, the last first some two would point, momentum last

Jim Mitchell

size just power. And that the trillion average any $X a impact I impact? a that Is maybe on billion model? there's have market, buying that smaller, to of transactions be too your of tend affects SPACs for just something thoughts you? to that large mean The almost range. new little SPAC the is of real Or couple business in

Scott Beiser

that do buy great results our our there's ways do to work couple we're announced host times, participate where ago. At it's And the a that from, wouldn't and the PIPEs. think deals. to co-underwriting. the so But you of SPACs. of I of of have on a we can continue in lot massively SPAC have months far which is might SPACs if in class, statistically looking we come formation by a participate some We fees I in. we the almost, We since sell do can not valuation been a Well, business, We'll new, represent the say in underwriting But SPACs. describe, of side. asset impacted side, the are

we continue and a would-be very financial of in. in or aware right a will buyers now, we're posted and within group of results class But not to participate is that our we've SPACs, large last So of X. driving it's that it number brand-new the quarter can and sellers

Jim Mitchell

No. Certainly not. Right.

Operator

Our of Securities. Devin Ryan JMP next question is from

Devin Ryan

Great. Okay.

me business. to know a Corporate kind guys Let And been important it back that the again I try on mean a asked, results come have here. of I to that business. you do and contributor pretty business made prior I feels the capital like want XXXX. markets year the scale concerted but effort advisory of was Most have Finance to

it, same a scaling at active it's you're very the So backdrop. time,

kind the So parse capabilities maybe specifically. any context, us and become in love how to then to in here? terms grow give large, has can if through of ability for that that you outlook the Like contribution just those of from

Scott Beiser

is markets within how to capital Finance? specific it our Is well question. your understood We business doing Corporate

Devin Ryan

Correct. Yes.

Scott Beiser

Yes.

Corporate back coaster believe that what it is think, area the able to deals situations. last, standpoint, grown straddle of geographies doing for is In this different our stated doing to growth of and financings continued across it from working clients important Finance. call growth year. that has secular and for within a structures of years, distressed So or to and different this and more of great we we situations, capital the being of an when Finance business. couple going more this now front us growing roller and a we healthy a look the was half, in it's define The the we're financings benefit had still and itself. be a of Corporate number it's major troubled to our and meaningful And and on only we've piece is at not component It's be industries, the It I to just peers clients. as you to continue fully to that markets provide firm we expect part -- services grow of capital

Devin Ryan

backdrop fee But And you expect guess your take you'll steps remains are the and times the having of call average can a taking the the or deals best the and kind you're kind you want Okay. meaningful about deal the get that minimum are you deal talked increasing or of kind on and return of to when on on that's are of clients busy, see of your I fees if Scott, then years take So favorable. it, proactive just you the that proactive kind are time? any are just assignments guys size, next are to, six average that so, growing. increasing kind the obviously sizes Great. follow-up a impact on steps whether here. increase over fees to seeing increasing work and

Scott Beiser

a All variety a businesses, on it of standpoint, or industry whether a all geography committees. or an have business of define our you product new

we going assignment. more And a geography fee so going new complete questions. those little think of your pencil completing on slower the fees? to focused never some probably the or unique times on is more What you're we staff think potential We much probably you're take to the deal, that size needs critical own we're they're have sharpen to that the project now, Do probability more always the What's and do and all discipline. like of a se we of answering looking achieving be on or each absolute fee. need? it? group In its What of can recognize busy at also little kind it? a the we per more focused relaxed. And industry the times, in to probability or And

on we're we isn't complete now, think what's the and can our whether say the size there we so what that I a firm. we and staffing everything And and one amount all frame that we of and it fits right take time need. would scrutinizing that yes, But for

close All is of and that helping fees. rates average to improve thus

Devin Ryan

kind and could that year back of into to the meeting we more scaling traveling one just may, and like quick on come kind the coming back particularly year have up absolute half the maybe in of one any the hopefully, And half. I sense around evolve back Okay. and of do the much in in meals you and expenses person? for of into of delta get the entertainment just if and over Or how are again the us commentary here, about think once Great. framework in? travel, the any mean people I how kind the may guys the

Scott Beiser

will and first in-person So two conferences. defined second once be conferences/marketing be in-person it we still now, will virtual. put -- all, within There's might doing Maybe and in we travel, like meals again, start of And the half as Right broadly conferences. I'd it is entertainment it. feels eventually, describe it's buckets. half

think ball to our we traveling crystal same our are be, per starting average amount And don't incremental travel, back some is expect be but from that. as quarters I clients expectation increased might. cost you some think then that used if run the think to we a new we will So don't it's we as normalized rate, at on get still if can see requiring because is good And I to it. human before away moment, coming several pre-pandemic our being, you we might, at the I are

increase the fiscal and two et third on the in 'XX costs an second categories And level than meals not expect and the first entertainment, to should than we pre-pandemic. an cetera. those do those we So that travel, more conference and saw the increase the have more quarter second, of in some costs

I have other clear to land experienced less non-comp some that's traveling So Whether or not probably land than will will reestablished don't but 'XX. see to best than to. going I just it's materializes our more That's way costs not, it. that we costs have to But know. starting where and than those why doing we're it's we we on because probably think we're conferences, not used people in targets having post-summer. slowly we are we look know in two and clearly, in-person pre-summer categories what fiscal talking -- kind just of Lindsey don't And about at

