Houlihan Lokey (HLI) 31 Jan 232023 Q3 Earnings call transcript

Company Profile

Participants

Christopher Crain	General Counsel
Scott Beiser	Chief Executive Officer
Lindsey Alley	Chief Financial Officer
Brennan Hawken	UBS
Manan Gosalia	Morgan Stanley
Devin Ryan	JMP Securities
James Yaro	Goldman Sachs
Steven Chubak	Wolfe Research
Ken Worthington	JPMorgan
Jim Mitchell	Seaport Global

Call transcript

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Houlihan Lokey’s Third Quarter Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. conference being this XX, today, that XXXX. note call recorded is January Please

turn to call Lokey’s will the I now over General Christopher Counsel. Houlihan Crain,

Christopher Crain

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

are discussion These remarks, or begin need not to expect, which the our forward-looking that performance. statements. forward-looking formal will, we of identified guarantees of today we other use include Before everyone will as are by words usually statements, remind future similar such phrases should anticipate,

are and actual you and that statements therefore, These differ relying risks exercise we to could results when caution on expect, and should cause them. interpreting uncertainties materially subject numerous to from what

of a for XX-Q, our could and quarter all is December to encourage SEC refer risks more ended for our investors detailed you filed financial future it to XXXX, recent that the of XX, SEC. Form operating filings, results including the the We impact our filings with when the We condition. regulatory discussion review

During earnings to financial our we can website. company’s a substitute financial measures, our useful results discuss our on most and directly will the reconciliation believe measures GAAP prepared be GAAP. the comparable is these today’s measures financial in with the isolation in in release accordance investor which of evaluating measures should available A hl.com These or as we presentation be performance. not call, in non-GAAP considered for

the Officer; remarks Financial Scott Chief provide have we Chief Lokey’s we company. call of open and will call then They Alley, Lindsey opening the to will Executive Hosting the some Officer and Houlihan questions. today, Beiser,

that, will Scott. over turn the I to With call

Scott Beiser

were $XXX same versus third per year Revenues our quarter to of share and down everyone with down of $X.XX. revenues the XX% call. the previous the XXXX Welcome earnings fiscal quarter and Christopher. you, adjusted X% from million We ended year quarter Thank earnings last quarter.

bear quarter, mind XXXX was When quarter comparing extraordinary. our December in that third last to year’s

was previous firm’s In quarter and year revenues history, fact, adjusted the higher in prior quarter EPS. than both our substantially in any

external numerous the the market seasonality our trends year December and our M&A consistent This globally. the altered are of have typical results market September industry less our was XXXX Furthermore, quarter. XXXX factors with that than quarter

time our lower first the than since quarter results is were quarter This our results December December XXXX. September

we firm’s While the year-to-date this our are disappointing, nine-month quarter’s are financial fact history. results results the the in best are that by encouraged second

million. quarter reduction in Corporate transaction saw quarterly quarter revenues average fees. offset closings increase $XXX We transaction an this a were Finance versus last in by

robust fiscal this was New number as year. a of Business the quarterly activity new remains high engagements for

financing, The Partially some can broad-based opted believe lenders positive Mid-cap sidelines visibility in confidence get selective. offsetting perceive these a business the in more of there on factors that challenged. still remains once demand lenders resulted has the debt more economy. have transactions This to up is ultimately cost in the are market positive economy. they financing is be our but significantly and on we M&A, which for until is the better will sit pent-up

lines was transaction the advisory decline recorded reduced public activity, Advisory and versus M&A Both opinion were by especially The same Valuation million by transaction in primarily in in last quarter revenues. affected in revenues revenues $XX the and lower year services. Financial service marketplace. driven

volatile benefits portfolio well continues service our a certain in more do market. from line and valuation However, to circumstances,

another $XX quarter. produced million Financial of very Restructuring strong revenues,

an quarter. For engagements number increased of versus each Financial closed year, of transactions prior new this the number Restructuring quarter fiscal increased an and of experiencing

calendar new this segment the year second business calendar in half Restructuring confidence in our business the continues XXXX. adding of to strong activity see and to throughout

major all across broad-based is Restructuring Financial most geographies industry and sectors. and Business New