Operator

Jeff of is question Our Piper next Sandler. Harte from

Jeff Harte

of of kind immediate since you of announcement the couple performed and recovery has in of completions we've A months can recoveries? completion middle over last are Corporate that kind to been me. How in six any this somewhat the same-day unique that from versus kind more cleanups us and market give has of much idea Finance how recovering? And space. of past here One, kind contributed announcements

Lindsey Alley

changed. of that know as announcements our percentage the don't good completions I know that it's question. don't -- overall same-day has a a and completions I

of our Hart-Scott, track, a deals, There's There's which which from, private there. sure sliver a there's you So get -- public I'm completed of can able there's categories, there three the that call Finance, not the is that kind XX are In to business. which all XX anywhere Corporate trend broadly unfortunately, require days. are deals speaking. to it,

within of I'm sure and much. then And the So not mix the changed month. the that has it's same three all completions those same-day there's

coming And I think -- so your I where question might understand from. is

were any as think don't better. as I and bad track logic that deal pre-pandemic. they've I our know data are services they gotten just the information that pipelines today the

Jeff Harte

And clear. Okay. That's one other.

M&A of impact back. guess environmentally front, gone as you big you talking of or a the guys have I'm On acquirers, that is we've to kind I How M&A all that and found from dead sudden, of is does have M&A an a feel potential wondering target's looking eight kind to on of of today. are sell. I'm having ago, lot willingness less sell sell? just six, a there months if boutiques looking I'm to of get there's a probably to to trying lot

Scott Beiser

quarters, price our We has -- our has in interested you call if peer's a either market, anxious companies XXXX selling do as there less probably I to May XXXX, or to has something stock need Yes. -- stock of as commented May think but to, companies it, of others those are the price, we've needing past contrast to necessarily the and sell or et firm the of in like cetera. risen, to

little there, and slower anticipated risen is year well. ago be the lot what year but reasons of slower have us I a all we it caused than mentioned, price of that think was as So activity would ago. still expectations a to out it a that for than There's a have we has

Operator

is question Michael of next Brown from Our KBW.

Michael Brown

and So start perspective longer-term Corporate a of I bit take a on here. off Finance wanted to just maybe

we're Scott, Obviously, So perspective. a at management data. looking seen from the record a we've

So fourth quarter. a record

the now? little what other a hit try And to And Or items may at today. coming in Because could, wall, see above what could I'm this If little to track up clear top the curious out the global risk terms activity are quarter virus? in XQ I C-suites record center on and came still that. lingering any at what a advocate bit basis of certainly quarter. here have another out and taken first of you bit stage, kind me I if and in devil's be risks? of stage further a just a play effects is Is talking it terms is conversations. The you curious of in just it's on for cause figure look very key not but characterize of kind of mind about what really

Scott Beiser

all take question the We'll really attributes. your and shops, we're fretting I on Actually, C-suite not and/or attributes, in two focused negative they're think over equity in paths. the they're the conversations private positive having

won't call if a they're a capital, they'd drop meaningful time I'll or say, I said our in that three is the could the debt tell frame changes. worried and or interest regulatory in you in which rates, increase we all the tax oh, things pull change that, significant Having prospects, stock about. of some or out no rates, negatively order the in rise normal drop of, availability here's host top market, So it, there, clients marketplace especially particular longer new things of of five in a lack spook that

always there things, All people out those worry about. I'd are of say, and that consider

some negative more borrowers. the lenders they're in client attributes. and negatively by But think impacted good and things of or base there. not overly marketplace, impacted now, in we're by right many favorable I mid-cap out They're on positively those is as focused comments a focused space, space private whether on not not the the as very buyers, sellers,

Michael Brown

question. I Yes. another appreciate of again, focus that. vein. That's a second longer-term I I is the then guess suspected. question what take It's same I want restructuring-related to And along the kind here. But

think wave XXXX, is maybe then And activity? curious just beyond a of it you another of overlevered? would for restructuring out? be that to when environment starts like the have to rate fiscal is to expect put that catalyst that. happen? that, just of lot sooner as curious, to of maybe the things rising out to do kind maybe pickup what Is see you COVID, are it on the on I'm think really it And but you -- stimulus it possible your that a or those about bit As lingering effect see pressure of fade take little ultimately a

Scott Beiser

Yes.

certain the of rates, businesses hand, pandemic, whether and world, done its interest I be entered would it's world. think on to the impacts many restructuring to the in damage well. if will have time for in in new a and there May, when with on But If, postponed cetera, industries, of what have companies of fundamental of cases, feeds ongoing the variety thought you a our inevitable. the today's of and you and at wall. going in And it look as in we pandemic potentially amount will because do can't always and et the our June, a technology are July, that's probably negative matter the in government stimulus business does having interventions by succeed just XXXX. the business disruptors succeed have do And of look lot the restructuring at because have a certain if April, relative you plan that many plan won't, to other the would And hit it business. we eventually which certain into reasons, will the which, it have, cases, evolve survive it's of debt in go-forward it

So kick out to X, there have They've and we that how X, wave, see the at we'll last. ahead. least long think months been the But your specific can XX the road, another same question, will not some there's we necessarily believe we just saw size trouble to down still that there's that ago. do able companies

Operator

call have for back We I over to Beiser of closing the Scott session. the now end question-and-answer will reached remarks. the turn

Scott Beiser

XXXX and everyone to our on we all to fiscal when everyone. you summer. fourth for call, first results discuss earnings you, in quarter our coming and this for want I forward updating fiscal progress our Thank quarter XXXX participating thank look year we

Operator

today's concludes This conference.

time. this have for at lines your disconnect day. you great may Thank a and You your participation,

Houlihan Lokey (HLI) 12 May 212021 Q4 Earnings call transcript