Our to long-term have hired Advisory, continue digital announced pipeline business U.K. of and quality managing acquisition directors robust and quarter. in We infrastructure we both acquisition the a of internally We a the growing targets. on continues. focus five this Oakley investment our externally banking firm

wanted to today’s end comments Finally, exceptional with continue to clients that the segments all I and business of shareholders. to three recognition a deliver to our results bankers our our and

table and regardless for based string we on size In calendar was transaction all continued in of under banking the firm one global XXXX, billion as ranked Lokey M&A our investment all league of transactions successes. number the transactions U.S. volume. Houlihan $X

in volume. for both are We all firm terms and again investment banking Restructuring value one Financial ranked transactions, of number the

most In addition, last as the by measured period for when were volume ranked the firm years. XX the we active opinion fairness over

of proud we us in fundamentally strong are our positions business believe long-term and growth XXXX that accomplishments our and returns. we Overall, for effectively calendar shareholder model

that, Lindsey. to turn And with I call will over the

Lindsey Alley

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

Financial was period quarter, Restructuring quarter, our an average year. to the in lower. in same revenues closed year last transactions were XX% fee closed We $XX from last compared the period deals the transaction same on XX% million increase XX for the and

for same XXX were Financial period Advisory, in same the period decrease the In year. during $XX to XXX million events the compared and fee quarter, XX% a the from We quarter, revenues last year. last Valuation had

same down influenced lines heavily for the versus in advisory was quarter activity the FVA’s quarter, M&A opinion transaction year. the slowdown last the service both transaction quarter by were and

expenses. to Turning

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

to acquisitions. adjustment million deferred payments certain for was $X.X only retention related Our

XX.X%, year. Our adjusted for compensation expense third last as quarter was ratio the the same

for our norm have for quarter into quarter. TM&E quarter. relating million Our XX.X% $XX expenses flat same year, the of a a adjusted operating non-compensation believe the were in post-COVID and non-compensation ratio expenses. the that quarter, This to but other increase versus million settled an $XX over expenses last We of last resulted non-compensation

in we We firm to continue on expect rent supporting to pressure a our grows. the inflation, see general of growth additional technology as invest and point still as differentiation space with and

to continue the for was non-compensation increased our lower that We what long-term of be believe will it size business. our pre-COVID ratio than given target our

we seeing some ratio However, given the current are pressure on that climate. this business year

we was For the non-cash GCA vast in majority to adjusted expenses, amortization, the amortization quarter, of out $XX.X the million non-compensation of transaction. which acquisition-related related

period decreased and the out quarter expense and of down income to our expense wind related year. We approximately million other of approximately same co-sponsored. $X.X the adjusted versus million that of of we the to income the $X.X for $XXX,XXX last adjusted in income expense, SPAC other an Our

Given is our no remaining the asset to wind down, related on sheet. there balance SPAC the

quarter rate for when to was to the approximately XX%, tax compared Our compared quarter last same XX% adjusted effective year. the

tax Although, we of long-term to tax our received reduced our target XX% we between rate for some range benefits effective a and rate, this continue which quarter, slightly effective XX%.

Turning to balance sheet. the

As approximately had unrestricted and of equivalents the million and we investment $XXX quarter end, securities. cash of

in As of during our third XXXX. quarter, cash cash accrued typical November by to is the bonuses payment relating affected year position deferrals fiscal was a

of repurchased this price as approximately $XX.XX shares our share of quarter, In average we past share at part an program. repurchase XXX,XXX per

look maintain repurchases as disciplined sheet share we flexibility. continue balance We to to regarding be

and and where also the a approved Committee directors, March Nominating effective Board solely Finally, dividend to Committee. Compensation comprised structure, will Committee our our quarterly change approved consistent be Committee to immediately, our be Board of the with paid and independent Governance our in Audit

with questions. for we can open that, And Operator, the line

Operator

UBS. Hawken will Instructions] And first we you. with Brennan go Thank to [Operator

Brennan Hawken

Good Lindsey, afternoon, Scott. how you? are

Scott Beiser

Hi, Brennan.

Lindsey Alley

Hi, Brennan.

Brennan Hawken

thanks would for the Finance. love I Corporate So taking start on question. to

thinking more becoming how the M&A? -- is in financing far, clearly, that should so change there here that from December the about But outlook we to was mid-market that challenging here spoke any have so and continued how availability XXXX, you how and been for has So any banks, change noticed quarter. has early you trending impacting be

Scott Beiser

financing front, the the I’d we in improvement financings. during have On month versus previous seen a January slight quarter the of say,

capital December just them XX. deploy not their there books I want lenders when did some were who closed to on think out they any on

say, I’d opportunities lend, challenged open-minded they rather So of more terms it’s but in marketplace were, that’s out slightly still a to finding there.

Brennan Hawken

the down in challenged as our goes Corporate M&A? as far as we toned Finance markets Okay. long expectations And therefore remain should keep so financing

Scott Beiser

the new it, business, yet, of continues a there’s actually But on, in months, several come pipeline, not going our borrowers might grow. the by together. positive I’d amount say buyers I’d willingness really lenders sign. it’s for seen to the whether count definitive backlog, which last and size prospects, you That’s last dichotomy the have of and or a marketplace few sellers say, the to quarters, however, the turn very

for pace got business the just are have not So would the transactions we are think typical occurring that signed the we occurring. is that already at up. They size

waiting seen a turn for to at we haven’t eventually still improved definitive in the yet. into think I marketplace as So of turn pipeline that are just revenues, least all but ultimately

Brennan Hawken

All point upward a be to use follow-up that. normally, environment, bit boring M&A which a little where reliable to XX.X% and in that starts for point concern and be, if there you would continued it thinking very boring? to I’d more Thanks we become love a challenging my short-term? comp of it pressure, maybe and do ratio to particularly very predictable, in about for How we some least Okay. segue that and maybe climate any a very your should there as see question, That’s appreciated. is begins a the right. for bit less becomes Corporate see Finance, which at is

Scott Beiser

have and terms think almost not gone as within tight year. I anybody is the range I tight is, what much it’s payout our of have we public, had can we believe to in all typically we ratio as very a point it’s since or and year-to-year very

say it’s that still the I we it never results nothing change, we there’s as foreseeable in marketplace see can with but sitting going see business, as the we to our think you are the now of will comfortable don’t And I the future. here minds in that suggests change ever think, right our XX.X%.

Lindsey Alley

that And well. us XXXXs the to managing precedence and a I’d say, there’s of of two range kind Brennan, in even as recessions fairly early pre-public XXXX, tight occurred

certainly us the next Scott, So six question, is what to I with nobody like. look we I help have think knows history agree answer but to going months that

Brennan Hawken

color. Thanks Appreciate for the Okay. it.

Scott Beiser

Brennan. Thanks,

Operator

Gosalia Manan our And with from question Morgan we next to move Stanley. will

Manan Gosalia

Hey. Good afternoon.

fees of competition? that about talk the driving that? more were deals? anything just should Can Is we forward? this a lower think specific that Is Is quarter. going it lower how transaction noted average there You it you size about

Lindsey Alley

pretty I going basis, the consistently I’d and increased is about say, average forward. really have random hard to over period. be transaction that over back think think transaction quarter-by-quarter. an you of a average if We it It annual time XX little fees our about think kind to on it’s going years, fee last we look

just you numbers. quarter, at It’s at in some store have size. will obvious swings I’d all to was sometimes you is the if the unfortunately will but you here long-term and quarter-by-quarter, the based see say, there trend continue no look on swings

Manan Gosalia

And M&A. in also about demand you pent-up the Great. spoke

just is ask stopping what their talk how that’s the right hikes rate holding get and So where the as back? clients are the from we it really financing you and you on bid -- maybe things closer sell about expectations to hearing buy now? Can market Fed

Scott Beiser

Yeah.

that economy availability rates where are is are to a views think is different the going, transactions. it’s the people’s on and think I close decisions where combination, which willing of expectations near-term a the company’s and one able impacting earnings, people financing and of valuations, people interest speed thing, all is

Manan Gosalia

it. you. Got Thank

Operator

move open. [ph], is line W our Matt we next [Technical [ph]. Difficulty] to And on your will question

Unidentified Analyst

am I sorry.

Operator

Matt. ahead, go Please

Unidentified Analyst

Hi.

but believe I think out I here. second, Good was called afternoon, you cut for I guys. a there

Scott Beiser

Matt. Hi,

Unidentified Analyst

cycle. like I feels one for time. the expressed going? quarter a period elevated Restructuring Hi. on last that just this optimism could some cycle of prolonged overall is Just have be Restructuring you How what

a seeing a stands least related flows Just shifting on the that, are news of take for regions And terms impact pulse a Houlihan? that have areas there’s more what think, directly been standpoint, industry wanted some lot just space. crypto as headline that activity and where of the maybe landing of I soft guess in to like seen kind large you your from given in at challenged from you I the impacts more expectations you maybe of recently? guys, even But verticals to today, just sentiment given that curious what

Scott Beiser

water optimistic spigot. it as think more we of if are see a So, overall, of we were than say, forward I’d I’d quarter going we Restructuring on kind as a it continues two or you to quarters what just build. with say, ago

It is to opening full-fledged out a of globally. Spring in the a and full fully Restructuring keeps maybe expect like we it XXXX but of of just or kind open up we see a little it’s more, saw flush not and Recession environment more bit XXXX, increased Great a don’t

in So whole United and litany not industry. don’t a parts the think really Europe and but particular the world States, almost of other impacting Asia, there I only a is of Western leading industries. all it’s

gotten industries. out of continue many of debtor to pieces outside U.S. different side, on some obviously the or just or and variety and our business of one many, has a which it’s Crypto, build we but news, U.S. see credit the there a of whether side or it’s among

us be in movements leads environment will interest believe least maturity So the are, where for Restructuring at future. good, foreseeable the the expectations probably, for to and of that where all where Financial just wall, and rates is, a marketplace of that kind ending is, financing it never the kind the better

Lindsey Alley

activity Brennan’s which we that’s anyone how in are is in Finance we just Corporate going question, was not the last where think increased in but just circumstance seeing we are months kind in to the should Houlihan probably industry the XX which quarter, last And quarter to for back relative unusual activity increased the to relative question, next and million-dollar M&A the Restructuring of is, for over which unusual. about an and

the that there It landing not population way half out there and that half going happen the the believes out it, population get in thinks soft is, just normally that and to it’s does there so ugly. call

back really see shows and that And Brennan’s so go inflection some direction. hard until answer to very question we point a

Unidentified Analyst

the about just your second from sense. capital Yeah. of the Makes and quarter keeping that I light know coming buybacks. announced this gears, relatively thinking switching be this for you priorities of And flat then would you guys kind just quarter, of kind dividend quarter here.

as made should pickup we So of acquisition, kind the quarter M&A just there’s how any priorities by targets, last Advisory of coupling outlook a just conversations, the I this there about kind with capital but as from well the overall, I acquisition. well on updates assuming as with more of am as comments conversations curious citing specifically? Oakley still here, you on way M&A announced guess think in

Lindsey Alley

will priorities. So just I will with let the and capital Scott start question handle the I M&A

cadence on back I you increase and dividend, be to quarter the time, it which is is think to in this dividend QX, with our or if would so any next respect unusual go just us this quarter. effect quarter our the normal for the dividend have

to think, With be going of for repurchases. respect quarters with repurchases, couple respect to out share the last called we to that I share conservative are we have

strong balance you and to As you as are too more are dislocation, comments, like bit tend in have is -- markets probably saw do heard way and the it’s COVID during from during in M&A we like word, a going Scott market, dislocation we like we what through a see through this sure the now. in that prudent, a activity I going his sheet think, stubbornness through periods not the so going we but flexibility, making

for that’s And activity, going shareholders We it think then have answered allocation most that think, money of important to M&A is through to is for acquisition priority That respect capital and I kind us like strategy. to us. a accretive put an I with continue to the I be question. our feel work component of to to

what highlight respect about. Scott, with we can seeing are talked what to out some of think he I there,

Scott Beiser

interesting know for everything to whether are we organization. time none a all marketplace to a we of talking a line. will acquire them to or as and us additive close will never our relatively hopefully different close and still We are businesses principal experiencing think I active take they

kind probably. combination factor So or what in are, needs a tempered factors bit variety as of of cash probability our our that’s over of magnitude in I repurchases looking quarter It’s we maybe Lindsey a the have other at are had of think, two. said, to that we closing and some last at, we what of looking a try of assessment what the are

Unidentified Analyst

Great. Thanks, guys.

Scott Beiser

Thank you.

Operator

with go Devin we Ryan next And Securities. JMP will to

Brian McKenna

for This Great. McKenna Thanks. Devin. Brian is

largely So pretty way. the in this markets fold credit private are a but shut, syndicated are credit filling markets functioning are the still and meaningful

of impacted and capital this kind over does this has and how So your what for opportunities business this create markets near-term business? longer term the

Scott Beiser

that financing that So that have short-term, to total willing some capital the provide deals in able number sellers and or negative markets is of down, total reduction so players pressure business. number willing of got buyers puts on and are our you the

to that in we for it’s themselves here private capital, the CFO think, can it what’s believes equity rest banking of firm, Effectively, when On participants. said is we investment competitor the always themselves. or not find long-term, going they to he who and a she fact, it our our good typical us another harder industry do the is can occurring be or believes do have it’s firm who it’s

little gotten to So more last things people ourselves institutions like as a have year, seeing difficult them. that for are financing we over to turning go more the raise

more marketplace, said, So long-term, what will little a short-term, time to in specialize a what compared probably aging happened the but still period of private a we what’s much in is think the XXXX year XXXX, we positive happening ago, like financing like which trend result is rocky in in. actually for a I

Brian McKenna

incremental of But and deep thinking you expand business? across growth can you then bigger that do sponsors next capabilities. And to sponsors have relationships some picture, with related longer just about else growth Helpful. could leg what continue clearly Thanks. the drive with the term

Scott Beiser

are all, we then will financial sponsored out East arrangements and continue have rapidly and in of cetera. and the Europe et we our pace very we in Middle Latin think dominant been that U.S. in in the and So, growing first Asia, and America I successful

have. So there’s that some we geographical expectations

And we of many can incremental provide to sponsors. we continue services that financial these types to find of

of or want of So fits it long is part that could to it they services that’s we kinds what growth have what the they as as learning the strategy. expand, part and need of continue

Brian McKenna

Nice job.

Operator

James move Sachs. with Goldman will we next And to Yaro

James Yaro

my Lindsey. questions. Hey, for taking Thanks and Scott

Scott Beiser

Hi, James.

James Yaro

seeing and I sponsor just of sponsors, mix next the the you here. the versus might roadblocks -- deal with what in sponsors for Maybe to this among over, say, across just they start engaging versus could so? differences wanted let’s strategic clients strategic your years strategic and talk the are about or point mean to closing making transactions, where two

Scott Beiser

are just them. more want buy I think of raising our over for they or in or to probably given get They any do are There don’t started still financials book major point approach the when last the Yeah. we or are on more active in it’s side expect it. time particular see see small important. trend at want versa. or to in in have when a taking still deciding years still than to business couple we they money. sell sponsors be they when quarter changes are waiting and vice financial more key they of They But sponsors you of They deploying marketplace, of what times whether continues the incredibly what experienced the side. are

the So industry at and think we of an business large. part for our still it’s important

James Yaro

you just creditor traditional on most ability about the on they side, there is of debtor of announced? these management contextualize mandates more then And any are Restructuring are Is sense. That sort business, and or new the you makes where talked liability assignments? side seeing then it being Restructuring Okay. to

Scott Beiser

oriented little probably, tend work more have liability In might to It’s a ago, of globe, a upon filing. debtor transaction really it’s recently. sometimes immediately maybe depending quarter the a into little It’s maybe creditor, the that oriented, mentioned. a different the a and company better right of bankruptcy sometimes in had been that more lead parts particular more active you type be slightly situation, starts into we creditor side, everything in it management

just unique trend up, a there just I a companies really, lot don’t its It’s business right that have plan. that out wouldn’t -- is of particular there. I say catch the think, probably

have still disruptors. You some technology

of You obviously that the XX the today. could situations have ago ability you refinance same or not to have and higher months months any interest XX is the rates done

central have maybe it’s a And just therefore, the a as occurred ordinary pent-up be over Restructuring liquidity years, year why last in -- course system. in that helpful the regards, in demand one got or should not the governments that’s we say, for the providing two I’d have some had

James Yaro

Thanks a lot. Okay.

Operator

Wolfe move question Chubak will from our next we Steven to Research. with And

Steven Chubak

evening. Good Hi.

Scott Beiser

Hi, Steven.

Steven Chubak

that step have first been it, like up single-digit we and in meaningful out saw in the Lindsey, about was like set wanted consistent, like try more Fin, have I a step the now and FVA Scott and at thinking what actually which surprising. this COVID single, bit a decent And function some running guidance a acute should relatively So, the higher, zone how you minus was type this business merely a then somewhere type this we and is let’s to Corp where on saw than growing until or plus even clip quarter business. mid be quarter per where you $XX call million was high down, seen we

in gaining share steadily. business fairly been You have that

your those on continues we gain some I think that should hoping for was about on franchise about jumping a of for perspective M&A business? recognizing to things environment some reasonable revenues You expectation remains off quarter’s talked to pretty challenged, the momentum. call. year, What’s the strong but this last point the for how get

Scott Beiser

the of our It businesses. is historically most steady

some, with its quarter. took it didn’t some projects drop a statistically, this just our those of some in than over for time. correct, of many have business sizable does other end bigger this are segments Occasionally, group business, You up particular

bit a little occasionally will lumpiness. get you of So a

and come negatively mix like, that I have that being impacted we diversification right lines at But has is year M&A from it potential is service the the some terms still lines the think trend to is Finance of which we a growth space, have. Corporate in it think was the ultimate extent, least still But down we ago. in there. in the public where

we more got there senior bankers have have. We ever as in

have staff had have that We the biggest we there. ever

We global reach have our in the in are done more past. we than

historically of chalk to kind sector kind up expertise into We didn’t standpoint. just some and just into from was quarter oriented would to much place of some and would in December probably see it introduce more line things to continue service fall expect continue that growth what that

normalized a little is better after now another quarter. we be a that level? said, or quarter What Probably did two decline recognizing, you this like a have

I all two more what how on give you will little quarters the and normalized be on shape quarter a a up in we there. think little able the next off know should more to running guidance or level bit from be those to

Steven Chubak

one environment And on factors but the peers? to I myriad I of wanted to historically, your M&A regarding typically the pain up? still impacting see color, when to activity quickly to recovers great That’s slows, Scott. activity. relative as comments expect follow-up tends franchise picks you deal just out the the feel What is sooner in No. also the know, first suss activity inflection whether more

Scott Beiser

Yeah.

to we think down is the of business. I and nature speed that, quicker up than draw It believe bit still mid-market the that’s a going others.

longer to of things a what have a goes tone yeah, consistent I see almost recession are like we going and to, now is are definite trend up two thought than rates oh, we market that. of months, higher a definitely yeah, we to think the instead to landing stay going interest is like they oh, from, yeah, all to are occurring, not, soft every would all maybe oh,

reversal but during month market be market a bond Look, that stock the we continuation it had could or have in a trend. a could February be and January, better of

equity I the in not or think to and in and so least at as and significant impatience a that to hitting the level decreasing, past decreasing that market firms some a that closer with buyers are probably have by point eventually closer stock think time. commented start sellers are of deploying private is either goes improving There’s getting not we I on time equilibrium, we capital.

And but then finance space, answered the not more where environment back January, into the we the last enough question in yet. than That we say, at deals least quarters. financing I’d are couple to better in just can earlier, has mid-cap say, hasn’t we the an been yeah, occurring in marketplace of happened meaningfully slightly

Steven Chubak

Scott. Thank in And you. just XX more GCA hoping had could squeeze could I results one you quickly, months color, under you given great if I belt, have That’s of your can in speak this to performed examples business revenue are regard? of any that any you there’s seeing how the whether tangible through, synergies evidence and whether those coming year you cite that was

Lindsey Alley

GCA So, as you the out of nontechnology. said, good GCA a a break year. was We as for know, don’t we have chunk been with and GCA business, you

all we into have So merged essentially of the operations GCA the individual group. industry

publicly our disclosed is GCA hard tell how doing. from to So numbers

their fee, how especially that size have together. increase of say, was see and more business. the average I know, in transaction than and where XX% acquisition Europe, transaction, with come see we we on in Europe synergies are we We seen would it’s you thrilled revenue average as a meaningful the every and

have is we transaction, the individuals few since we so in still very So the workforce did lost place.

the technology in a year we excited acquisition as So I their the has more results. out, has industry mean seen GCA are and you groups. about affected been of know, one that

we in ago. year is we that the the thing a place workforce have to us again, important acquired that But

all product deal you on Europe the really good has teams We among are as as those any the we seeing synergies have across three seen revenue in and lines been collaboration especially to, alluded that acquisition.

Scott Beiser

the mapped with bankers, the little Yeah. ever the than clients interface has I between or interaction would we would a have probably longer further the been taking is just negative that the systems, just say thought better things and bit payroll certainly longer. just do those of different little and consolidations take geographies, type more systems, the a to synergies, some bit of IT different different back-office a little of money all out

the We on stuff It’s will interrelationship taken back get have client-facing longer side, been us lot to made feel on on very it little of think a actually we the and the a office excellent. it’s we and we headway. front

Steven Chubak

Great my questions. color. taking you both Thank for

Scott Beiser

Thanks, Steven.

Operator

with to go we Ken And Worthington JPMorgan. will next

Ken Worthington

Good Hi. afternoon.

have euro, follow-up I pound the most just been that impact questions the revenue Maybe my a expenses. think of the and on and on and FX movement answered. yen having are and asked the

both amount FX. a seeing fair are volatility and We in up down of

the on expenses? what sort movements is of through and flow-through currency revenue So

Scott Beiser

still negative simplistic, little it’s is side. the presenting so dollar quarter revenue against the look, revenues a into on that and every overly can of exchange it, perspective it’s U.S. into better, they while gets some roughly of when it So but mean are negative currency been have other depending non-U.S. call we put rates, has almost elements converted amount the strengthened gotten a dollars. I ultimately what here, got business on you the you and

to the expenses. But, same are revenues expense thing You and going side. we on have the got ultimately, more have

the So our impacted equation seen, the negatively enough it. to that has currency revenues. to general extra exchange marketplace in explain one calendar just in or industry Not the we XXXX decline it’s have added but

Ken Worthington

revenue lined pretty different the And major the up with expenses in of terms much the are currencies?

Lindsey Alley

compensation any and expenses to respect our have we much pretty both and We non-compensation. Yes. are revenues, our -- don’t with perfectly hedged

Scott Beiser

issues. Yeah. We some do have timing

Ken Worthington

Great.

Scott Beiser

case and our in roughly periodically a are in get bonuses times Revenues theory in year. two coming paid,

standpoint, So country but by not perfectly where timing are a costs you our necessarily correct for the part, from and matched close. are country reasonably revenues most Lindsey’s

Ken Worthington

you. Thank Great. Okay.

Operator

go Seaport next with [Operator Mitchell will Instructions] Jim to We Global.

Jim Mitchell

new base hesitation activity markets but on at transactions. my in new head the quite doesn’t I business just shut. will remaining just engage deal record there’s It activity. talking seem follow any or trying at least are I being you how afternoon. around client from least maybe like backlog and discussions new, about mostly wrap robust, to your financing am to Good up Hey.

So that I I urgency driving think guess, and just the financing are why dialogues new today if you do they worried am What’s or at about macro to deals -- sign is? uncertainty? the, have least

Lindsey Alley

to that the of ready be in landing your months months, get that Good month, betting, go months, up, three and call to soft market. two will I’d market five there nine put M&A to why we on betting average, a length, materials are it which the it, next get started, Yeah. one strategics given then so go not and is, sign question. private are at equity lot together, process, the appropriate the us will months, a say groups time

believe that us the economy be I think will groups improvements prepared that see they and I take up just really mean are is the dynamic. in it the generally signing we So of just want to it. that’s advantage to

But I’d up them you this bit months, this that, got of half into to pessimistic. the recession why you difference half of six are a back several months optimistic the -- going next falling think, you clients that’s end you engagements Brennan’s question, got are if between some probably If deeper see say over will about new have and those a the unwind. I we -- have of probably next more

Jim Mitchell

Right.

of concerned spigot high investment No. -- And yields go they on we helpful. Restructuring, least whether a But seen markets. if or the have Do issuance in mean, you given confident maybe big in continues are seem and to that agnostic dampen least I in we to grade to even that, Okay. about lot very have pretty open to up, outlook. are a in continue has liability and there’s That’s then you Restructuring at at so the management to the that does that worry, not? or start public back the bankruptcy the pickup not in that debt hey, change just happen rates circling you pretty things

Scott Beiser

In very, when than classical to very, a M&A. the much of Restructuring much, getting conclusion higher probability hired, very the is Yeah. you closed high, get

up things environment even So rate if signed even improves, obviously have improves, we with if we looking of the that even the and a economy interest of amount happen, variety certain usually if at issues. are are business these companies

a structure, closed in Part have, as along a is will way capital transaction their and of a fee. work well a of so good typically in is that business itself the some that I’d time end paid get and normal model say, their do reasonably of level we up period confidence it you it as transaction part lot

and are opportunity So Financial marketplace on be ourselves again appear don’t the the for competitors. Restructuring I think the in our talking and the about altering margin once to things are you

Jim Mitchell

All right. help. Thanks Great. Thanks. the for

Operator

from follow-up Brennan question And we to Hawken a UBS. go will with

Brennan Hawken

for my Thanks taking Hey. follow-up.

In more remarks, seasonality question, tactical there. the Just maybe approach. bit my really but to a to little quarter a being December prepared -- spoke your similar typical you initial not

a should your So we about is has -- the your which little. lines think how the setup, but are financing stretching, fiscal similar fourth, time loosened a bit prior marginally to

we could that, here some you out March are seasonality the on count quarter? how should play So in and thinking that

Scott Beiser

March then to which get I for and deals, something you of year-end, want March to of inclined quarter. So we to Lokey, something positives lenders in in give a their our XXst tend be books this internal just December I potentially the push theory, fiscal different might as some peers and will didn’t the the where done an other than positive, mentioned, have December is on some so XXst. by any negatives, Houlihan have

positive pattern. a So all fact that’s

The our in starting negative the of calendar the most month. fact pattern is, unfortunately, I beginning XXXX, of for think, expectations

always optimistic up We contrast, of we end month in are the a to in the opposite ended and XXXX. where calendar the at bit just relative happened

future. just bankers the to of finally say, brought our yet don’t a oh, in to have heading conviction the expectations have we us internal enough marketplaces brighter down So yeah,

inflection So and months moving we better juncture. haven’t net-net, That’s, would you give here. hit we point at growing yeah, clarity are, have we I’d from can and things enough, much where should that this consistent had we be slightly but guess, as say, forward, definitely I just I’d say, things think ourselves say,

Brennan Hawken

Appreciate, shot. Okay. giving Scott. Thanks a for

Scott Beiser

Okay.

Operator

I closing in Beiser to the other or additional to call like would any Scott over remarks. And turn with no questions now for back queue,

Scott Beiser

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

Operator

participation. concludes for this call. your you so And today’s Thank

You disconnect. now may

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